Innovation subject to sustainability: the European policy on biofuels and its effects on innovation in the Brazilian bioethanol industry

Abstract

Biofuels are a suitable complement for fossil energy in the transport sector and bioethanol is the main biofuel traded worldwide. Based on the assumption that innovation can be influenced by regulation, the Brazilian bioethanol industry is facing new requirements from external actors while reaching for international markets. Until 2010, national environmental laws were the main sustainability instrument that the biofuel industry faced. With the introduction of sustainability criteria for biofuels in the European Fuels Quality Directive (FQD) and Renewable Energy Directive (RED) of 2009, bioethanol producers have been pressured to innovate in respect of the requirements of future markets. Here, the aim is to analyse the case of Brazil, given the potential exports of sugarcane-based ethanol from this country to the EU. Brazil provides an interesting overview of how a bioethanol industry innovated while facing sustainability requirements in the past. A comparison between the European requirements and the industry´s status quo is then explored. The EU criteria are likely to have effects on the Brazilian bioethanol industry and incremental improvements in sustainability levels might take place based on the sustainability requirements. In addition, the industry could follow two other paths, namely risk diversification by engaging in multi-output models; and market leakage towards less-regulated markets. At the same time, an environmental overregulation of the biofuel market may make it more difficult for emerging biofuel industries in other countries, especially in Africa, by creating a barrier rather than contributing to its expansion. The results of this analysis show the main challenges to be addressed and the potential positive and negative impacts of the European Union biofuels policy on the Brazilian bioethanol industry.

The use of system dynamics for energy and environmental education

“…This research was conducted by assessing the 2050 Calculators currently available online and in open access. All the three lectures involved in this assessment were about an introduction to renewable energies with an emphasis on bioenergy, and carbon mitigation strategies (Pacini & Strapasson 2012;Smith et al, 2014;Strapasson et al, 2019Strapasson et al, , 2020b. The calculators were used as an interactive systems model for participatory discussion with the students in the context of the global climate debate.…”

Prospects for exploration of fertilizer minerals in Azerbaijan

“…The prevalence of mixed mills in Figure 14 highlights the business preference to spread risk (Pacini and Strapasson, 2012). Markets of sugar, ethanol and bioelectricity have been offering hedging options for producers over the last decades.…”

“…The European Union biofuels policy, including the 2009 sustainability criteria, from its inception raised concerns with respect to their compatibility with WTO law (Pacini and Strapasson, 2012). While the criteria apply equally to biofuels produced inside and outside the European Union, some non-European Union countries producing certain types of biofuels may find themselves more affected by these requirements than the others.…”

“…One approach was to improve the current-generation biofuels. The second was to promote technological improvements that allowed for a broader scope of biomass to be processed into energy and biomaterials, reduce competition for food crops, which traditionally served as the main feedstock for biofuel production (Scarlat and Dallemand, 2011;Pacini and Strapasson, 2012). In other words, initiatives were launched to make conventional biofuels better, as well as promote supply-side innovation, which carried fewer potential negative externalities (Lora et al, 2011).…”

“…Ethanol production costs in Brazil (1975to 2014 Source: Prepared by UNCTAD based on Van den Wall Bake (2009), CNA, PECEGE /ESALQ andPacini and Strapasson (2012).…”