brazil’s biodiesel program · 2014. 9. 30. · 1 4 | biofuels in brazil: realities and prospects...
TRANSCRIPT
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introduction
TestingandresearchintofuelderivedfromvegetableoilbeganinBrazilduringthe1970s.Forreasonshavingtodoprimarilywiththepetroleummarket,andwithfactorsaf-fectingpricesofpetroleumderivativesaswellasdieselfuel’smarketshareinBrazil’stransportationindustry,theseinitia-tivesfellshortofmakingthosefuelsapartofthenation’senergymix.
In2003,newlifewasbreathedintotheseinitiativesbythepoliciesandprogramsupportoftheFederalGovernment.Thesechangeswereenthusiasticallywelcomedbyallofthevariousmanufacturing,socialandpoliticalstakeholdersinthebiodieselsupplychain,andtheirinterestisstillgrowing.
InJulyof2003,thePresidentofBrazilcalledforstud-iesbyrepresentativesofthevariousagenciesoftheFederalGovernmentforpurposesofexaminingtheeconomic,socialandenvironmentalfeasibilityofbiodieselproductionanduseinBrazil.Therefollowedaseriesofhearingstowhichwere
Brazil’SBiodieSelprograM
rodrigoaugustorodrigues1
Joséhonórioaccarini2
1MastersinRegulatoryeconomics,UniversityofBrasilia,AdjunctdeputydirectortotheexecutiveOffice’sChiefofStaffandcoordinatorfortheinterministerialexecutiveCommitteeonBiodiesel.
2Mastersineconomics,UniversityofSãoPaulo,AdvisertotheexecutiveOffice’sChiefofStaffandMemberoftheinterministerialexecutiveCommitteeonBiodiesel.
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invitedrepresentativesofscienceandtechnologyinstitutes,universities,vegetableoilmanufacturers, farmersand ruralworkers, automakers, auto parts producers, state govern-mentsandstatelegislatorsinvolvedinthetopic.Everyeffortwasmadetolearnaboutandevaluateinternationalexperi-enceintheproductionanduseofbiodiesel.
These studies culminated, inDecember of 2003, in thepreparation of a Final Report presenting conclusions onbiodiesel’spotential formakingapositivecontributionto-ward resolving crucial Brazilian issues, such as helping toplace family farmowners (small ruralproducers)onabet-terfootinginsocietyasawholethroughjobcreationandincome which would result from their increasing inclusionin thesupplychain for thisbiofuel.Thiswould lessenthedisparities among different regions, save on hard currency
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andreducethenation’sdependenceonimportedoil,whileincreasingtherenewablecomponentofBrazil’senergymix,workingtowardsabetterenvironmentandeasingtheburdenofhealth-relatedcostsbyreducingpollution-relatedillness,especiallyinthegreatmetropolitanareas.
After considering this broad range of social, economic,environmental,strategicandevengeopoliticalbenefits,theFederalGovernmentpromptlyturnedtothetaskofdefininggoalsandtakingstepstowardtheintroductionofbiodieselintoBrazil’senergyfuelmix.Hence,onDecember6,2004,Brazil’sNationalBiodieselProgram(PNPB)cameintobeing.
Theprogramcalledforanumberofdifferentstudies.Mea-suresweresetinmotionandactionswereimplementedwiththe goal of accommodating Brazil’s fuel-related legal andregulatoryenvironmenttotheadditionofbiodieselasanew-
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comer.Taxsubsidiesweredesigned,throughthemechanismof theSocial FuelStamp, family farmsorganized,methodsoffinancingcreatedandstepstakentofostertechnologicaldevelopmentusingbothdomesticresourcesandthosearis-ing from international cooperation. Brazil’s own biodieselmarketwasorganizedaroundpurchaseauctions,pivotaltothisProgram.
Brazil’senergyMixandBiofuelsMarket
As shown in Chart 1, Brazil clearly stands out when itcomes to the renewable share (hydropower, biomass andethanol)ofthenation’senergymixcomparedtotheglobalaverage.Nevertheless,non-renewable sources (55.6%) stillpredominate, in the formof oil and oil products (38.8%),naturalgas(9.5%),coal(5.8%)anduranium(1.5%)anditsderivatives.
Chart1–Renewableandnon-renewableSourcesinenergyMix
Brazil(2006) World(2004)
86,8%
13,2%
55,6%
44,4%
Renewable Non-renewable
Originaldatasource:
nationalenergy
Balance(Ben-200�).
Originaldatasource:
nationalenergy
Balance(Ben-200�).
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|1�3Brazil’SBiodieSelprograM
Uponexaminingthelightandheavyvehiclefuelmixfor2006,showninChart2,thehighrelianceondieseloil(52.2%)standsoutclearly.In2004,whentheNationalBiodieselPro-gramwasinitiated,thepercentagewasevenhigher(about54%).ThiswasafactorintheintroductionofbiodieselasanewfueltobolsterBrazil’ssustainableenergysecurity.
Chart2–VehicleFuelMix:Brazil-200�
NGV3,3%
Gasoline27,3%
AnhydrousAlcohol7,3%
Ethanol9,9% DieselOil
52,2%
Chart 2 also shows renewable energy sources at 17.2%ofallfuelconsumption,withethanol(9.9%)andanhydrousalcohol(7.3%)–thelatterblendedwithgasolineinratiosrangingfrom20%to25%(E20toE25).Thegrowingratiosofbiodieseltodieselfrompetroleum,addedtotheincrementaluseofethanolinflex-fuelvehicles,havegraduallyraisedtherenewablefuelshareofthevehiclefuelmix.Assumingthesamerelativedistributionfoundin2006,theB2mixturewillraiserenewablefuels’sharefrom17.2%toabout18.2%.
DomesticconsumptionofdieseloilinBrazilisabout40billionlitersperyear.Datafor2005showthat82.4%isusedfortransportation,14.6%consumedinagricultureandabout
Originaldatasource:
MinistryofMinesand
energy(MMe)
Originaldatasource:
MinistryofMinesand
energy(MMe)
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3%byindustryandothersectors.Tomeetthecoun-try’sdemand,Brazil importsfrom6%to8%of itsdomestic diesel fuel requirements – 2.4 billion to3.2billionlitersperyear.A2%blendofbiodiesel(B2)wouldrequire800millionlitersperyeartosup-plythedomesticmarket.ProductionrequirementsoftheB5mixtureaddupto2billionlitersannually.
ReasoninganddirectivesguidingthenationalBiodieselProgram(PnPB)
Asoilbecomesscarcerandenergymoreessentialtodevelopment,energysecurityisastrategicpur-poseoftheprocess,anditmustbeattainedusingalternativeenergysources.Intheshortandmedi-um-term,increasingproductionoffuelsfromrenew-ablesourcesisthemostviableoption,andrequiresmeeting broad sustainability requirements, on theenvironmental,economic,social,technologicalandstrategicfronts.
Given its soil and climate, Brazil has vast po-tentialforproducingbiomass,andaddingvaluetotheseavailable rawmaterialsoffersasizable rela-tiveadvantage.Amongthemanysuchpossibilities,biodiesel is perhaps the most promising becauseenergydemandtendstoincreasewhiletheworld´seconomyexpands.
Withinthiscontext,Brazil’sgovernmentglimpsedthepossibilitiesnowbecomingrealityofbolstering
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itsenergysecuritywhilebenefiting family farmsandsmallruralproducersinthepoorerregionsofthecountry,bybring-ingthemintothebiodieselsupplychainwithenvironmentalandotherbenefitsaswell.
This sums up the reasoning behind the Biodiesel Pro-gram,anditsgoalsarebeingattainedthroughtaxbreaksforcompaniespurchasingoilfeedstockproducedinthenation’spoorestregions.Tofitthisstrategytoamarketcontext,theblendingofbiodieseltopetroleum-baseddieselfuelingrad-uallyincreasingproportionswasgiventheforceoflaw.
Brazilian biodiesel fuel is derived from renewable bio-mass to power compression-ignition internal combustionengines.Regulationsprovideforothertypesofpowercon-versioninwhichitcanpartiallyorentirelyreplacefossil fuels. Hence there is no shortage of pos-sibleapplicationsofbiodiesel fuel inurbanandhighwaytransportation,aswellaspassengerandcargoshipping,railways,generatorsandstation-aryengines.
Brazil’sBiodieselProgramwasdesignedtograd-uallyconvergeonmarketmechanismsbymeansofincentiveswhichprovidefortheinclusionofpro-ducersinthepoorestregionsintothesupplychainforthisfuel,throughincentivesbasedonsupplyanddemand.
Prominentonthedemandside isFederalLawNo.11,907passedJanuary13,2005.Thelawde-finesbiodieselasanewfuelinBrazil’senergymix,andasof January2008, requires a2%biodieselcomponentblendedto98%dieseloil,knownasB2.ByJanu-aryof2013,themixrequirementwillincreaseto5%(B5),
hence there is no shortage of possible applications of bioDiesel fuel in urban anD highway transportation, as well as passenger anD cargo shipping, railways, generators anD stationary engines.
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withpossibilities forhigherblendpercentagesall thewayuptopurebiodiesel(B100)byauthorizationoftheBrazilianPetroleum,GasandBiofuelsRegulator(ANP),whichisgivenregulatoryandfiscalcontrol,bythatsamelaw,overproduc-tionandsaleofbiofuels.
Law11,907/2005thuscreatesacaptivemarketforbiodie-selinBrazil,whileFederalLawNo.11,116ofMay18,2005providesforabatementofsomeorallfederalexcisetaxesonbiodiesel,basedonthefeedstockusedtoproduceit,classofgrower-seller,regionaloriginoftherawmaterial,oracombi-nationofthesefactors.
TheExecutiveBranchwasplacedinchargeofregulatoryenactmentsforLaw11,116,withthestipulationthattoben-efit from the tax breaks, biodiesel producers must have acertificate, knownas theSocial Fuel Stamp, issuedby theAgrarianDevelopmentMinistry(MDA)tobiodieselproducerslicensedtomanufactureandsellthisnewfuel,andwhomeetthefollowingadditionalrequirements:
a) purchaseminimumpercentagesoffeedstockfromfam-ily-ownedfarms,rangingfrom10%intheNorthandMidwestto30%intheSouthandSoutheastregions,all the way to 50% in the Northeast and Semi-AridBadlands (based on average market shares of smallagri-producersinthoseregions);and
b)enter intoagreementswith family farms, concerningprices,schedulesandtermsofdeliveryforrawmateri-als,andprovidethemtechnicalassistance.
A100%rollbackoffederalexcisetaxesonfuelsisgrantedexclusivelyforbiodieselproducedfrompalmoil(dendê)intheNorth,orcastoroilintheNortheastandSemi-AridBad-lands,providedtheseoilscomefromfamilyfarms.Foroils
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producedonothertypesoffarmsinthosesameregions,themaximumfederalexcisetaxabatementis32%.
Biodiesel produced from feedstock grown on family-ownedfarmsisgivenpreferentialtreatmentinthetaxcode.Irrespectiveoftheoilseedorregion,iftherawmaterial ispurchasedfromtheseproducers,thefederaltaxabatementcomesto68%.
Another important featureof the taxbreakapproach isthattotalfederaltaxesonbiodieselmayneversupplanttax-esonconventionaldiesel fuel.Anagreemententered intobytheFederalGovernmentandalloftheStatesinBrazil’sFederationinOctoberof2006,providesthatthestatevalue-addedtaxonbiodieselproductionandtrademaynotexceedtheratesassessedonpetroleumdieselfuel.
Besides the full or partial rollback of federaltaxes,companiesthathavetheSocialFuelStampmay use that certificate to differentiate theirbiodiesel brandor origin in themarketplace, forthesealsignifiesthattheproducerabidesbytheprinciplesofsocialresponsibilityinmanufacturing.By these mechanisms, Federal Law 11,116/2005providedincentivessothatthesupplyofbiodieselwouldabidebythebasicprinciplesunderlyingtheNationalBiodieselProgram,fostersocialdevelop-ment and reduce regional disparities by creatingemploymentandincomeopportunitiesforsomeofthepoorestindustriesandregionsinBrazil.
Another important feature of this program isthat it does not exclude any economic classes,technologicalapproachesorrawmaterials.ThisisbecauseBrazilhassufficientpotentialtomanufac-
another important feature of this
program is that it Does not excluDe any
economic classes, technological
approaches or raw materials. this is
because brazil has sufficient potential
to manufacture bioDiesel using a
variety of processes anD feeDstocks
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turebiodieselusingavarietyofprocessesand feedstocks,suchascastorbeans,palm,soybean,peanuts,oilseedradish,cotton, sunflower, jatropha, babassu, animal fat and usedoil. The economics of each alternative vary in accordancewithBrazil’sregionaltraits.
TheFederalGovernmentbelievesthechoiceshouldbeleftuptotheeconomicactorsthemselves,butdoesrequirethatthebiodieselusedtomeetthelegalblendingrequirementsmeet physical and chemical specifications determined andrigorously inspectedby the federalagencyhaving jurisdic-tion, the Brazilian Petroleum, Gas and Biofuels Regulator(ANP).
Accordingtotherulesoftheprogram,anyeconomicagentdesiringtoproduceandsellbiodieselmaydosoafterobtain-inginitialauthorizationfromtheANP.Anycompanybenefit-ing from this authorizationmustfile for a special registry
Biodieselwith
distinctproductive
process:Castor
bean,soybean,
peanuts,cotton,
sunflower,jatropha.
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listing with the Treasury Ministry as a biodiesel producer.Companiesthatqualifyfortaxbreaksintendedtofosterso-cialandregionaldevelopmentmust,inaddition,applyattheMDAforaSocialFuelStamp.
BackgroundandCurrentStatusofthenationalBiodieselProgram(PnPB)
ByDecemberof2004,thelegalandregulatoryprovisionsof the program were already in place, with another threeyearstogobeforetheB2mixturerequirementwasscheduledtotakeeffect(Januaryof2008).Tostandbyandexpectthemarkettoorganizeitselfnaturallydidnotseemthebetterpartofwisdomgiventheuncertaintiessurroundingpricestobechargedoffaithfulconsumers.
It seemed appropriate, then, to bring about conditionswherebycompetitionamongsellerscouldputsuppliesonafeasiblefooting,therebysteepeningthe“learningcurve”intheproductionofthisnewfuelandinthelogisticssurround-ingitstransportation,blending,distributionandcommercialsale.ThisledtheFederalGovernmenttoorganizebiodieselpurchaseauctions.
Theprimarypurposeofthesereverseauctionswastofos-terdevelopmentofadomesticbiodieselmarketandreduceasymmetriesininformationaboutcostsandpricinginastillincipientmarket.Intandemwiththiswasadesiretohurryalong the social development aspects and reductionof re-gionaleconomicdisparities.TheB2mixturerequirementwasthereforemoveduptoJanuaryof2006,butremainedcontin-gentuponvolumeschanginghandsatthereverseauctions,
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the purchase auctions have playeD a Decisive role in graDually consoliDating brazil’s bioDiesel market.
whichwouldonlybeopentocompanieshavingtheSocialFuelStamp.
Oneshouldobserve,however,thatthepurchaseauctionswereintendedasatransitionalmeasure,tohastenachieve-mentofthestatedpurposesandprovidefarmersandagri-culturalorganizations,industrialproductionanddistributionnetworks, with a transitional learning phase which wouldleadintofree-marketprocessesamongbiodieselproducers,distributors and refineries — the medium and long-rangeoutcometheNationalBiodieselProgramenvisioned.
Thepurchaseauctionshaveplayedadecisiverole in gradually consolidating Brazil’s biodieselmarket.Theextenttowhichtheywereattractiveto industrycanbeseenbytheexcessofsupplyoverdemand, shown in Table1.Another impor-tantoutcomewastheaveragepricereductionbe-tweenthefirstandfourthreverseauctions,whichcameto9.1%innominalterms.Thisshowsthatthenation’sindustryhasbeenmovingalongthelearningcurveandofferingbiodiesel for saleatprices growing increasingly competitivewith conventionaldieselfuel.
Theriseintheaveragepriceatthefifthreverseauctionshouldnotbeinterpretedasareversalofthattrend,forthatreverseauctionwasheldforthespecificpurposeofoffset-tingsmallshortfallsinbiodieselcontractedfordeliverydur-ingearlierauctions.Thisreducedthenumberofbuyers,thatreverse auction was only open to companies already fullyoperationalandhavingidlecapacitywithwhichtopromptlyoffsetthoseshortfalls.
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Table1-SummaryofBiodieselPurchaseAuctions
AtthefivereverseauctionsheldbytheANP,therewere17successfulpurchasers (with24 industrialplants).Thesebuyerswillinturnsell885millionlitersofbiodieselthroughDecember, 2007. Producing that total volume will provideemployment opportunities for some 210,000 smallholderfamilies.
Chart3showsthepercentagedistributionoverthetotalvolumechanginghandsatallfivereverseauctions.Thecom-binedshareforthetwopoorestregionsinBrazil(NorthandNortheast)willbe48.9%.Smallagri-producers’shareinthesalesofbiodiesel feedstockarrangedat these reverseauc-tionswillbe35%ofthetotal(310.5millionliters).
Reverse Auction
Date
No. of Participants
Volume Offered
Volume Sold Delivery
Timeframe
Average net price of ICMS
(R$/liter)Millions of Liters
11/23/2005 8 92 70 January-December/2006 1.905
03/30/2006 12 315 170 July/2006-June/2007 1.860
07/11/2006 6 125 50 January-December/2007 1.754
07/11/2006 25 1141 550 January-December/2007 1.747
02/13-14/2007 7 143 45 Immediate 1.862
TOTAL 885 --- ---
Reverse Auction
Date
No. of Participants
Volume Offered
Volume Sold Delivery
Timeframe
Average net price of ICMS
(R$/liter)Millions of Liters
11/23/2005 8 92 70 January-December/2006 1.905
03/30/2006 12 315 170 July/2006-June/2007 1.860
07/11/2006 6 125 50 January-December/2007 1.754
07/11/2006 25 1141 550 January-December/2007 1.747
02/13-14/2007 7 143 45 Immediate 1.862
TOTAL 885 --- ---
Originaldatasources:
AnPandMMe.
Originaldatasources:
AnPandMMe.
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Chart3–RegionaldistributionofReverseAuctionSales
NortheastNorth SouthSoutheastMidwest
37.9%
11%
17.7%16.7%16.8%
Table2showscomparativedataessentialtoanyanalysisofthesocialandregionalimpactofbiodieselreverseauctionoutcomes. They show that of the total volume contractedfor,thesharecomingfromthetwopoorestregionsinBra-zil (North and Northeast) will be approximately 4.7 timestherelativefractionofbiodieselfeedstock(cotton,peanut,sunflower,castorbean,soybeanandpalmoil)theseregionsproducedin2004,whentheNationalBiodieselProgrambe-gan.Thesametableshowsthatsmallholderfamilies’shareofbiodieselfeedstockcontractedforatthereverseauctionsisnearly10timesthesmallagri-producers’proportionalcontri-butiontoBrazil’sGDP.
Table2-SocialandRegionalimpactofthe5BiodieselReverseAuctions
Originaldata
source:Agrarian
development
Ministry.
Originaldata
source:Agrarian
development
Ministry.
North and Northeast Region Shares Family-Owned Farm Share
OilseedCropRevenue(Datafor
2004)
BiodieselProduction(Datafor
2006/2007)
AgriculturalGDP
(Datafor2003)
BiodieselFeedstock(Datafor
2006/2007)
10.3% 48.9% 3.6% 35%
North and Northeast Region Shares Family-Owned Farm Share
OilseedCropRevenue(Datafor
2004)
BiodieselProduction(Datafor
2006/2007)
AgriculturalGDP
(Datafor2003)
BiodieselFeedstock(Datafor
2006/2007)
10.3% 48.9% 3.6% 35%
Originaldata
sources:MdA
andBrazilian
Geographicaland
Statisticalinstitute
(iBGe).
Originaldata
sources:MdA
andBrazilian
Geographicaland
Statisticalinstitute
(iBGe).
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Eventhoughscarcityofdataandtimeframesforcompari-sonherearehardlyideal,theseindicatorsneverthelessshowthat the purchase auctions have done their share toward
helpingtheNationalBiodieselProgramachieveitsprimarygoalsof reducing regionaleconomicdis-paritiesandincludingagri-producerfamiliesinthebiodieselsupplychain.
BiodieselsalesfiguresforBrazilalsoshowsig-nificantresults.TheB2dieselblendisalreadysoldat5,000distributioncentersoutof35,600intheentirecountry.AsofMayof2007,therewere27plantslicensedbytheANPtomanufacturebiodie-sel,withatotalinstalledcapacityof1.21billionlitersperyear.Another30units,withaggregatecapacity of 1.74 billion liters per year, have al-readyappliedfortheir licensesandshouldbeginoperatingbytheendof2007.Plantsbeingbuilt(7)and thoseat the feasibility studystage(25)add up to an annual manufacturing capacity ofsome1.65billionliters,andareexpectedtobeginoperatingbytheendof2008.
Takingintoaccountonlythe27unitsalreadylicensed to manufacture biodiesel, their annualcapacity (1.21 billion liters) suffices to providethevolumenecessaryforthemandatoryB2blend(about800millionlitersperyear).Iftothisweadd the30units in thefinal stagesof licensingor undergoing expansion, aggregate manufactur-ingcapacityincreasesto2.95billionliters,whichismorethansufficienttomeettherequirementsfortheB5mixture(approximately2billionliters/year).
bioDiesel sales figures for brazil
also show significant results. the b2
Diesel blenD is alreaDy solD at 5,000
Distribution centers out of 35,600 in
the entire country. as of may of 2007,
there were 27 plants licenseD by the anp
to manufacture bioDiesel, with a total
installeD capacity of 1.21 billion liters
per year. another 30 units, with aggregate
capacity of 1.74 billion liters per
year, have alreaDy applieD for their
licenses anD shoulD begin operating by
the enD of 2007.
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These data clearly show that the timetable could bemovedupontheB5mixturerequirements,orevenforblendsofmorethan5%,dulysupportedbyvehicletestsorANPau-thorization.Biodieselexportsareanotherpossibility,sinceprojectedmanufacturingcapacityforlate2008issomethinglike3.5billionlitersofbiodieselperyear.
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ClosingComments
Brazil’s National Biodiesel Program sets an ex-ample of public policy designed and implementedwithbroadparticipationinsupportoftheprimaryactorsinvolvedinthesupplychainforthisrenew-ablefuel.Brazil’sbiodieselmarketisenactedinlawandregulated,andalsosupportedbydifferentiatedtax incentives.It isprovidedwith instruments forfinancing the supply chain, research efforts andtechnological development in its agricultural andindustrial stages (including international coopera-tion), aswell as for testing componentparts andengineswiththediesel/biodieselblendinvaryingproportions, and for the organization of agri-pro-ducerfamilies.
At the heart of Brazil’s Biodiesel Program is acommitmenttoprovidethemostefficientpossibleprotectiontotheweakestlinksinthesupplychain:familyfarmsandconsumers.TheSocialFuelStampprovidesdifferentiatedtaxincentivestocompaniesprocessing feedstock produced on family-ownedfarms and feedstock originated in the neediestpartsofthecountry.Attheotherendofthechain,physicalandchemicalspecificationstogetherwithtoughstandardsforinspectionareindispensableifconsumersaretohaveaccesstoqualityfuelandbe-comeconfidentsupportersofBrazil’spolicy–uniquethroughouttheworld–ofstrengtheninganenergymixwhichdailygrowscleaner,moresustainableandlessdependentonoil.
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Given the resultsalreadyachievedandpoliciesputinplacebythenation’sBiodieselProgram,Bra-zil is in a position to enlarge and consolidate itsleadershippositionintheproductionanduseofre-newableenergyresources–especiallywithitsrela-tiveadvantagethroughavailabilityanditsdiversityofsoilandclimateconditions.Improvementstoag-riculturalmethodsanduseofareasextensivelyded-icated tocattleproductionare theprimarymeansBrazil has available to increase energyproductionfromsustainablesourceswithoutputtingcompeti-tive pressure on food supplies or putting a strainonsuchareasastheAmazonregion,whereoilseedcultivationforbiodieselmanufacturingcanbecar-riedoutindegradedareas,therebycontributingtotheirrecovery.
Itisthusasustainabledevelopmentprograminthe broadest possible sense (environmental, eco-nomic,social,technologicalandstrategic),gener-ating agrarian income and employment, reducingeconomicdisparitiesamongregions,savingonhardcurrency,diversifyingsourcesofenergy,benefitingtheenvironment,helpingtorevitalizelocalandre-gional economiesandputtinghuman resources inthepoorestregionsintouchwithaboomingmar-ket.
The outlook for Brazilian biodiesel on interna-tionalmarketsisalsofavorableandpromising.Thisis partly due to thegrowingdemand for biofuels,reinforcedbyincreasingpublicawarenessoftheen-vironmentalconsequencesofvehicleemissionsand
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gainstobehadbyreplacingpetroleumproductswithalterna-tiveenergysources.Brazil’sdiplomaticmissionsarejoiningforcesinmultilateraleffortsaimedatcreatinginternationalmarketsforbiofuelsandjointlyestablishingtechnicalcodesandstandardsforthesealternativefuels.TheirpurposeistoenabletheBraziliangovernmenttocontributetowardtheseoutcomes, especially in view of Brazil’s pioneer efforts intheproductionandapplicationofrenewablefuelresources,withtheagriculturalpotentialofitsgeographiclocation,thevastnessofitsterritoryandthediversityofthenation’ssoilandclimate.Theidealistomakerenewablefuelsacommod-ityitem,andtoenterintobilateraltechnologicalcoopera-tionagreementswhichwillcontributetowardexpandingandconsolidatingmarketsforbio-basedfuels.
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