Biodiesel in Brazil: A Market Analysis and Its Economic Effects

Marcelo Santana Silva,Tito Britto Santos,Pieter De Jong,Angela Machado Rocha,Francisco Lima Cruz Teixeira,Ednildo Andrade Torres,Francisco Gaudêncio Mendonça Freires

doi:10.5539/jas.v6n8p160

Abstract

The commercial production of biodiesel in Brazil began in 2005 and increased in such a way that the country has become one of the largest producers in terms of volume in 2012. This study aims to analyze the biodiesel market in Brazil and its socio-economic effects resulting from the mandatory addition of biodiesel in the distribution system of mineral diesel. This work is characterized as a qualitative and exploratory study. The technical procedures adopted include literature research and data collection from government agencies involved. It is highlighted that the Programa Nacional de Producao e Uso de Biodiesel no Brasil - PNPB (“National Program for Production and Use of Biodiesel in Brazil”) was designed for the purposes of: promoting rural development; the growth of biodiesel production plants; and positively impact the environment. The survey showed the following results: i) significant increase in investment in renewable energy, especially biodiesel, ii) a high unused capacity in the biodiesel production plants; iii) a high dependence on soy for biodiesel production, iv) unfavorable prices of oilseeds; v) high concentration of the biodiesel market; vi) difficulty in standardizing the biodiesel auctions; vii) a small increase in inflation; viii) increased generation of income, employment and Gross Domestic Product (GDP) due to the presence of biodiesel in the energy market. It was found that by adding a percentage of biodiesel to diesel oil caused positive impacts on the national economy, contributing to improvement in employment policies, income distribution, environmental issues, technological and regional development.

Highlights

This study aims to analyze the biodiesel market in Brazil and its socio-economic effects resulting from the mandatory addition of biodiesel in the distribution system of mineral diesel
Given the complexity of this subject, we examined in detail data, information and opinions derived from studies and existing knowledge on the biodiesel market
4.1 The Structure of the Biodiesel Market in Brazil With the increasing demand for B5, Brazil has become one of the largest producers and there is no threat of supply shortage in the short term, provided the legal conditions prevail

Summary

Introduction

Brazil has considerable potential for renewable energy, these include: solar (photovoltaic and thermal), biomass (wood, agricultural residues, biodiesel, ethanol and some vegetable oils), hydroelectricity, biogas (sewage, garbage and manure) and wind energy (Lund, 2009; Takahashi & Ortega, 2010; Visser et al, 2011; Marchetti, 2012; Padula et al, 2012; Alonso-Pippo et al, 2013).Several studies into the use of renewable energy have been made in recent years motivated by fluctuating oil prices as well as by concerns about climate change and the social and environmental aspects (Arent et al, 2011; Rathmann et al, 2012; Souza & Seabra, 2013; Hertel et al, 2013; Hassan & Kalam, 2013).Initially it was observed that the relationship between economic and social development with the energy matrix is extremely complex and poorly understood. Several studies into the use of renewable energy have been made in recent years motivated by fluctuating oil prices as well as by concerns about climate change and the social and environmental aspects (Arent et al, 2011; Rathmann et al, 2012; Souza & Seabra, 2013; Hertel et al, 2013; Hassan & Kalam, 2013). World oil reserves are unequally distributed and concentrated in the Middle East, where the geopolitical outlook is quite uncertain. These aspects are sources of uncertainties and distort expectations about the future energy market (Demirbas, 2009; Harvey & Pilgrim, 2011; Perdiguero & Jiménez, 2011; Atabani et al, 2012; Silva Jr., 2013)

Objectives

Methods

Results

Conclusion