Bioenergy avoids 13.3 million tons of CO2 emissions in second quarter, study reveals

Fundação Getulio Vargas’ Bioeconomy Knowledge and Innovation Observatory has just launched another edition of its decarbonization dashboard, encompassing light fuels. The aim is to monitor the dynamics of fuel consumption in Brazil on a quarterly basis, with a special focus on analyzing and understanding the effects of bioenergy on reducing greenhouse gas emissions.

The results for the second quarter of 2023 include the following: 

• In the second quarter of 2023, consumption of light fuels grew 11.5% and diesel consumption rose 3.3% compared to the same period of last year.
• Despite a 2.0% gain in energy and environmental efficiency in ethanol production, the drop in biofuel’s share of total consumption led to a 3.4% worsening in the carbon intensity of light fuel, which was 66.4 gCO2eq/MJ.
• A 3.5% gain in energy and environmental efficiency and increase in the amount of biodiesel added to diesel led to a 2.1% improvement in the carbon intensity of diesel, which was 76.7 gCO2eq/MJ.
• Total greenhouse gas emissions amounted to 28.0 million metric tons of CO2eq from light fuel consumption (+15.2%) and 44.4 million tons from diesel consumption (+1.5%).
• The emissions avoided by the presence of bioenergy totaled 13.3 million tons of CO2eq in light and heavy vehicles (+8.0%) in the second quarter of 2023 alone, which is equivalent to planting 32,300 hectares of native trees.

“In the second quarter, we started to monitor diesel emissions. The results obtained in this expanded version of the report show how public policies, changes in the regulatory framework and market conditions affect the dynamics of emissions in the transportation sector in Brazil,” says Luciano Rodrigues, a researcher at the Bioeconomy Knowledge and Innovation Observatory and the study’s coordinator.

1. Light fuels 

1. Consumption and carbon intensity

Following the trend observed in the first quarter of this year, ethanol’s share of light fuel consumption fell in the second quarter of 2023.

Hydrous ethanol, sold directly at gas stations, accounted for only 17.9% of the energy used by light vehicles in the second quarter of this year, down significantly from 22.9% in the same quarter of 2022. As a result, ethanol represented 34.7% of the energy consumed in the light fuel sector, down from 38.6% in the same period of last year. (See Figure 1.)

Biofuel’s lower share was mainly due to the loss of competitiveness and lower consumption of hydrated ethanol in the first six months of this year. During this period, Executive Order 11,157 of January 1, 2023 postponed the resumption of federal taxes on light fuels, damaging the competitiveness of hydrous ethanol. In turn, Executive Order 11,163 of 2023 was issued at the end of February, providing for only a partial reinstatement of these taxes by the end of June. Consequently, the resumption of taxes, previously scheduled for the beginning of January, only took place in full on July 1.

This was linked to the announcement of the change in gasoline pricing in the domestic market and frequent changes to the taxation of this product in the first six months of 2023. As a result, ethanol consumption fell short of that recorded in 2022, increasing the carbon intensity of Brazil’s light fuel consumption.

In this context, the average carbon intensity of light fuel consumption was 66.4 gCO2eq/MJ in the second quarter of 2023, up 3.4% from 64.2 gCO2eq/MJ in the same quarter of the previous year. This indicator assesses greenhouse gas emissions from the burning of one unit of energy (megajoule) by light vehicles in Brazil.

The worsening of the carbon indicator for light fuel would have been even worse had it not been for a gain in the energy and environmental efficiency of ethanol sold in the period. The average carbon intensity of hydrous ethanol improved 2.2% in the second quarter of 2023, year-over-year, from 28.1 to 27.5 gCO2eq/MJ. The same movement was observed in the case of sold anhydrous ethanol, whose carbon intensity was 26.1 gCO2eq/MJ in the second quarter of 2023, compared to 26.3 gCO2eq/MJ in the same period of last year.

1.2 Number of certified plants

By the end of June of this year, there were 275 hydrous ethanol plants certified in line with the National Biofuel Policy. In the case of anhydrous ethanol, there were 183 certified plants at the end of the second quarter of 2023.

1.3 Greenhouse gas emissions

Greenhouse gas emissions from light fuels totaled 28.1 million tons of CO2eq in the second quarter of 2023, up 15.2% from 24.3 million in the same period of 2022. These higher greenhouse gas emissions are explained by the aforementioned worsening in the carbon intensity of light fuel consumption and an 11.5% increase in light fuel consumption in the country.

In short, despite the gain in energy and environmental efficiency in ethanol production, higher consumption and biofuels’ lower market share led to higher greenhouse gas emissions in the second quarter of 2023.

1.4 Greenhouse gas emissions avoided by bioenergy

Although biofuels’ relative share of fuel consumption fell, the emissions avoided by the presence of bioenergy in light fuel consumption totaled 8.9 million metric tons of CO2eq in the second quarter of 2023. To achieve the same result, it would be necessary to plant 21,600 hectares of tropical forest. 

2. Diesel

2.1 Consumption and carbon intensity

Consumption of “B Diesel” (a mixture of pure diesel and biodiesel) amounted to 16.0 billion liters in the second quarter of 2023, up 3.4% from 15.5 billion liters in the same period of 2022.

The average carbon intensity of diesel consumption was 76.7 gCO2eq/MJ in the second quarter of 2023, an improvement of 2.1% compared to the second quarter of 2022 (78.4 gCO2eq/MJ). This indicator is calculated by weighting the carbon intensity of 86.5 gCO2eq/MJ for pure diesel with the figure of 17.6 gCO2eq/MJ for biodiesel.

Biodiesel sold in the second quarter of this year also showed a 3.5% improvement in carbon intensity, from 18.2 gCO2eq/MJ in the second quarter of 2022 to 17.6 gCO2eq/MJ in the same quarter of this year.

Therefore, the aforementioned improvement in the carbon intensity of diesel consumption stems from the gain in energy and environmental efficiency associated with biodiesel production and the increase in biodiesel’s share of disease sold. The volumetric blend of biodiesel in B Diesel was increased in April of this year from 10% to 12%.

 2.2 Number of certified plants

At the end of June of this year, there were 37 biodiesel plants certified under the National Biofuel Policy.  

 2.3 Greenhouse gas emissions

Greenhouse gas emissions from diesel consumption totaled 44.4 million tons of CO2eq in the second quarter of 2023, up 1.5% from 43.7 million in the same period in 2022.

These higher greenhouse gas emissions in diesel consumption are explained by the growth in B Diesel consumption in Brazil, which rose from 15.5 billion liters in the second quarter of 2022 to 16.0 billion in the same quarter of this year.

If the improvement in the carbon intensity of biodiesel and biofuel’s greater share of total consumption had not happened, greenhouse gas emissions from diesel consumption would have grown 3.3%, compared to the actual result of 1.5% recorded in the period.  

2.4 Greenhouse gas emissions avoided by bioenergy

In the second quarter of 2023, bioenergy in diesel avoided greenhouse gas emissions equivalent to 4.4 million tons of CO2. This is significantly higher than the 3.5 million tons of CO2eq avoided in the second quarter of 2022.  

To achieve the same result in terms of avoided greenhouse gas emissions in the second quarter of 2023, it would be necessary to plant 10,700 hectares of tropical forest.