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image2019-1-22 17:44:14.pngAsigment 2 Revision.docxUse of Biodisel in Brazil.

Description of the product or technology:

Scientists say,  petroleum fueled car are one of the leading cause of global warming. So, people are searching for sustainable alternatives. Ethanol is a homegrown bio fuel. In 1970’s Brazil embarked on an ambitious effort to develop bio fuel from agricultural crops seeking to free itself from dependence on foreign oil. They are made up from sugarcane. Today 40% of Brazil's motor fuel needs are met with cane ethanol. Brazil is now one of the world’s leading ethanol producers. Brazil is currently the world’s second largest producer and consumer of bio fuels. Brazil has produced an approximate amount of 27.7 billion liters of ethanol and 4.2 billion liters of biodiesel in 2017.

In the local plants the cane is crushed, extracting the juice that become fuels. Ethanol also have some issues like it may take more energy to produce than it saves but in Brazil they are also aware of these issues and looking for the possible solutions. For examples, some factories use their pulp leftover from the cane to produce electricity. They burn it into firing engines which provides enough electricity to power.

 

Description of the market:

In 2010, 47.5% of energy was renewable energy and 29.6% of them came from the biomass. In 2013 there were 59 plants authorized to produce and commercialize biodiesel and the production capacity was 7,243 billion liters per year.

 

Figure(1): Installed capacity of biodiesel production in Brazil

According to National Biodiesel production and Usage Program (PNPB), there is no threat of supply shortage In the short term. Study also shows that Midwest, South, Southeast, Northeast and North regions are producing 41.9% ,33%, 10.6%, 11.7% and 2.7% respectively. Most of the plants are located in Midwest and south area.

Huge amount of bran and glycerin are produced as a byproduct of biodiesel, which are used in chemical industry. It can full fill the demand of the local market as well as are exported in to other countries. There is a surplus of production of biofuel in comparison to demand. It can be clearly stated by the following figure.

Fig(2): annual production and demand graph of biodiesel in Brazil

Description of policy measures:

Brazilian government took several steps to promote the production and use of biofuel. Their main target is to,

1)      reduce the import of energy

2)      job creation and rural development

3)      decrease environmental affect causing by using renewable fuel.

The policy is to give tax incentives, social inclusion politics and credit incentives. Ministry of Agrarian Development (MDA) ensure competitive prices, quality and supply. The price of ethanol is much cheaper to the customers. The price of ethanol is 70% less than the gasoline.  MDA also look after of producing bio fuel from different sources in different regions. MDA allows fund to group and individual projects to promote the production of biodiesel. Farmers, consumers, producers, researches all are the beneficial of the policy measures.

Evaluation of the effect of the measures:

The policies have positive impact on the production and use of biofuel. As the price is much lower than the gasoline, people are self-motivated to use ethanol rather than gasoline. Industrialists are also encouraged to produce the bioethanol because they have enough resources and get continuous supports from the policy makers.

The agr-ofuel boom is simply the largest step in the growing Brazilian agro-industry. Brazil’s agro industry has grown quickly. Some multinational corporations such as Cargill, Bunge have increased their holdings in the region. The government is also supporting the agricultural production to feed the entire nation and also give Brazil a foot in the global market. The government provided seven times more money to agro-business than to peasant farming. These all incentives are very effective and make Brazil the world’s second largest producer and consumer of biofuels.

References:

1)The emergence of the biodiesel industry in Brazil: Current figures and future prospects( may 2012). available at : https://www.sciencedirect.com/science/article/pii/S0301421512000997

2)Biodiesel production in Brazil: Current scenario and perspectives( februaty 2015) Available at: https://www.sciencedirect.com/science/article/pii/S1364032114008211

3)Biodisel in Brazil: A market Analysis and its Economic Effect(July 2014): https://www.researchgate.net/publication/275306056_Biodiesel_in_Brazil_A_Market_Analysis_and_Its_Economic_Effects