Targets and results of the Brazilian Biodiesel Incentive Program – Has it reached the Promised Land?

Abstract

This study tests the assumptions that justified the establishment of the Brazilian Biodiesel Production Program (PNPB), to see whether this program has achieved its promised results. Given the connection between socioeconomic, political, technological and environmental issues, the study performs an analysis covering these different dimensions. From the socioeconomic standpoint, findings of the study show that the generation of jobs in the agricultural sector has been much lower than the expected 1.3-million-job creation figure. From the standpoint of reducing the outflow of foreign exchange because of potentially lower demand for imported diesel, the option for the methanol instead of ethanol production route has led to an increased net outflow, as the greater need to import methanol to produce biodiesel more than offsets the lesser need to import mineral diesel. Nevertheless, even though the “Promised Land” has not been reached, particularly from a socioeconomic standpoint, the premises of energy efficiency and the potential to mitigate GHG emissions appear to be on solid ground. In this respect, the input/output energy ratio of producing soy-based biodiesel and the GHG mitigation potential of pure biodiesel justify the continuing effort to improve the PNPB to achieve more promising results in relation to the other indicators.