Abstract
Strong policy mechanisms are one of the most important factors to enable biofuels production in a country. While technology-push policies are important to allow faster development in new technologies and to create supporting mechanisms, market-pull instruments appear to be central for biofuels development worldwide, given the presence of positive externalities that are not autonomously recognized by the market system. This chapter brings an overview of the most prevalent market-pull instruments in place (mandates, exemptions, and carbon related mechanisms) and few examples of policies implemented in major markets, outlining their main mechanisms. It presents a more detailed discussion about the new biofuels policy in Brazil (RenovaBio) as an example of carbon-related mechanism that could be explored in other developing countries with substantial bioenergy potential, recognizing the contributions that biofuels can give to climate change mitigation. As land use change is arguably the most important (and contentious) aspect to be considered in any biofuels policy, the chapter briefly addresses the concept behind this subject as well as its potential implications for the environmental benefits perceived for biofuels.
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Notes
- 1.
The Biofuture Platform is a government-led, multistakeholder coalition of 21 countries, launched in November 2016 during UNFCCC COP 22. It seeks to promote increased policy alignment and convergence around the most efficient and impactful programs and instruments to promote sustainable bioenergy deployment. The most recent effort from the coalition is the Policy Blueprint, which “aims to accelerate the growth of the sustainable bioeconomy by providing countries with the methodologies, tools and practical guidance to evaluate and improve the impacts and effectiveness of their bioenergy and bioeconomy policies” (Biofuture Platform 2016).
- 2.
The RenovaBio Committee includes representatives of the MME (coordination); Civil House of the Presidency of the Republic; Ministry of Economy; Ministry of Infrastructure; Ministry of Agriculture, Cattle and Supplying; Ministry of Science, Technology, Innovations and Communications; and Ministry of the Environment (Art. 13 of Decree 9888/2019). The regulation allows the participation of other public and private institutions, technicians, and specialists in the biofuels sector.
- 3.
Particularly for Brazil, several indices and parameters in the GTAP model, and even productive structures, were inadequate. Hundreds of letters with criticisms and recommendations were sent to US regulators, most of them containing comments regarding iLUC (CARB 2009). With respect to sugarcane ethanol, an extensive letter compiled by the Sugarcane Industry Association (UNICA) (Jank and Velasco 2009) mentioned the inadequacy of general equilibrium models to obtain precise values; issues regarding the shock size; underestimation of the livestock intensification capacity in Brazil; incorrect elasticities; poorly dimensioned and unequal scenarios for the cases studied; outdated sugarcane productivity; inaccurate biomass stocks for Brazil; and incorrect emission factors for sugarcane.
- 4.
Modelling limitations relate essentially to the difficulty of incorporating real observations (i.e., land use pattern via satellite images) that are suitable to the regional characteristics in Brazil. Further, models still fail to identify and simulate effective land use change (effective substitution between uses, not resulting land use amounts) and to properly incorporate the livestock dynamics (technological levels, production systems and regional systems), the evolution of second and third harvest technology and its dynamics, the new technologies in the sugarcane industry, and to consider more accurate GHG emission coefficients associated with land use.
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Godinho, R., Lacerda de Oliveira, M.I., Rodrigues, L., Moreira, M., E. A. Seabra, J. (2022). Carbon Credits and the Bioethanol Industry: Governmental Programs and Incentives. In: Soccol, C.R., Amarante Guimarães Pereira, G., Dussap, CG., Porto de Souza Vandenberghe, L. (eds) Liquid Biofuels: Bioethanol. Biofuel and Biorefinery Technologies, vol 12. Springer, Cham. https://doi.org/10.1007/978-3-031-01241-9_16
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