Bioeconomy Observatory launches report on fuel source decarbonization

The Bioeconomy Knowledge and Innovation Observatory at Fundação Getulio Vargas’ Sao Paulo School of Economics (FGV EESP) has just launched a report called the “Light Fuel Source Decarbonization Dashboard.” The aim is to monitor the dynamics of fuel consumption in Brazil, on a quarterly basis, paying special attention to analysis and understanding of the effects of bioenergy on reducing greenhouse gas emissions.

According to the report, Brazil’s greenhouse emissions from light fuels amounted to 27.30 million metric tons of carbon dioxide equivalent (CO2eq) in the third quarter of 2022, up 6.52% from 25.63 million in the same period of 2021. This growth was due to higher consumption of light fuels and an increase in gasoline’s relative share of consumption.

The report also shows that in the third quarter of 2022, 416.06 billion megajoules (MJ) were consumed by light vehicles, up 5.74% from the same period of 2021. As a result, despite a gain in energy efficiency in the production of biofuels, higher consumption and renewables’ lower share of energy sources led to higher greenhouse gas emissions in the third quarter of 2022.

On the other hand, greenhouse gas emissions avoided by the use of bioenergy increased 3.46% in the third quarter of 2022. As a result, atmospheric emissions of 9.06 million tons of CO2eq were avoided. To obtain the same result in terms of avoided greenhouse gas emissions, it would be necessary to plant 22,100 hectares of native trees.

“Brazil stands out in the transportation sector for its high share of bioenergy and its supply of biofuels with an audited carbon footprint. Our analysis will allow periodic monitoring of greenhouse gas emissions in this sector, identifying gains in environmental efficiency in the production of biofuels, the impacts of public policies and the adoption of differentiated business strategies in this market,” explain the authors of the Light Fuel Source Decarbonization Dashboard, Luciano Rodrigues, Fernanda Valente and Sabrina Matos, who are all researchers at FGV’s Bioeconomy Knowledge and Innovation Observatory.

Certification and carbon intensity of biofuels

The average carbon intensity of anhydrous ethanol sold in the third quarter of 2022 was 26.48 gCO2eq/MJ, down 1.19% from the same period of 2021. In the case of hydrous ethanol, average carbon intensity was 28.54 gCO2eq/MJ, down 0.94% year-over-year.

This reduction in the average carbon intensity of biofuels is related to gains in energy efficiency recorded by companies that recertified their production. By the end of the quarter, around 65 production units had renewed their production certification. Of this total, 46 companies presented gains in energy efficiency and consequently a reduction in the carbon intensity of the biofuel produced.

According to figures from the National Oil, Natural Gas and Biofuels Agency (ANP), 284 ethanol producing units in Brazil were certified at the end of the third quarter of 2022. These companies account for roughly 90% of the country’s biofuel production.

Fuels’ share of energy consumption in Brazil

The report also shows that despite biofuels’ energy efficiency gain, the average carbon intensity of light fuels (the greenhouse gas emissions of gasoline and ethanol) rose 0.74% in the third quarter of 2022. The average carbon intensity of light fuels was 65.62 gCO2eq/MJ in the quarter of 2022, compared to 65.14 gCO2eq/MJ in the same period of 2021.

This was due to a decrease in ethanol’s share of energy consumption in Brazil. In the third quarter of 2022, biofuels accounted for 36.43% of total energy consumed by light vehicles, down slightly from 37.45% one year earlier.

The increase in gasoline’s share of energy consumption in the third quarter of 2022 was caused by biofuel’s loss of competitiveness and the lower supply of sugarcane for milling in the period in question. The deterioration in ethanol’s competitiveness was due to the reduction in gasoline prices and, above all, tax cuts at the beginning of the third quarter, which reduced the difference in tax between gasoline and renewable fuels.

Average carbon intensity (gCO2eq/MJ) in different Brazilian states

Looking at different Brazilian states, the average carbon intensity of light fuels differs considerably. Mato Grosso, Goiás, Minas Gerais and Sao Paulo are the states that use bioenergy the most and they therefore have the lowest relative levels of greenhouse gas emissions originating from fuel combustion in light vehicles.

You can see the full study here.