The Paris Agreement on Climate Change entered into force in September, starting a coordinated effort by the world’s governments to reduce carbon dioxide emissions and limit climate change impacts. It’s far from the end, though. Entering into force starts the hard work—meeting each nation’s decarbonization targets. Every country’s intended nationally determined contributions (INDCs) will reduce emissions and expand economic opportunities for clean energy. More than any other nation, Brazil’s INDC relies on biofuels to meet these goals.
Brazil’s INDC targets 37 percent lower emissions by 2025 compared to 2005, with further reductions by 2030. This assumes biofuels supply approximately 18 percent of the country’s energy mix by 2030 through greater sugarcane ethanol production, expanded second-generation biofuels and additional biodiesel for transportation.
Biofuels can meet this challenge. Ethanol and bioenergy produced from sugarcane already constitute 15.7 percent of Brazil’s energy mix, replacing more than 40 percent of gasoline and avoiding 600 million tons of carbon dioxide emissions since the beginning of the ethanol program in the 1970s. Just this past harvest, Brazil produced 7 billion gallons of advanced ethanol and 15 million megawatt-hours of bioelectricity from cogeneration.
While Brazil’s INDC and its related biofuel goals are ambitious, experience shows they are also realistic. Ultimate success relies on three fundamental pillars: predictable policy, sustainable production and technological innovation.
First, government policy must be clear and stable. Well-established rules of the road fostered Brazil biofuels with the first wave of ethanol’s growth government driven from the mid-1970s to the 1980s. The second wave of growth, starting in 2003, resulted from the introduction of flex-fuel vehicles. In the past few years, however, regulatory uncertainty has reduced investments and inhibited technological development. The lack of predictable policy has its cost and instead of having 10 to 30 new mills built per year, we see mills shutting their doors.
Brazil should maintain a regulatory framework, incorporating the positive externalities of renewable fuel into prices via consumption mandates or tax differentials favoring biofuel over gasoline.
Second, we must ensure sugarcane production continues to expand sustainably. Brazil’s Agro-Ecological Zoning policy prevents sugarcane expansion in the most sensitive biomes and in native vegetation, while authorizing expansion into 64.7 million hectares of suitable land. That’s about 7.5 percent of Brazil’s territory, compared to the one percent of land currently used for sugarcane production. Sustainability extends to paying sugarcane growers fair prices for their product. Brazil’s current approach is very effective, with the Council of Sugarcane Industry and Growers creating clear rules for cane prices and minimizing potential conflicts.
While there’s no sustainability silver bullet, Brazil’s current policies are a good start and must be maintained. In addition, we should consider innovative models like self-regulatory commitments and third-party certifications.
Third, we must enhance research and development to unlock next-generation biofuels and increase ethanol’s competitiveness. Second-generation ethanol is a reality in Brazil. Raizen is producing ethanol from cane bagasse in Sao Paulo and Granbio is producing ethanol from bagasse and straw in Alagoas. The Center for Sugarcane Technology has demonstrated we can quadruple ethanol’s productivity through innovation in the near future. Optimizing production, advancing genetic enhancements and expanding agronomy to increase feedstocks, on top of industrial re-engineering of our first-generation production to second-generation ethanol, can raise production from 1,850 gallons per hectare to 6,500 gallons per hectare.
From the beginning of Brazil’s ethanol program, technological innovations multiplied ethanol production by 20-fold, doubled cane yields and cut prices in half. We believe current innovations will create similar results in the next few decades, if research and development continue on track.
Reducing power sector emissions is an important start to slowing climate change, but to truly decarbonize, we must tackle transportation emissions. Earlier this year, U.S. transportation emissions passed power sector emissions for the first time since 1979 as new clean energy came online, and this trend will likely play out elsewhere as countries decarbonize. Biofuels are a proven solution to replace fossil-based transportation fuel. Together, America and Brazil have built a global biofuels market, showing how stable policy can create economic growth and environmental benefits.