According to figures from consulting firm DATAGRO, global ethanol production grew by 3.6% in 2021. Brazil is now the second largest producer of this fuel, which rivals electric cars in the race for more sustainable automobiles, given that it emits less polluting gas into the atmosphere. In an attempt to understand how “green” ethanol really is, a study by Fundação Getulio Vargas used satellite monitoring to create an economic model, based on data, capable of analyzing the use of land for sugarcane growing.

With regard to land use, Marcelo Sant’Anna, a researcher at the Brazilian School of Economics and Finance (FGV EPGE), explains that there are two ways to increase sugarcane production: the first is to replant more often and the second is to expand this crop into new areas. “Our study found that when production increases in Brazil, only 8% of the new ethanol comes from sugarcane that has been planted more intensively. The other 92% comes from new areas,” he says.

Sant’Anna, who led this research project, points out that the demand for fuels has been increasing in recent years, as has the need to reduce damage to the environment. “In this context, there are already numerous studies analyzing the carbon cycle and net emissions in the process of producing ethanol. However, this study set out to draw attention to the consequences related to land use, since the expansion of sugarcane to produce biofuel will be at the expense of other crops,” he says.

He points out that expanding sugarcane plantations may enter lead to deforestation around the country, as well as taking up space that could be used for other agricultural crops, such as soybeans and various food crops. “In this research, we identified that 20% of these new areas were originally forests, which implies deforestation to produce the plants that give rise to this biofuel. Another 70% of the new areas were either pasture land or they grew other crops, such as corn and wheat,” he adds.

The model created by the FGV researchers makes it possible to analyze where sugarcane plantations are expanding and what is happening to other crops. “It’s currently cheaper to expand into new areas than to intensify the replanting of existing ones. As most of the expansion of production is taking place in new areas, it is essential to understand the determinants of this process in order to formulate public policies,” Sant’Anna says.

Technology and statistics

To adjust this economic model, the study used satellite images from the National Institute for Space Research (INPE), which mapped all the sugarcane-growing areas in Brazil, amounting to more than 1 million points on the map, which were monitored for more than 10 years. The researchers tracked not only planting on new land, but also replanting in existing crop areas.

“This study provides references for discussions about how green sugarcane really is in terms of carbon emissions. If we look at how this increase in production occurs along the supply curve, we can better understand the impacts of policies to promote ethanol. Because sugarcane is a semi-perennial plant, when planted it will generate a lower yield each year, until it reaches the point where it needs to be replanted. There is therefore a channel through this replanting process that allows yields to increase. However, what we found is that, despite being present, this intensification mechanism is much less relevant than expansion into new areas of cultivation,” Sant’Anna adds.

Using this new dynamic model adjusted for Brazilian data, he believes it is possible to carry out public policy experiments by investigating how sugarcane production increases. “If ethanol production is coming from new sugarcane plantations, it raises alarm bells regarding environmental issues or possible interference in the production of other agricultural commodities,” he says.

Sant’Anna argues that the situation warrants a more careful examination, because answering the question “How green is sugarcane?” depends fundamentally on what happens to the areas used to grow this plant. “Our role is not to say whether ethanol is good or bad, but to understand the entire production cycle and the real impact of this fuel, which is considered green,” the researcher concludes.