TWELFTH EDITION OF THE BIOFUELS CONJUNCTURE ANALYSIS The Analysis of Biofuels’ Current Outlook, one of the main publications of Empresa de Pesquisa Energética – EPE (Energy Research Office) presents the relevant facts occurred in the year prior to its publication. This twelfth edition highlights the new historical records for sugar and biodiesel production in 2020, also the growth in corn ethanol production and, within the scope of RenovaBio, the date of commencement of decarbonization credits sales at stock exchange. The main themes covered annually in this document are: supply and demand of ethanol and its production and transportation infrastructure; biomass participation in the electric national matrix; biodiesel market and the international market for renewable fuels, the monitoring of RenovaBio, in addition to new biofuels. This year, the traditional article published with the edition brings as a central theme the potential of the biofuels sector contribution to the achievement of the Sustainable Development Goals (SDGs) for the UN 2030 Agenda, through the analysis of biodiesel production and its interrelationship with family farming, within the scope of the PNPB (National Program for the Production and Use of Biodiesel). In 2020, the Covid-19 pandemic impacted the fuel market, including biofuels. The ethanol production decreased 9.5% compared to 2019, reaching 32.6 billion liters. There was a greater allocation of the mix towards sugar production, due to the increase in the price level at international market, combined with devaluation of national currency and the consumption contraction of hydrous ethanol in Brazil. Sugar production and its exports presented a record of 41.5 million tons and of 31.6 million tons, respectively. Corn ethanol production reached 2.4 billion liters, a rise of 82% compared to the previous period. The country maintained a positive balance in the international ethanol trade as observed in 2019. Hydrous ethanol average price decreased 6.4% in 2020 compared to the previous year, while gasoline C dropped 10.7%, constant value of December 2020, which resulted in relative price (EP / GP) of 68.9%, higher than the value in 2019, 66.4%, still favorable to biofuel. In 2020, 2.0 million new light vehicles were licensed in Brazil, 27% less than in 2019 and at the same level of 2016, after three consecutive increases in annual light vehicle licensing. The impact of Covid-19 resulted in a sale constraint at the first months of social distance. Thus, hydrous ethanol consumption decreased 14.7%, reaching 19.8 billion liters, the demand for gasoline C also declined to 36 billion liters, which resulted in a 9.2% reduction in total Otto cycle demand, and registered 49.8 of billion liters of equivalent gasoline. This year, Brazilian fleet of Otto cycle light vehicles maintained the same level, totaling 38 million units, with flex fuel technology representing 80%. Bioelectricity from sugar-energy plants injected into the National Interconnected System was 2.6 GWméd in 2020, similar to the amount 2019. In relation to biodiesel, the mandatory percentage was raised to 12% in March 2020, according to the schedule provided for in the legislation. In this way, its production registered a new record of 6.4 billion liters, 10% higher than 2019. As the CNPE resolution n o 14 / 2020, biodiesel marketing systematic will change from
January 2022, when producers and distributors will negotiate directly. In 2020, there was a public consultation
for green diesel regulation, enacted in 2021, thus allowing its trade in Brazil.
Emissions avoided by the use of ethanol, biodiesel and sugarcane bioelectricity in 2020 were 46.8 MtCO
2
eq,
18.1 MtCO
2
eq and 2.4 MtCO
2
eq, respectively, adding up to 67.3 MtCO
2
eq.
Concerning biogas, the installed capacity in distributed generation keep increasing from 2019 to 2020,
reaching 42 MW, using as input mainly agroindustrial, animal and waste residues. In addition, its participation
in the internal energy supply (0.1%) has been growing by 27% p.y. in the last five years.
Among the new biofuels, HVO (Hydrotreated Vegetable Oil) and aviation BioQAV (biokerosene) deserve special
attention. In the case of HVO, the document presents the characteristics that may influence its penetration in
Brazilian fuel market. As for BioQAV, there are industrial and economic challenges so that it can become
competitive in face of aviation kerosene of fossil origin, in Brazil and in world. Hydrogen is a future bet, with
several projects being launched around the world, in a consortium of energy companies.
The year of 2020 was memorable to the National Biofuels Policy – RenovaBio, with the start of CBIO
commercialization in the Brazilian stock exchange (B3). Until December 2020, 239 producing units were
certified, with the majority being ethanol. The effects of Covid-19 pandemic in fuels demand impose the need
to adjust the compulsory targets of GHG emissions reduction for the fuels trade. In 2020, 18.2 million CBIO
were issued, 22% above the target (14.9 millions CBIO) and the total retired by fuel distributors represented
97.6% of the established goal. CBIO commercialization has evolved through distinguished phases, and the
weighted average price was R$ 43/CBIO.
The Analysis of Biofuels’ Current Outlook in this edition addresses a crucial theme in the article entitled “The
National Program of Production and Use of Biodiesel, Family Farming and the interfaces with 2030 Agenda”.
The text analyzed the potential contribution from biofuel sector in achieving the Sustainable Development
Goals (SDG) for 2030 Agenda through the biodiesel production and its interrelation with the family farming,
under PNPB. The insertion of the family farming in an energy program represents an innovative model, with
technical support improvement and family income rise. This PNPB arrangement touches upon several SDG,
such as eradicating hunger, improving the life quality, increasing income, reducing social inequality,
developing a more productive and sustainable agriculture, in addition to the production of a renewable biofuel,
which contributes to mitigate climate change effects.
The twelth edition of the Analysis of Biofuels’ Current Outlook of the Empresa de Pesquisa Energética (EPE) -
is available on the EPE’s website, at www.epe.gov.br .