Abstract
This article addresses the future of Brazil's bioethanol sector, focusing on its capabilities to innovate, its efforts toward producing cellulosic ethanol, and on recently implemented policies. Contrary to what has been argued in the literature, Brazil may not be prepared to face the technological and market challenges now emerging in the biofuels domain worldwide. Important productive investments were made by oil, energy, and chemical companies in bioethanol production in Brazil in the first decade of the 2000s; however, that sector has not shown levels of investment in innovation—either for first- or second-generation bioethanol—compatible with the challenges of making bioethanol a global commodity. Even considering recent policies in Brazil toward cellulosic bioethanol, the results achieved have been far from sustainable. This situation is partially due to uncertainties surrounding biofuels worldwide and partially due to contradictory policies toward liquid fuels in Brazil. The Brazilian government has simultaneously promoted both fossil fuels and renewables, thereby creating ambiguity among decision makers. These and other findings were drawn from an in-depth survey on innovation in the bioethanol sector in Brazil conducted in 2014 among 35 productive units affiliated to 58 industrial groups.
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