Changes in the Brazilian energy matrix in the past decades reflect not only diversification of energy sources and technologies, but also the shift from traditional to modern bioenergy, and the increas-ing integration of energy in development strategies. In fact, biofuels have become an important development engine in Brazil. Synergies have been established between energy and agriculture in particular, but research policies have also been increasingly important in the process. Through na-tional mobilization of multiple stakeholders, and the capacity to define goals, catalyse industries, market forces and investments, together with coordinated efforts on the supply and demand sides, and R&D, Brazil achieved success with the ethanol programme. Furthermore, the country has cap-italized on this experience and established biodiesel production and markets within a short period of time, see Table 1.
Today, Brazil is the world leader in the production and use of sugarcane ethanol. The positive re-sults of the efforts made have been gradually recognized internationally, not least due to the climate
f3 2013:15 35 change mitigation benefits achieved. The benefits of a more sustainable energy path are also strongly felt in the Brazilian economy, and this is triggering new efforts to continue on track. A study by Weidenmier, Davis and Aliaga-Diaz (2008) found empirical evidence that diversification of energy supply resulted in large macroeconomic benefits to Brazil. According to their study, the GDP was almost 35% higher in 2008 compared to 1980 due to reduction of oil imports, increased domestic oil production and development of sugarcane ethanol. In addition, diversification of the energy system helped reduce business-cycle volatility, particularly in the past decade when the re-duction was in the range of 14 to 22%. Three quarters of the welfare benefits are related to reduced oil imports and development of national oil production. However, sugarcane ethanol had a major role in the other share of the benefits particularly as it protected the economy from oil price shocks.
The sugar-ethanol industry in Brazil has evolved into a modern industry, now also with participa-tion of internaparticipa-tional capital and interests. The Brazilian sugar-ethanol industry is a strong actor in the fuel markets of Brazil and also in the global arena, pushing for the formation of global ethanol markets. Investment in ethanol and other biofuels is increasing in Asia and Africa, as oil-importing countries recognize the strategic value of diversifying into biofuels to address energy insecurity, stimulate agro-industrial development and mitigate climate change (Batidzirai and Johnson, 2012).
The Brazilian experience shows that a lot can be realized at national level, and the modern bioen-ergy transition achieved in a few decades only. As international competition intensifies, it will be important to devise new strategic policy frameworks to guarantee continued leadership in the etha-nol segment (Souza and Macedo, 2011). Likewise, sectoral and innovative policies will be needed in the other bioenergy segments to fully explore their national and global benefits.
An important lesson from the Brazilian experiences is that the transition towards biofuels cannot be achieved within the context of the energy sector alone. In fact, a significant amount of synergies need to be created across economic sectors and governance levels. In Brazil, broad integration was orchestrated encompassing agriculture, transport and the energy sector. National mobilization of public and private stakeholders, the definition of goals and policies to catalyse investments, market creation and provision of additional infrastructure have been essential in the process, see Table 1.
Coordinated efforts were made on both the supply and demand sides, supported by R&D, and pushed by strong interest groups who embraced the new fuels, technology options and markets.
Short-term variation in exogenous factors affecting policy choices (e.g. oil prices) have been counteracted by the long-term commitments of multiple stakeholders and served as incentive to improve efficiency and consolidate the biofuel sector. This systemic approach in policies is, in fact, receiving increasing attention also in the technological innovation literature (Wieczorek and Hekkert, 2012). In the search for renewable energy substitution pathways and increased energy efficiency, a cross-sectoral system approach has proved to be a requirement due to the character of the resource base, the opportunities for developing multiple products and energy services in inte-grated processes, and the requirements for cost efficiency and competitiveness in the various sources from which biomass is derived.
Specific technology options and strategic policies had an important role in orchestrating the biofuel transition in Brazil, but the key factor for modern bioenergy in the country is associated with the alignment of old established structures and interest groups in agriculture with industrial actors and policy-makers at national and sub-national scales. Long term commitments created the virtuous cycle of private and public investment in both infrastructure and institutions, which provided the
f3 2013:15 36 basis for the up-scaling phase of successful technology deployment and the movement from niche market to mainstream technology and fuel option, which is the case of ethanol in Brazil today.
Still, many challenges lie ahead. The future development of bioenergy is not given. Beaten unsus-tainable paths, established infrastructure and economic interests, lack of systemic political and cross-sectoral support, the conflict of fuel versus food, and public opinion are some of the barriers to be addressed in Brazil and in the world at large. Planning for social, economic, spatial and envi-ronmental balance simultaneously will be crucial for correcting distorted processes of environment-al degradation, capitenvironment-alizing on the bioenergy benefits and potentienvironment-al sector synergies, turning the present dynamics into processes of sustainable development.
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Table 1. Characteristics and actors involved in ethanol and biodiesel segments in Brazil in past decades.
BRAZIL Starting point/existing platforms
Triggers for development of the industry
Technologies, infrastructure, investment needs
Interest groups Opposition Characteristic of policies
Earlier More recently Ethanol
1975 – present
Extensive sugar-cane plantations and sugar production (important export product).
Low sugar prices;
opportunity to ex-pand and modernize sugarcane produc-tion. Opportunity to link agriculture modernization and energy policy to re-duce oil imports and dependency; oil prices.
Technology improve-ments in agricultural production; invest-ment in sugar/ethanol plants; logistics in transport, storage and distribution; new technology for ethanol vehicles.
Sugar producers aiming at expansion and moder-nization, targeted etha-nol as complementary to sugar (e.g. ethanol).
Car producers: opportu-nity to develop new products for growing Brazilian market.
Researchers aimed at improved agricultural productivity.
Initially, none. Ethanol was to displace oil, which was imported.
Lately, environmental NGOs, (particularly inter-national); food security professionals and politi-cians worried about com-petition with food production.
Agri-business in new ethanol producing coun-tries fearing competition.
Oil and gas industry.
Multi-sectoral and development oriented;
strategic; strong coali-tion of public and private interests; long-term and constantly reviewed and adapted;
job creation.
Strategic and growth oriented; monitoring role in a broader de-velopment and ener-gy security context;
link between nation-nal and internationation-nal efforts to shift ener-gy systems towards renewables and miti-gate climate change.
Biodiesel 2002 – present
Modernized agri-culture sector;
successful experience with establishment of ethanol industry;
large markets for diesel; some diesel import dependency.
Increasing recog-nition of biofuels role in promoting sustainable devel-opment; global climate change agenda; national social agenda.
Investment in bio-diesel plants; certifi-cation schemes for social sustainability in biodiesel production.
Agriculture sector particularly soybean producers;
industrial groups focused on biofuel production.
Initially, none.
Lately, national opposi-tion groups worried about the domination of large-scale industry, and failure of programme to address social inclusion as envisaged.
Replication of success case with ethanol though now with strong dimension of social inclusion.
Caution in the expansion of targets.
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