Brazil is often characterized as an emerging environmental power, given its rich natural resources and biodiversity and its large-scale production and use of renewable energy (Dauvergne and Farias, 2012: 912; Hurrell, 2010: 44; Sotero and Armijo, 2007: 7).It is also seen as a quintessential
“developmental” state, one wherein the “idea of development has long been a fundamental value with great political and policy resonance within Brazil’s political [and foreign policy] discourse” (Dauvergne and Farias, 2012: 906; see also Hochstetler and Montero, 2013). President Lula da Silva (2003–2010) and his successor Dilma Rousseff (2011–) have sought to emphasize Brazil’s role on the global stage as an emerging world power that advocates for fairness in international trade relations. This includes pushing for recognition of the legitimate development agenda of the global South and encouraging South-South collaboration and coalition building (Sotero and Armijo, 2007).
Brazil and the US are the main producers and exporters of ethanol, augmented now by a growing (domestic) biodiesel market (Lamers et al., 2011). While ethanol production capacity temporarily declined in 2012, Brazil remains a frontrunner in this realm (A detailed discussion of Brazil’s domestic biofuels policy evolution is beyond the scope of this paper, but see Bastos Lima, 2012; Stattman et al., 2013). Brazil’s focus on biofuels dates back to 1970s’ concerns about energy security and dependence on fossil fuel imports, and concurrent recognition of the country’s immense agricultural potential as a source of alternative fuels (Stattman et al., 2013). The first domestic bioethanol policies were set up during the period of military dictatorship (1964–1985). Ernesto Geisel introduced the national program called ProÁlcool in 1975, promoting the use of ethanol (produced from sugarcane) as an alternative to fossil fuels for the transport sector. ProÁlcool addressed two urgent crises: the adverse impacts of high international oil prices that were affecting Brazil’s currency reserves, and the low (and falling) price of sugar on international markets, one of Brazil’s main traded crops.
The initial successes of ProÁlcool through the 1980s ran into hurdles in the 1990s, when declining oil prices and favorable sugar prices resulted in shortages of ethanol supply, and thus reduced
enthusiasm from consumers to use pure ethanol to fuel cars (Lehtonen, 2011; Stattman et al., 2013). By 2003, however, with the introduction of the flex-fuel car (which permitted a flexible mixing of ethanol and gasoline at the pump), the demand for ethanol rose again (Bastos Lima, 2012).Together with growing production capacity, such developments transformed Brazil into the second-largest producer of ethanol by 2011, although maintaining this position depends on changing dynamics of domestic demand and continuing prospects to increase production (EIA, 2012a, 2012b).
The success of ProÁlcool stimulated the government of President Lula da Silva in the early 2000s to (re)-consider alternatives for diesel fuel (for a detailed history, see Pousa et al., 2007). This resulted in the first national biodiesel policy, the National Program for Production and Use of Biodiesel (henceforth the biodiesel program), being launched in December 2004 (Brazilian law: Lei 11.097;
MDA, 2010). The biodiesel program sought to reproduce the successes of ProÁlcool with regard to fuel production capacity, along with several social, environmental, and developmental aims in addition to energy security. These included encouraging biofuel crop diversification (rather than focusing on a single crop, such as soybeans), spreading crop production regionally (rather than concentrating on one state/geographic area), and including small-scale family farmers in biofuel crop production (rather than relying exclusively on large-scale agribusiness) (Garcez and Vianna, 2009; Hall et al., 2009; Stattman and Mol, 2014). Many of these measures responded to perceived negative social and environmental consequences associated with ProÁlcool, such as large-scale (monoculture) sugarcane production, and concentrating production in specific regions (mainly the state of Sao Paulo).
To meet such multiple objectives, the government established blending targets for biodiesel in diesel, which have increased from 2 percent in 2008 to 7 percent in 201413. While this sent a strong signal to the market, biodiesel companies also needed a state-administered “Social Fuel Seal” to access this market on favorable terms, which could be obtained by buying a percentage of feedstock from small-scale family farmers. The government also introduced tax exemptions favoring use of local oil crops grown by small-scale farmers (such as castor beans) over commodity crops produced by large-scale commercial farmers in monocultures (such as soybeans). President Lula da Silva threw his political weight behind the biodiesel program, given its link to his national development agenda that called for special attention to family farming and economic development of poorer regions (César and Batalha, 2010; Watanabe et al., 2012).
As these elements suggest, the national biofuel debate in Brazil has evolved from an initial focus on energy security in the 1970s to include a broader social and developmental agenda (Lehtonen, 2011), even as such objectives have proven challenging to implement in practice. Thus, most biodiesel in Brazil is still produced from commodity crops such as soybeans rather than from castor oil, and from feedstocks grown by large-scale rather than small-scale family farmers (ANP, 2012). While this is partially because of lack of infrastructure and/or farmer expertise and experience with alternative crops (Hospes and Clancy, 2011; Stattman and Mol, 2014), large-scale biofuel production methods still dominate, and there are persisting internal conflicts within the Brazilian state about the
production versus social and developmental goals of the biodiesel program (César and Batalha, 2010; Garcez and Vianna, 2009; Hall et al., 2009; Stattman et al., 2013). In continuing efforts to
operationalize the social inclusion elements of this program, the government has instituted financial loan systems for farmers and support for local food production, with recent efforts to involve agricultural cooperatives (Stattman and Mol, 2014; Watanabe et al., 2012).
As described above, the ethanol and biodiesel programs in Brazil have been fueled by energy security, as well as economic and social development imperatives. Environmental concerns feature less prominently in domestic discourse. For example, the ecological risks of large-scale monoculture plantations of sugarcane and soybean have been debated, as has indirect land use change resulting from biofuels and associated biomass production. Some measures to reduce the negative
environmental impacts of burning sugarcane in manual harvesting have also been taken.
Nonetheless, there are few environmental regulations in place domestically that relate directly to biofuel production. The biodiesel program officially has an environmental pillar, yet in practice this calls for compliance with existing environmental legislation on deforestation and land use change (e.g., the Forest Conservation Code) and existing pesticide regulations, which Brazilian authorities view as sufficient but which also face implementation challenges (Nazareno, 2012). The rapid increase in biodiesel blending targets is likely to enhance reliance on the production capacity of large-scale monoculture-based agro-industry, rather than on more sustainable practices of small- scale family farmers (Garcez and Vianna, 2009; Goldemberg et al., 2008; Martinelli and Filoso, 2008). In sum, the evolution of both ProÁlcool and the biodiesel program demonstrate the key role of the Brazilian state in establishing and expanding its domestic biofuel market. In certain instances, this has gone hand-in-hand with industry-led initiatives, such as development of the flex-fuel car. Yet, aligned with the state’s developmentalist orientation, its role in establishing and enforcing blending targets and other goals has been central to creating a stable domestic (and export) market for biofuels to fulfill domestic policy priorities. A 2011 law further reinforced the state’s role in this sector by changing the domestic classification of ethanol from an agricultural product to a fuel under the purview of the National Petroleum Agency. With fuel prices more directly controlled by the state, such a reclassification ensures a greater involvement by the state in the domestic (and export) market for ethanol (Brazilian law: Lei 12.490/2011.).
We turn next to the EU’s attempt to create and govern an emerging global market in sustainable biofuels. These efforts have stimulated a Brazilian emphasis on the environmental sustainability of its biofuels, particularly ethanol, in a global trade context, even as it engages with and contests the transnational reach of the EU’s sustainability criteria within the WTO.