INSTITUTE FOR SUSTAINABLE FUTURES

Biofuel Production: THINK.

CHANGE.
DO

considerations from Brazil

 Biofuels- transforming Timor-Leste?
Timor-Leste may
soon need to
confront issues
associated with
biofuel
production
appropriate time to
reflect on the global
scene for biofuels
Photo: Road in Covalima District (Sarina Kilham)
 Biofuel Overview

Biofuels: liquid or gaseous fuels derived

from organic matter such as plant material
or animal waste.

Also known as agrofuels, reflecting the

current situation where the majority of
biofuel is produced from agricultural
commodities
 Ethanol and biodiesel
Ethanol
• liquid fuel generated from
converting bio-mass into sugar
and then fermenting the sugar
• Common feedstock is sugar
cane or corn
• Most widely used and traded
internationally
• USA and Brazil biggest
producers and consumers
Biodiesel
• biodiesel is produced from
organically-derived oils or fats
• Common feedstock is soy
bean, palm oil, jatropha
• Limited international trade
• Indonesia and Malaysia
biggest producers, EU biggest
consumer
World Biofuel consumption projection

International Energy Agency World Energy Outlook 2008

p172
 Brazil
191 million
people

Producing
since 1970s

Biggest
consumer
until 2004

Photo Source: http://news.mongabay.com/bioenergy/

 1975- ‘PROALCOOL’ - Promoted production and
domestic consumption of ethanol by policy measures

• Quotas
• subsidies to bioethanol producers
• fixed purchasing price
• government control
• distribution by monopolistic agent (Petrobras)
• installation of bioethanol bowsers at every
Petrobras Fuel Station
• tax incentives for car owners
• soft loans
 ‘PROALCOOL’ in 2009

• Liberalised but policy measures remain

(e.g. Mandated 20-25% mix, FFV)
• Industry is thriving and Brazilian remains
the world’s largest exporter
BUT
• development and benefits have
not been uniform across the nation
 2005-‘PROBIODIESEL’

Small farmers Regional positive

development environmental
impact
Images from Biofuel Watch Center and Government of Brazil
 PROBIODIESEL
Social Fuel Stamp
Aims to promote social inclusion. Producers receive ‘stamp’ when they
meet minimum social inclusion criteria. Industrial producer must:

• purchase a minimum percentage of feedstock from family farmers

located at different geographical points in Brazil

• enter into a legally binding agreement with family farmers to

establish specific income levels and deadlines and conditions of
delivery of feedstock

• guarantee technical assistance and training

 Challenges

• Costs for the technical assistance are often

higher than Social Fuel Stamp tax exemptions

• operational costs of managing thousands of

contracts with geographically dispersed small
farmers was difficult.

• Research is showing patterns of biodiesel

production and processing are similar to that of
ethanol, despite policy measures
 Global Policy context
• The biggest producers and users of biofuels at a global
level are interested in quite different aspects of biofuels
(e.g. Some for climate change mitigation, some for
political influence)

• multilateral rules that govern biofuels are neither unified

nor consistent- bioethanol and biodiesel are classified
differently under World Trade Organisation rules

• Ethanol and biodiesel are subject to very different

permitted tariff and subsidy rules (more refined = higher tariff).
 Governance of Biofuel is complex...

In Brazil, at least 6 of 24 government Ministries

involved:

• Ministry of Agriculture, Livestock and Supply: responsible for large-scale industrial farming and the development of
agricultural technologies
• Ministry of Science & Technology: supports research in advanced agricultural technologies such as biotechnology
• Ministry of Development, Industry & Trade: export development
• Ministry of Mines and Energy: supports the development of biofuels
• Ministry of Agrarian Development: responsible for small scale, family and subsistence farming and social inclusion
issues.
• Ministry of Social Development & the Fight against Hunger: has a poverty reduction mandate

Policy in Timor will also involve several Ministries

 the road ahead for Timor..

• Demand: big BUT the global context is changing

Timor-Leste would be ‘price-taker’
• Benefits: possible benefits for rural development
if focused on local consumption; needs
to be part of a diverse farming system
• Policy: social + environmental + economic
Specific measures to address equity.
Government needs to be involved
 Thank You

Sarina Kilham
Institute for Sustainable Futures
www.isf.uts.edu.au
96091436@uts.edu.au
Skype: sarinakilham
Tlp: 745 9909