Opportunities and risks for continued biofuel expansion in Brazil

Brazil is one of the world’s leading biofuel markets, producing nearly 40 billion liters of
biofuels in 2018. Brazil’s biodiesel industry has expanded in recent years as a result of
increases in mandated blend levels for diesel fuel. The introduction of the RenovaBio
program to expand ethanol production, accompanied by further increases in the
biodiesel blending mandate, is expected to lead to even higher biofuel consumption in
the next decade. This paper provides an overview of Brazil’s biofuel policy framework,
highlights the risks of continued biofuel expansion, and presents several opportunities to
improve the climate performance of Brazil’s fuel policies.
The continued growth of Brazil’s biofuel industry over the next decade could have
profound impacts on the climate. Biofuel policy in Brazil is of special importance
because of the country’s substantial forestland and high biodiversity. Although Brazil has
implemented some policies to discourage deforestation, as well as some sustainability
safeguards within its biofuel framework, these measures may do little to discourage the
indirect pressures of biofuel demand on deforestation and grassland, which may result
in the conversion of high–carbon stock land. Recent political changes affecting Brazil’s
forestry and agricultural policy, in conjunction with the continued expansion of Brazil’s
biofuel industry, may pose further risks to biodiversity. Additionally, further increases to
Brazil’s biodiesel blending mandate could create compatibility issues for the country’s
vehicle fleet, degrading equipment and emitting greater amounts of local air pollutants.