Research Project for Global Business and Stakeholder Management
October 1, 2009
University tutor: Prof. R. van Tulder
Students:
Joep van Loon (306508)
Tony Dingemanse (316155)
Bas Frijters (296962)
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Table of content
List of figures and tables ..................................................................................................................................4
Abbreviations.....................................................................................................................................................5
Executive summary ...............................................................................................................................................6
1. Diagnosis of the issue .......................................................................................................................................8
1.1 Defining the issue .......................................................................................................................................8
1.2 Types of liquid biofuel ...............................................................................................................................8
1.3 Trend analysis ............................................................................................................................................10
1.4 Brazilian ethanol production...................................................................................................................10
1.5 Sustainable bio ethanol issues .................................................................................................................10
1.5.1 Environmental issue theme .............................................................................................................11
1.5.2 Socioeconomic issue theme.............................................................................................................11
1.5.3 Food security issue theme................................................................................................................11
1.6 Methodology..............................................................................................................................................11
2. Diagnosis of the issue .....................................................................................................................................13
2.1 Primary stake holders ...............................................................................................................................13
2.2 Secondary stakeholders............................................................................................................................13
2.3 Triangle.......................................................................................................................................................14
2.3.1 Environmental issue .........................................................................................................................15
2.3.2 Social and economic issue................................................................................................................15
2.3.3 Food security issue............................................................................................................................15
2.4 Nature of tensions ....................................................................................................................................15
2.5 Issue life cycle............................................................................................................................................16
3. Design and solutions.......................................................................................................................................19
3.1 Firms as part of the solution...................................................................................................................19
3.2 State as part of the solution.....................................................................................................................20
3.2.1 Brazilian government as part of the solution................................................................................20
3.2.2 International bodies as part of the solution..................................................................................20
3.3 Civil Society as part of the solution .......................................................................................................21
3.4Partnerships between different actors as part of the solution ............................................................21
3.5 Brazilian leadership...................................................................................................................................22
4. Implementation................................................................................................................................................23
4.1 Brazilian leadership in biofuels ...............................................................................................................23
4.2 Implementation of sustainable biofuels in Brazil ................................................................................23
4.2.1 Brazilian Government ......................................................................................................................23
4.2.2 International bodies ..........................................................................................................................24
4.2.3 Market .................................................................................................................................................24
4.2.4 Civil Society........................................................................................................................................24
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5. Conclusion........................................................................................................................................................25
6. Discussion.........................................................................................................................................................26
Bibliography..........................................................................................................................................................27
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List of figures and tables
Tables
Table 1.1
Table 1.2
Table 2.1
Table 3.1
Issue themes
Journals and impact factor
Issue life cycle
Issue themes
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11
16
18
Biofuels from feedstock to end use
Energy balance of ethanol production of feedstocks
Conversion of agricultural feedstocks into liquid biofuels
The societal triangle between state, market and civil society
Tension as a trade-off
Trade-off between ethics, effectiveness and efficiency
Issue life cycle
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8
8
13
14
15
16
Figures
Figure 1.1:
Figure 1.2:
Figure 1.3:
Figure 2.1:
Figure 2.2:
Figure 2.3:
Figure 2.4:
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Abbreviations
BIOPEC
CDM
CEO
CO
EU
GHG
HC
IEA
IFPRI
ILO
MDG
NGO
NOx
PROALCOOL
R&D
RSB
SO2
UN
US$
WTO
Biomass Production, Export and Certification
Clean Development Mechanism
Chief Executive Officer
Carbon monoxide
European Union
Greenhouse gas
Hydro carbon
International Energy Agency
International Food Policy Research Institute
International Labor Organization
Millennium Development Goal
Non-Governmental Organization
Nitric oxide
The National Alcohol Program ('Programa Nacional do Álcool')
Research and Development
Roundtable on Sustainable Biofuels
Sulfur dioxide
United Nations
United States dollars
World Trade Organization
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Executive summary
This study tries to answer the research question: “How can the market, state and civil society contribute to
resolve the issue of unsustainable biofuel production in Brazil?”
To answer this question properly, the study begins with defining the issue, biofuels and the Brazilian
situation. It is explained that the focus lies on first generation biofuels for transportation and especially on
Brazil’s widely accepted ethanol. The issue is subdivided into three smaller issue themes: environmental,
socioeconomic and food security.
The second part contains the diagnosis of the issue. A distinction is made between the primary and
the secondary stakeholders and the issue is approached from three different angles. First, the three smaller
issue themes are placed in the social triangle model where the separate responsibilities for the issue themes
are defined. Second, the issue is viewed as a tension where a trade-off has to be made between the
pressure of ‘demand for biofuel’ on the one hand, and ‘sustainable production’ on the other. The same
tension is used as an input for the Triple-E model of Societal Interface Management. This model tries to
reach a situation where the regulatory gap between efficiency (demand for biofuel) and ethics (sustainable
production), which create the issue of unsustainable production of biofuel, come together in an effective
way (solution), like in our case a rewritten famous quote: ‘Sustainable biofuel that meets the fuel demands
of the present without compromising the ability of future generations to meet their own fuel demands’.
Third, the issue is positioned in the issue life cycle in the stage of ‘development’.
The third part of this dossier looks at solutions from several corners of the aforementioned societal
triangle. Firms are mainly seen as part of the solution in that they create jobs and wealth, thereby
alleviating poverty, but they can also take responsibility and work actively toward sustainable production
while making a profit. State as part of the solution is subdivided in two parts, local government and
international institutions that influence country’s policy. The Brazilian government is part of the solution
by alleviating poverty, stimulate the use of ethanol and reductions in GHG emissions and protect the
Amazon. International institutions like the UN and WTO are part of the solution by reducing poverty,
lowering trade barriers and implement sustainability criteria for internationally traded biofuels. Civil
society can be part of the solution when consumers can make informed decisions and in the form of
NGOs as ‘watchdogs’ and facilitating cooperation with governments and companies. There are some
interesting partnerships between two or more actors that are mainly focussed on promoting sustainable
biofuels and developments of new technologies like the second generation of biofuels. The last
component consists of the Brazilian leadership in this technology and issue.
The fourth chapter handles the implementations for the solutions found. Firms can contribute to
resolving the issue by implementing special management procedures that increase productivity and
decrease the pressure on natural resources. State has the availability of policy tools like incentives in the
form of subsidies, regulations, punishments and enforcements by the Brazilian government. An
international certification scheme and lowering of trade tariffs through the Doha Round of the WTO are
implementations from the international bodies.
The fifth part contains our conclusions, where we state that the most promising solutions seem to be
an international certification scheme and transparency of the supply chain to let end-consumers make
informed decisions.
After this summary we can now answer the research question as following:
The market, state and civil society can all play a part in solving unsustainable biofuel production in Brazil, although
they will not be able to solve the issue for indefinitely, since crops for biofuels of the first generation will eventually compete with
crops for food. The future is in second and third generation biofuels and we propose partnerships between the market, state
and civil society to accelerate the development of these techniques and the development of more productive crops that can be
grown on degraded land.
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The sixth part of the dossier consists of a discussion on the limitations in the research methodology
and recommendations for further research. Main limitations are that biofuel is too broad a topic to analyze
in depth and the focus on Brazil and ethanol made from sugarcane gives the limitation that it is too
narrow a topic. Further research is suggested on leadership styles of CEO’s and state leaders and their role
in the development of the first generation of biofuels. And of course we call for further research on the
second and third generation of biofuels.
We believe, just like the president of Brazil, that investments in biofuel research is key and it will be an
important part of the oil of the future. But before the second and third generation of biofuels are there,
the first generation of biofuels must be produced in a sustainable way.
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1. Diagnosis of the issue
‘Through investment in the bio ethanol industry, Brazil is determined to "plant the oil of the future". But for biofuel to play a
key role in a new carbon-free energy future, policy makers must ensure that biofuels are produced in an environmentally and
socially friendly way.’
President of Brazil Lula Da Silva (2006)
This chapter is about the issue, firstly we define the issue, after that we describe the issue more in detail
and define some issue themes. At the end we position the issue in the waves of Kondratieff.
1.1 Defining the issue
Since the increasing demand for energy, bio energy has drawn attention as part of the global energy
supply. Oil prices have reached high levels and concerns about environmental effects of fossil fuel use are
rising. With this trend it becomes more profitable to gain energy from substitutions for traditional energy
like, bio energy. The use of biofuels is a part of reducing the carbon emissions (IEA, 2007).
There is an increasing enthusiasm for biofuels such as ethanol derived from crops as sugarcane as in
Brazil, and maize as in the United States Midwest. Brazil and the United States are the largest producers of
ethanol for transport, around 90 percent of world production. In Brazil ethanol has displaced 40 percent
of gasoline use but only 3 percent in the United States (IFPRI, 2008).
Biofuels are products produced through photosynthesis. Unlike oil, biofuels have the possibility to be
produced in almost every country. It is attractive because it can slow the growth of carbon emissions
without creating much change in the energy usage (IFPRI, 2008). Biofuel has significant effects on global
agriculture, environment and on food security. This increasing demand energy from agricultural
commodities could result in higher prices for purpose grown crops. The development of biofuel promotes
the access to rural areas to support economic growth. On the other hand there is a risk that expanding
crop yields increase food prices and will affect the food security of the poorest people of the world. The
competition for land and deforestation becomes an issue when some of the crops that are cultivated for
food are used for biofuel production or when food orientated agricultural land changed for biofuel
production activities (IFPRI, 2008).
The main focus in this paper is the use of Brazilian first generation biofuel for transport. Liquid
biofuel (mostly bio ethanol is used) is interesting because it can be used as alternative source for gasoline
and diesel produced from fossil fuel. The strongest growth in recent years has been in ethanol for
transport, mostly produced using agricultural commodities as feedstock (IEA, 2007). This leads to our
research question: “How can the market, state and civil society contribute to resolve the issue of unsustainable biofuel
production in Brazil?”
1.2 Types of liquid biofuel
There are two common forms of liquid biofuel; bio ethanol (substitute for gasoline) and biodiesel
(substitute for diesel). Both can be produced of a wide range of feedstocks. Figure 1.1 shows the biofuel
process from feedstock to the end use.
Biodiesel is a substitute for diesel. Oil to make biodiesel can be extracted from almost any oilseed
crop. The European Union is the largest producer of biodiesel mainly France and Germany. Rapeseed is
the primary feedstock for biodiesel in Europe and soybean in Brazil and United States. In tropical
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countries biodiesel is made of palm, coconut, castor oils and jatropha
oils.
Biodiesel is made through a chemical reaction called
transesterification between alcohol and vegetable oil or animal fat. It
splits the oil in two parts alkyl esters and glycerine. The esters are the
fuel and the residuum glycerine is often used to make soap or beauty
products. Diesel engines can burn biodiesel without any
modifications (IFPRI, 2006).
Bio ethanol is a substitute for gasoline. Feedstocks used for the
conversion of the agricultural feedstock into ethanol are sugar crops,
starch crops and cellulosic materials. The use of water use for the
production of ethanol from cane is the main problem. Brazil and the
United States are the largest producers of ethanol for transport. The
main feedstock for ethanol is sugar cane in Brazil and maize in the
United States. Around 40 percent of the global bio ethanol comes
from sugar cane and 40 percent from other crops.
The biomass containing sugars can be simply fermented directly
to ethanol. Sugarcane is the most widely used feedstock for
producing bio ethanol and has a very favorable energy input/output
balance, see figure 1.2. Starchy crops can be first converted into
sugars before the fermentation process. Ethanol has some
complications since higher than 30 percent ethanol blends can only
be used with some engine modifications. Long distance
transportation through pipelines is not recommended because
ethanol absorbs water and rest materials in the pipelines. Thus,
ethanol is mostly moved by truck or train where it will be blended
with gasoline locally. However ethanol is the most world’s
competitive biofuel and is expected to continue to be the dominant biofuel, since the production costs
have fallen much faster than biodiesel (Abdel
Motaal, 2008).
Figure 1.1: Biofuels from feedstock to end use
Source: FAO, 2008
Figure 1.2: Energy balance of ethanol production of feedstocks
Source: Copernicus Institute, 2006
Figure 1.3 shows the range of crops which
can be used for conversion of agricultural
feedstocks into two main types of liquid biofuels.
Technological innovations in the biofuel life cycle
can also lower the costs.
The second generation biofuels can produce
liquid biofuel from lignocellulosic feedstocks such
as wood, grasses and crop residues which are less
competitive with food production. Many second
generation biofuels are under development and
not yet economic attractive.
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Algae fuel is being considered to be the third generation biofuel. Its production is low cost and high
yield, almost 30 times more energy production per Figure1.3: Conversion of agricultural feedstocks into liquid biofuels
acre as compared to the land required by other Source: FAO, 2008
conventional feedstock to produce biofuels. With the higher prices of fossil fuels there is much interest in
algae culture (Minhas, 2008).
1.3 Trend analysis
Kondratieff wave’s model characterizes cycles in the modern world economy. The cycles include
period of rapid growth, to slow growth and decline. Looking to the fuel issue it is clear that there is still a
pressure on energy, petrol chemicals and combustion engine are part of the third industrial revolution
starting. The end of a wave can be characterized with a period of crisis and chaos, this lead to uncertainty.
The oil crisis at the end of the 1970s was a trigger faster development for real substitutes for oil, like bio
ethanol. The development of biofuels technologies can be classified in the most recent wave; the
contemporary era. In this wave we can expect increasing harvest yield and improvement in biofuel
technology. The innovations as called “second and third generation biofuels” will have an important role
facing environmental and social uncertainty in the wave of fuel substitutes
1.4 Brazilian ethanol production
Brazil is one of the world's largest producer and also consumer of ethanol. Almost 80% of Brazil’s
total sugarcane production and one-third of world ethanol supply are concentrated in the Paraná River
Basin, mainly in the State of São Paulo (Copernicus Institute, 2005). Projections indicate that the area
under sugar cane production will increase further in the future in particularly São Paulo, but also other
parts of Brazil. The total land required for the enlargement of ethanol production until 2015 is estimated
at 3.5-4.0 Mha for a total production of about 35 million liters of ethanol (Copernicus Institute, 2006).
The area of sugar cane production in Brazil is projected to increase by 50 % until 2010 (Goldemberg,
Teixeira Coelho & Guardabassim, 2008).
The Brazilian production of ethanol from sugar cane is energy efficient since the crop gives high yield
per hectare and sugar is easy to extract. As the world leader in production of bio ethanol, Brazil has an
important task in promoting these renewable energies. Brazilian companies have an efficient way for
producing these energies. The challenge, in the first place for those companies, is to implement this way
of production in other ethanol rich countries, like the United States and Mexico. (IFPRI, 2006) Such an
implementation gives, firstly, a reduction of the globally greenhouse emissions and, secondly, companies
can make a profit on licenses, for instance. Besides that, companies can expand their production of
biofuels, by subsidies. These subsidies will come from the current Clean Development Mechanism.
According to the IEA, Brazil has the lowest unit cost of ethanol production in the world, at around 0.20
US$ per liter for new plants, grain based ethanol cost on average around 0.30 US$ after subsidies (FAO,
2008). Brazil has established an economically competitive national biofuel sector based mostly on sugar
cane. In 1975 the Brazilian government launched the PROALCOOL program to replace gasoline with
locally produces bio ethanol. Because of the oil crisis at the end of the 1970s the interest in bio ethanol
declined. The program focused on better co-operation between Brazilian government, farmers, ethanol
producers and car manufactures.
1.5 Sustainable bio ethanol issues
Issues exist particularly as a result of expectation gaps. Expectation gaps are created when
stakeholders hold different view on what acceptable corporate conduct is (Van Tulder, 2006). Involved
primary and secondary stakeholders are identified in the chapter 3. The relation of bio ethanol and
sustainable development is a complex and worldwide issue. Positively bio ethanol improves energy supply,
economic profits, rural development, and energy efficiency and can reduce greenhouse gases emissions.
On the other hand, the increasing production of energy crops result in expanding agricultural areas,
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deforestation, desertification, water pollution, poor labor conditions and food security problems. The
positive impacts and trade-offs vary with the type of crops, conversion technology and country
circumstances. There is a need to produce bio ethanol is a sustainable manner. We have made a distinction
between environmental issue theme, socioeconomic issue theme and food security issue theme.
1.5.1 Environmental issue theme
One of the main advantages with biofuels is worldwide reduction of greenhouse gasses and the
potential to help mitigate climate change. The growing feedstock absorb carbon gasses, the emission of
carbon gasses during combustion does not contribute to new carbon emissions since the emissions are
already part of the carbon cycle. As stated before, the environmental benefits will depends on the type of
feedstock, conversion technology and the usefulness of the co-product.
Another concern linked with the increasing bio ethanol production is the competition for land
between agriculture, forest and urban purposes. The main source of greenhouse gases emissions in Brazil
is deforestation caused by the expansion of agricultural activities, mainly in the Amazon region. The
sugarcane production has been linked with clearing of unique and regions in the world with a high
biodiversity (FAO, 2008). The amount of water use for the production of ethanol from sugarcane is
another issue.
1.5.2 Socioeconomic issue theme
The growing demand for biofuels and the future energy demand will lead to economical benefits
rising from the increasing feedstocks production. These feedstocks need to be produced, harvested,
transported, converted into biofuels, and transported for final use. Higher world prices for fuels will be
positive for farmers in developing countries because they can benefit from the higher prices for the own
production. Negative to this development is the fact higher prices for food affect the poor people.
1.5.3 Food security issue theme
There is some concern that the increasing production of biofuels will lead to food security problems,
especially in the poorest countries. Some of the purpose grown energy crops like sugarcane and maize
compete directly with food crops for irrigation water, most of the crops are optimized for growth and use
more water than natural fauna and food crops.
Table 1.1: Issue themes
Summarized:
Environmental issue theme
Socioeconomic issue theme
Food security issue theme
Air quality, greenhouse gases
Water availability
Deforestation and desertification
Land usage competition
Increasing crops production
Job creation and higher incomes
Increasing prices of crops
Access to rural areas
Increasing prices of crops for food
Food availability
Fresh water availability
1.6 Methodology
This research is conducted as a desk research (Van Tulder, 2007), meaning it is based on previous
research done by other researchers. To control for the reliability of the sources used, our research is
mainly based on scientific journals which can be credited with several reliability principles like ‘peerreview’, ‘editorial committee/board’ and ‘committee/board of recommendation’, as well as some
recommended books - by our professors.
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To get familiarized with the topic we started reading the issue dossier on the ib-sm.org website (issue
#15), the issue dossier on blackboard (biofuel-a fuel for debate) and some online news websites. Then we
defined keywords, of which the most important were: biofuel(s), agriculture, brazil and trade-off. Several
combinations, like: ‘biofuel* AND Brazil AND agriculture’ were tried in two databases, namely
ABI/INFORM and ISI Web Of Knowledge. Subsequently, articles were selected on the basis of journals
with a high Impact Factor and relevance to the issue at hand.
To ensure that the journals used were indeed scientific journals the Impact Factor of several journals
was found in ‘ISI journal citation Reports’ and most of the other sources used were policy papers from
respected institutes like Harvard International Review, Goldman Sachs: Global Papers, IEA, IFPRI,
OECD and the UN’s FAO.
Table 1.2: Journals and impact factor
Journal
SCIENCE
BIOFUELS, BIOPRODUCTS & BIOREFINING
WORLD BANK ECONOMIC REVIEW
ENERGY POLICY
Impact
Factor (2008)
28.103
2.909
1.810
1.755
We used the reflective cycle, recommended by Van Tulder (2007) to build the dossier more structured
and to make sure that we would approach the issue from description and move to prescription instead of
the other way around or shortcutting the cycle. This issue dossier begins with a problem or issue and
defines it (chapter 1). Secondly, primary and secondary stakeholders are identified and the issue is
extensively diagnosed using techniques as the issue life-cycle and the triangle (Van Tulder, 2006) (chapter
2). The third chapter presents several solutions from the actors of the market, state and civil society and
partnerships between them, to the issue at hand. Subsequently, the implementation of these solutions is
discussed (chapter 4), followed by a conclusion of the most promising solutions to the issue and an
evaluation of the already existing initiatives (chapter 5). Lastly, limitations of the conducted research and
future research possibilities are discussed (chapter 6).
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2. Diagnosis of the issue
This chapter handles the diagnosis of our issue. Firstly we identify the primary and secondary
stakeholders. After that we will argue who is to blame for this issue. Followed by a discussion on the
nature of tensions. Lastly we discuss the issue life cycle with some different dimensions.
2.1 Primary stake holders
For describing the stakeholders we have argued from the perspectives of the biofuel industry in
Brazil.
The primary stakeholders are directly involved by the organization. Therefore we defined, in
according to the International Business and society literature, three groups. Those groups are the
consumers, the labor market and the government.
Consumers:
- The people in Brazil, especially, the people in the rural areas are directly involved. Big
companies start plants in that areas by which the small farmers could sell their fields, or to
cultivate crops for biofuels, instead of the production for sugar. And of course the price and
availability of ethanol directly involve the consumers in the issue of sustainable biofuel
production.
Labor market
- The biofuel industry has some positive effects on the labor market of Brazil. Firstly, the
biofuel industry offers employment to more than six million jobs (ILO, 2008). Secondly, the
large share of Brazil in the biofuel market leads to an exponential growth of highly educated
workers. This rise has brought positive effects to the public as well the private sector (Han,
2007)
Government:
- The biofuel industry is supported by the government. In the National plan on climate change,
which was written in 2008, the government set some main actions. Namely to encourage the
biofuel industry for achieving an average annual consumption with a rise of 11 percent in the
coming ten years. This ethanol must be produced from special crop fields that are defined in
the so-called Sugarcane zoning Program. Next to that the government also stimulates an
international ethanol market by cooperation with other countries that also have potential for
developing and growing sugarcane (Government of Brazil, 2008). Beside this, since 2005 the
government is promoting the use of B2 biodiesel, which is a mix of sugarcane ethanol and
vegetable oil. Since 2008 this mix became mandatory. The result is that B2 biodiesel consists
of a mix of 2 – 3 percent ethanol and for the rest diesel (IEA, 2008).
2.2 Secondary stakeholders
In contrast to the primary stakeholders, the secondary stakeholders are groups or individuals that do
not have a direct influence on the economic activities of the organization, but they are indirectly
influenced or will indirect influence the organization (Van Tulder with Van der Zwart, 2006). In this case
the following groups are identified as secondary stakeholders; future generations, natural environment,
foreign developing countries, international institutions and substitutive technologies.
Future generations
- The current biofuel industry will have a significant effect on the future generations. As
mentioned above, biofuels are used as a substitute for fossil fuels. As a result of the depletion
of fossil fuels, biofuels are necessary for the future energy consumption. On the other hand,
an excessive production of biofuels can affect the environment, as described in the next
point.
]
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Natural environment
- The environment will be influenced indirectly. The reason for that is the change of the land
use. For cultivating sugarcane, the companies need very large areas for replying on the
demand of the customers. Because of this Rihelato and Spracklen (2007) identify a pressure
on natural forests and grasslands. Even environmentalists have argued that the current
growth of the biofuels industry has a negative effect on the forest in Brazil, because the rate
of deforestation is still increasing (Han, 2008).
Foreign developing countries
- Because of the leading position of Brazil in processing sugarcane into bio fuels, other
countries are indirectly involved. Brazil creates a new paradigm of cooperation by starting
research and development ventures between countries in South America and sub-Saharan
Africa. For example, Petrobas, the national oil company of Brazil, has agreed to create a
biofuel plant in Nigeria. In this way, Brazil shares the knowledge and the experience to other
developing countries, through which they can deal with their lack of energy security (Han,
2008; Walker & King, 2008).
International institutions
- There are several international institutions that have programs that deal with biofuels. The
United Nations have the UN-energy. This is an interagency mechanism which is related to the
energy. Their aim is to help countries, especially the developing countries for achieving the
Millennium Development Goals. In this case to create a sustainable environment.
Furthermore the International Energy Agency is an intergovernmental organization who gives
advice to their members with regard to energy policy. At the moment Brazil is not a member,
but this institution is still a stakeholder because they promote alternative energy sources like
biofuel in which Brazil has a leading position. Next to these institutions, we also have the
Global Bio-energy Partnership and the Food and Agricultural Organization of the United
Nations (Van Tulder, 2008).
Substitutive technologies
- There is a global competition on technologies for creating a sustainable fuel for the transport
sector. At the moment the biofuel industry from Brazil has a leading position. But there are
some other upcoming technologies, like cars driving on electricity or hydrogen. When these
technologies become equally or even more efficient and effective than biofuel from
sugarcane, it would influence the demand of Brazilian biofuel.
2.3 Triangle
The social triangle model is used to identify the most important nature of this issue, whether it is
more related to the government, the market or the civil society, or a combination from two or more areas.
By using this model we also establish
which part of the triangle is to blame for
the issues.
In this report we divided the issue
sustainable production of biofuel in three issue
themes. We position each of these issue
themes in the triangle and explain the
reason of that position. (Figure 2.1).
Figure 2.1: The societal triangle between state, market and civil society
Source: Van Tulder with Van der Zwart, 2006
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2.3.1 Environmental issue
As we have mentioned above, the natural environment is damaging by the production of biofuels.
The International Labor Organization writes in a case study ‘that ethanol-driven agricultural expansion
will accelerate deforestation in the Brazilian Amazon, increase soil erosion, damage river ecosystems from
excessive water use for irrigation, and reduce access to land for rural farmers’. (ILO, 2008). It is general
assumption that the global deforestation is caused by the market as well by the consumers and the state.
However in this case the market of the biofuel industry is to blame, because they damage the natural
environment. That means that the market is primary responsible.
2.3.2 Social and economic issue
The production of biofuels, especially the traditional biofuels like ethanol from sugarcane, has several
negative impacts on the social and economical area. Firstly women and children are affected by the
pollution of the biofuel industry, which can have some health consequences like respiratory illness and
premature death. Secondly, the production of ethanol puts an immense pressure on local natural
resources. That results in a (negative) pressure when they must satisfy the demand for energy services.
(IFPRI, 2006). Behind that some labor and human organizations declare that there is some talk of slavery
in the ethanol sector (BBC, 2007). This issue theme is identified as an interface issue between the state and
the market. The state is to blame because they have not made a law for protecting the women and
children that are affected by the not sustainable production of bio fuels, especially when organizations talk
about slavery, the state has to take measures. At the other hand the market or the companies have to take
their responsibility for a clean working environment for their employees.
2.3.3 Food security issue
As s result of the increasing demand of biofuel, more and more sugarcane (and other crops) are used
for the production of biofuel. At the other hand the world population is growing, even the demand of
food. So there is a trade-off between food and fuel. In according to Sachs (2008) we have a direct
competition between the ethanol with food crops. One of the results is the increasing food prices for
these crops, in this case the sugarcane, for example the percentage of the world price for sugarcane is
changed from 26 percent in 2010 till 66 percent in 2020 – both of the percentages are compared with the
base line (IFPRI, 2006). This issue theme is defined as an interface issue between the market, the state and
the civil society. We established because ‘it is seldom clear which actor should take primary responsibility
for addressing an issue, the focal point of disputes between NGOs government and firms is often on the
question of who has (or might have) the ‘moral authority’ in a particular issue’ (Van Tulder with Van der
Zwart, 2006). The market is a part of the problem, as the companies use agricultural products for
manufacturing biofuels, whatever the food prices rising rapidly (Han, 2008). The state might be a part of
the problem, because they do not have any regulations on that problem, but at this moment they still
supporting the production of bio fuels from ethanol. Lastly the civil society can be blamed, for the reason
they make use of the bio fuel.
2.4 Nature of tensions
We identify the issue of a sustainable versus the biofuel as a tension. This tension is shown in a graph
(Figure 2.2) On the horizontal axis we defined the demand of
biofuel. On the vertical axis we set the sustainable production.
In the previous paragraphs we have argued that an
increasing demand of fuel, leads to unsustainable effects for the
environment, food and economic and social life circumstances.
At the other hand we need an alternative for the fossil fuels.
The result is at trade-off between those two aspects, that
trade-off is shown by the line in the graph. The higher the
demand of biofuels, the more production of biofuel is needed.
The more production of biofuel, the more unsustainable
production in relation to the environmental, food security and
economic and social issues. The other way around, we establish
Figure 2.2: Tension as a trade-off
Source: Van Tulder, 2009a
15
that a more sustainable production, will lead to a lower demand of biofuels. The lower demand will be
caused through the increasing prices of the biofuel.
On the base of the defined trade-off we have indicated a conflict in the trade-off between efficiency
and equity or ethics. To solve that conflict we make use of the Triple-E of Societal Interface Management.
The ultimate goal of that model is to reach a situation where both the environment, the food balance and
the social and economic issues benefit from the production of biofuel (Van Tulder with Van der Zwart,
2006).
Figure 2.3: Trade-off between ethics, effectiveness and efficiency
Source: Van Tulder, 2009b
In the Triple E (Figure 2.3) we defined the need of biofuel as efficiency. That fuel is necessary as an
alternative for the fossil fuels. To compete with the fossil fuels the companies focus on a low cost
production. At the other hand the ethics or equity are defined as a sustainable production. The future
generations need those two aspects to stay alive on this planet. That results in a conflict between those
two extremes. The current production of the bio fuels is not sustainable enough for the future, therefore
we need the effectiveness. The effectiveness is defined as a sustainable biofuel that meets the fuel demands of the
present without compromising the ability of future generations to meet their own fuel demands. Such a sustainable biofuel
can be the second or third generation biofuels. These technologies are currently in development,
nevertheless when these technologies has a more improved reduction on the CO2 pollution, it would be
the solution for the conflict between the need of biofuel and a sustainable production.
2.5 Issue life cycle
Like a product or a technology has a product life cycle, in that way there also is a life cycle for issues.
This issue life cycle shows the different stages that an issue is going on. Each of these stages, the birth,
growth, development and maturity are divided in three different perspectives, namely the company or the
sector, NGO and the government (Van Tulder with Van Zwart, 2006). The issue sustainable production of
biofuel is at this moment in the stage of development. We have indicated the issue in the first three stages
out of the three perspectives, Company or sector, NGO and government (figure 2.4). The colored parts of
the table indicate an intensified action or initiative from a specific perspective on that stage.
16
Figure 2.4: Issue life cycle
Source: Van Tulder, 2009c
17
Table 2.1 Issue life cycle
Company/sector
NGO
Government
Birth
Companies
only focus on
the
production of
biofuel and
further
development
of
technologies
NGO’s are
monitoring
problems
such as the
increasing
deforestation.
They try to
set it on the
agenda of the
government
and
other
organizations,
like IEA and
ILO.
No
special laws
for
the
production of
biofuels. The
government
is supporting
this industry,
and is sill
inactive
concerning
the notes of
the NGO’s.
Growth
Companies
deny
every
allegation that
the
production of
bio fuels is
not
sustainable.
Among other
things
the
rising food
prices and the
increasing
deforestation.
Development
Accept
that
there are some
aspects of the
production are
not sustainable
at all. Some
companies start
with
researching for
innovative
alternatives.
For
example they
start
researching for
the
second
generation
biofuel.
International International
organizations organizations
keep it on the hold it on the
agenda and agenda.
The
start
publish reports
researching.
about
the
consequences
and start with
promoting
sustainable
alternatives.
Still
supporting
the industry
and deny the
impact on the
environment
as a primary
responsibility.
Maturity
Not
applicable
Post-Maturity
Not applicable
Not
applicable
Not applicable
Not
The
applicable
government
becomes a bit
aware of the
consequences
but does not
fully agree with
the allegations
of the NGO’s
that
deforestation is
caused by the
ethanol
production.
But they start a
crack-down on
illegal
deforestation.
Not
applicable
18
3. Design and solutions
This chapter gives an overview of the solution. Therefore we made a difference between the firms,
the stat and the civil society, whereas the state is divided in two parts, the Brazilian government and
several international institutions.
The issue themes and the effects are repeated to give an overview of the solutions that are looked for
in Brazil:
Table 3.1 Issue themes
Summarized:
Environmental issues
Socioeconomic issues
Food security issues
Air quality, greenhouse gases
Water availability
Deforestation and desertification
Land usage competition
Increasing crops production
Job creation and higher incomes
Increasing prices of crops
Access to rural areas
Increasing prices of crops for food
Food availability
Fresh water availability
3.1 Firms as part of the solution
1. The reputation of a firm is very fragile and easily damaged. Loss of trust and credibility might “put
the ‘license to operate’ at risk and jeopardize the continuity of the organization.” (Van Tulder, 2007: 213).
Since reputation is considered as an important asset and strategic resource, it is in the best interest of
companies to protect and strengthen their reputation. Chain responsibility is increasingly called for by
critical NGOs, which means that companies are responsible for the working conditions and
environmental impacts of the production of biofuel. So biofuel producers and (especially) retailers could
be part of the solution to socioeconomic and environmental issues if they increased traceability and transparency
of their supply chains to the end-user.
2. Poverty offers room for bribery and corruption, and might force people into unsustainable
behaviour, which might lead to deforestation, pollution and environmental degradation.
Companies’ main contribution to the solution for unsustainable biofuel production is their ability to
provide work, divert money that was meant for imported fossil fuels to locally produced biofuel (thereby
stimulating the local economy) and generate income through exports of biofuel (Van Tulder, 2008). This
leads to poverty alleviation and therefore to a reduction in unsustainable behaviour and can be seen as
part of the solution to socioeconomic and environmental issues.
3. Since most of the Amazon is not suitable for agricultural reasons (Goldemberg et al., 2008), biofuel
producing companies should be more cautious and do more research before choosing new sites to
cultivate sugarcane. Therefore, businesses could be part of the solution to the environmental issue of
deforestation.
4. Firms should also use the correct kind and amounts of fertilization, prevent soil erosion and
nutrient depletion and implement the right kind of irrigation (Goldemberg et al., 2008). This decreases the
need for land use change and increases productivity and sustainability of the cultivated lands. This is part
of the solution to environmental issues like water availability, land use competition and deforestation, as
well as part of the solution to the food security issue of fresh water availability.
19
5. Vehicles that run on ethanol emit less GHGs and also allow for a substantial reduction of the main
local air pollutants, like CO, HC, NOx and SO2 (OECD, 2002). Car producing companies and companies
that offer biofuels should increase the amount of flex-fuel vehicles and appropriate infrastructure for
distribution of ethanol (Abdel Motaal, 2008), thereby they can be part of the solution for the environmental
issue of GHGs.
6. Firms biggest contribution to solve the socioeconomic issues is by doing good business. Brazilian
workers in the sugarcane industry are getting more skilful and receive higher wages than comparable jobs
in Brazil. Also, the biofuel industry generates more jobs for a much lower prior investment per job
compared with other (comparable) industries. “The creation of one job in the ethanol agro industry
requires on average US$ 11,000, while a job in the chemical and petrochemical industry costs 20 times
more. Also, the rate of jobs per unit of energy produced is 152 times higher in the ethanol industry than in
the oil industry.” (Goldemberg et al., 2008: 2094). As a result, the biofuel industry proves that their
industry is part of the solution to socioeconomic issues as job creation and higher incomes.
3.2 State as part of the solution
In this part we make a distinction between the solutions from the government of Brazil and
international organizations with influence on local policies, like the UN and (especially) the WTO.
3.2.1 Brazilian government as part of the solution
1. Just as firms can be part of the solution to all issue themes of unsustainable biofuel production, so can the
government by trying to alleviate poverty (Van Tulder, 2008) in the country through a combination of
policy measures to stimulate (sustainable) economic development (Sachs, 2008).
2. Governments are also part of the solution to the general issue of sustainability of biofuel production
by regulations, laws and enforcement and monitoring of compliance.
3. The government can stimulate a reduction of GHG emissions from biofuels. If the requirements
for GHG emissions are lowered year after year, this can stimulate innovation to improve techniques and
reduced GHG emissions will follow (Van Tulder, 2008). This can be a part of the solution for environmental
issues and food security issues, because a higher output of biofuel per acreage of sugarcane will lead to less
pressure on land use change. Which will lead to less deforestation and lower pressure on food prices. And,
of course, the environmental issue of GHG will be handled with this solution.
4. The Brazilian government is already taking steps to expand the range of protected areas to prevent
illegal logging in the Amazon. Over 40 percent of the Brazilian Amazon is already under some form of
protection (Walker & King, 2008). This, and even an increase in protected areas, could be part of the
solution to the environmental issue of deforestation.
5. The ALCOOL program of the Brazilian government in the 1970s was immensely successful and
resulted in mass production of ethanol-based fuel and world leadership in this area. It has become a strong
stimulant for both the modernization of agriculture and the promotion of research and development
(Han, 2008). Hence this kind of government action can provide a solution for the socioeconomic issues
surrounding the production of biofuel, like job creation and higher incomes.
3.2.2 International bodies as part of the solution
1. Just as firms and local government can contribute to the alleviation of poverty, so can international
institutions like the UN and their efforts to reach the MDGs, of which the first goal is to eradicate
extreme poverty & hunger (Sachs, 2008). International cooperation on poverty alleviation might be a
solution to unsustainable production of biofuels in Brazil and elsewhere in the world.
2. Sustainability criteria by international institutions or large developed economies are another possible
solution to the general issue of unsustainable production of biofuels. The EU for example, who has
obligated its members to mix-in 5.75% biofuels by 2010, is discussing sustainability criteria for biofuels in
20
its Parliament (Van Tulder, 2008; Walker & King, 2008). If this is implemented, producers of biofuels
must comply with these criteria before their biofuel can be exported, leading to increased sustainability of
production in Brazil.
3. The argument above is related to international trade. Goldemberg et al. believe that “trade in
biofuels will contribute to rural development, allow for additional income and job creation, contribute to
the sustainability of natural resources, collaborate with GHGs emission reduction in a cost-effective way
and diversify the world’s fuel need.” (2008: 2096) Abdel Motaal (2008) agrees with this statement and adds
that fewer trade barriers would lead to more efficient allocation of biofuel production worldwide, so to
areas where both land and water are most abundant, and competition with food is the least severe. Thus,
increased trade through fewer trade barriers would be a part of the solution to all issue themes related to
unsustainable production of biofuels.
4. Other institutions that can influence this issue are the current Kyoto Protocol and its future
successor (ends in 2012). Under the Kyoto Protocol industrialized countries can pay Brazil to reforest land
to balance their own excess emissions, but stopping deforestation is not included in this so-called Clean
Development Mechanism, through which developed countries can reduce their emissions by sponsoring
projects in developing countries. (Walker & King, 2008) If future Protocols would include forest
protection, or even sustainable biofuel production, as projects of the CDM, this could prove to be a
solution to deforestation as an environmental issue and increase the sustainability of biofuel production in general.
3.3 Civil Society as part of the solution
1. Civil society can be part of the solution to the issue of unsustainable biofuel production by
promoting chain responsibility by companies, which is increasingly called for by critical NGOs (van
Tulder, 2007). If they are successful chain responsibility is a solution to socioeconomic and environmental issues
if they increase traceability and transparency of their supply chains to the end-user.
2. Another function that NGOs can perform is to act as a watchdog and cooperate with governments
and companies to develop a sustainable approach to producing and processing biofuels (van Tulder,
2008). This could be part of the solution to the general issue of unsustainable biofuel production, since companies
that do not produce in a sustainable manner will be identified, contacted and could risk major reputation
damage.
3. NGOs could also be part of the solution by making a very clear distinction between the different
kinds of biofuel and their origin, before they publicly advocate that biofuels are bad’ and thereby change
public perceptions in a negative way (Friends of the Earth, 2007). This could lead to an increased demand
for ‘good’ biofuels and therefore to an increased production of ethanol in Brazil, with the resulting
positive impacts on the socioeconomic issues.
4. According to Walker and King (2008) Brazil has excellent climate scientists, to whom the present
government really listens. This part of civil society, like scientists, universities and research centres can be
a valuable influence and part of the solution to all of the issues surrounding the sustainable production of
biofuels.
5. The last, and rather important solution to unsustainable production is the power of the consumer.
This power is only useful when consumers receive reliable information from companies, other civil society
actors like NGOs, and the government. But if this information is given, the consumer can make the
choice to support the more sustainable producers by buying their biofuels, giving way to a pressure on
companies to produce more sustainable in order to sell their products.
3.4Partnerships between different actors as part of the solution
21
1. Several multi-stakeholder initiatives already exist to promote and ensure sustainable use of biofuels
such as the RSB and the BIOPEC initiative (Van Tulder, 2008). These kind of initiatives can be part of the
solution to all issues, since they promote the sustainable use of biomass and try to communicate and
promote this to the public.
2. Another important partnership that can prove to be part of the solution is innovation in all of its
forms, though often a result of partnerships. Companies that are helped by government supported
biotechnology incubators (Quezada, 2006) or universities together with privately funded research institutes
or companies could improve current technologies and develop the second generation (or even third
generation) bio-energy crops and technologies to process these into liquid biofuels. Thus, innovation can
play a huge part in the solution to sustainable biofuel production, especially with the environmental issues and
the food security issues, since the harvest needed for biofuels would not compete directly with food anymore.
3. Another part of the innovation argument above would include genetic improvements of crops that
allow cultures to be more resistant, more productive and better adapted to different conditions. Such
improvements already allowed the growth of sugarcane production without excessive land-use expansion
in the past (Goldemberg et al., 2008), and could do more in the future. According to Quezada (2006)
Brazil and other Latin American countries are increasingly attractive for a rapidly growing biotechnologysector where R&D in crop improvement is one of the main focuses. This would provide the same
solutions to food security issues and environmental issues as solution 2.
3.5 Brazilian leadership
Brazilian leadership started very early since the Brazilian government already launched their
PROALCOOL programme in 1975 and it remains to date the largest commercial application of biomass
for energy production and use in the world. It succeeded in demonstrating the technical feasibility of
large-scale ethanol production from sugar cane and its use to fuel car engines (Lébre La Rovere, 2002).
The Brazilian government further stimulated and supported the production of biofuel by biotechnology
incubators and partnerships with the market to invest in agricultural biotechnology. Through these
initiatives Brazil became the leader in the production of bio-ethanol and bio-fuel usage (Quezada, 2006)
and might hold this position for some while. Another point on which Brazil shows its leadership in the
production of ethanol is in the case of South-South technology exchange (Han, 2008). This means that
Brazil is now sharing its expertise with countries in Sub-Saharan Africa, to enable them to revive their
declining sugarcane industry and put it to biofuels use (Walker & King, 2008). As mentioned before,
Brazil hereby creates a new paradigm of cooperation by starting research and development ventures
between countries in South America and sub-Saharan Africa. So it seems that leadership in this was
initiated by the government and to date still supported and further stimulated by the state.
22
4. Implementation
In this chapter is a short discussion about the implementations of the solutions of chapter three. The
implementations are examples of the successful Brazilian ethanol industry and explain their worldwide
leadership. The implementations are part of the sustainable ethanol production of Brazil and linked to the
three primary institutions in the triangle; state, market and civil society. To implement these solutions
partnerships between the institutions can reduce their failures. Partnerships can tackle three forms of
failure that have been attached to unilateral action by government, firms or civil society in addressing the
development challenge (OECD, 2006; Van Tulder 2006).
4.1 Brazilian leadership in biofuels
Last decades there is an increasing demand for biofuels, not only from industrialized western
countries but also from new economies, like the BRIC countries. How can we deal with the growing
pressure on the global energy supply? There are real opportunities to use plants as growing part of our
global energy needs; the overall challenge is to create sustainable renewable fuels. There are concerns
regarding the sustainability of biofuel because of the side effects ethanol based fuels can bring.
Brazil is the world’s largest producer of liquid biofuel and leader in the area of cheap and efficient
production of ethanol. Brazil’s approach of using agricultural products for manufacturing fuels has lead to
rapidly increased food prices and environmentalist argue that biofuel production has increased the rate of
deforestation (Han, 2008). Brazil’s leadership in the ethanol industry has brought positive development to
other countries in Latin America and Africa. Brazil spreads its experience with the ethanol industry also
helping sub-Saharan Africa deal with the lack of energy security. Sustainable biofuel production and usage
will include minimizing negative environmental impact, reducing GHGs emissions from production,
transport and use, minimizing negative social impact of, and minimizing negative economic impacts. A
“sustainable corporate story” involves both strategic and operational choices (Van Tulder 2006). There are
several reasons for the success of ethanol in Brazil.
4.2 Implementation of sustainable biofuels in Brazil
We divide the implantation of sustainable biofuels in Brazil in three main parts, the government, the
market and the civil society.
4.2.1 Brazilian Government
The role of the Brazilian government with the implementation of ethanol in the supply chain was part
of the success. This includes making technical standards, supporting the technologies for using and
producing ethanol, providing financial incentives and ensuring appropriate market conditions. With the
introduction of Flex-fuel cars in 2003 the Brazilian internal consumption of ethanol has increased
significantly. Flex-fuel cars are designed to run in gasoline or a blend of ethanol. In 2006 75 percent of all
new cars manufactured in Brazil were flex-fuel (IFPRI, 2006).
In 1997 Brazil legalized independent power producers to sell electricity to the grid. Around 600 MW
of installed power from sugar mills were delivered to the grid in 2005 (IFPRI, 2006). Also the usable
energy from the sugarcanes residues can be delivered to the national grid.
Tax incentives were made for the production of raw materials for biodiesel small family farms in the
north and northeast regions of Brazil. In the so called “Social Fuel Seal” program, ethanol producers in
poor regions pay less federal tax income and can access finance from the Brazilian National Bank. The
farmers create cooperation’s and get training for their workers (FAO, 2008).
These kind of regulations and incentives form the heart of government’s actions to implement.
23
4.2.2 International bodies
Concrete implementations from international bodies can be to reduce countries ethanol and biodiesel
tariffs through the WTO. The Doha Round of trade negotiations is considering reducing tariffs on
biofuels (Abdel Motaal, 2008). Other negotiations in the Doha Round are whether to call biofuels
‘environmental goods’ or not. If accepted, this will even further lower the tariffs on biofuels and probably
increase trade. Another part of the negotiations is agricultural subsidies and various proposals to reduce
agricultural subsidies are negotiated.
The most promising implementation might be a certification scheme for biofuels, which is discussed
in the WTO as well as in the EU. Only the question is whether this will really be implemented due to
possible conflicts with current WTO rules of unfair trade restrictions (Abdel Motaal, 2008; Van Tulder,
2008).
4.2.3 Market
Geographically was the sugarcane industry already developed in Brazil and there is a lot of agricultural
land available with a good climate for growing sugarcane. The expansion of internal en external markets in
Brazil took interest of investors and new sugar mills were build. Old refineries were recovered and became
more productive. Now almost all sugar mills in Brazil can produce both sugar and ethanol, when prices of
sugar are lowering it will be profitable to shift ethanol production. The support of private ownership of
sugar mills helps for more efficient production in the sugar industry and the number of sugar yield has
risen. Firms can prevent soil erosion and reduce nutrient depletion through special management
procedures related to erosion, avoiding plantations on marginal or vulnerable soils, or with high declivity,
monitoring soil quality and nutrient balance. Private ownership and better management procedures can be
implemented and the cost of producing ethanol declined by an average of 5.7 percent from 1985 to 2005
(Goldemberg et al., 2008). These kind of implementations might result in even greater cost reductions in
the future.
4.2.4 Civil Society
Increasing rural activities for biomass energy have a positive effect on the employment in these areas
and the energy supply. Sugarcane production creates jobs in these rural areas, most of them for unskilled
workers. Increased bio energy production will stimulate the agricultural sector, already a key motor for
economic growth. Negative for the civil society is the rising food prices when competition with biofuels
and food increases. The Food and Agriculture Organization of the United Nations (FAO, 2008)
identified key factors for the increasing food prices:
− Biofuel production, there is an uncertainty for the future demand for agricultural as biofuel
feedstock.
− Petroleum prices
− Income growth,
− Yield shock and yield trends
− Trade policy responses.
Higher prices for food will affect the poor people the most but this impact might solve itself in longterm by the higher incomes generated by the agriculture growth (IFPRI, 2006). The stimulating
agricultural sector can lead to deforestation and soil erosion. Deforestation is hard to link to biofuels and
different researches have different outcomes. The illegal deforestation is hard to illustrate and measure in
Brazil. The Brazilian minister of environment pointed out that 13 ministries, state authorities, the Federal
Police, Ibama agents and Army troops all work together in implementing the plan and controlling
deforestation in the region as part of the sustainable forestry plans.
24
5. Conclusion
It is hard to argue that the initiatives are sufficient since a lot is going on at the same time and there
seems no perfect ‘one-size-fits-all’ solution to the problem of unsustainable biofuel production. The
implementations are far from perfect, considering for example the Doha Round, which already started in
2001 and is taking very long to negotiate a large number of issues. The Brazilian government’s
implementations seem to work more efficient and faster and considering the success of ethanol in Brazil
these initiatives seem to work out. Firms could do more about the situation and more transparency in
their supply chain and end-user awareness seem the key to handing more power over to the consumers as
actors of civil society. The most promising solutions seem to be the certification schemes proposed by
international bodies and transparency of the supply chain to make end-users more aware.
According to us it remains a fact that the first generation biofuels need crops that compete with food
crops, since there is only a limited amount of land available, while population growth fuels energy needs
and demand for food. Therefore the initiatives that focus on making the first generation biofuels more
sustainable will only get us so far. The real solution seems to lie in the second and third generation of
biofuels, though uncertainty about their economic viability and technological breakthroughs remain. We
therefore believe that research is needed especially in the areas of new generations of biofuels and new
energy crops like trees and grasses that can be grown on degraded land, for example jatropha can slow
down desertification (FAO, 2008).
25
6. Discussion
The analyses of the issue a sustainable production of biofuel is a very broad topic. That means that
there were some limitations in this research. Because of the lack of time, we have not analyzed all the
possible journals and reports. Given that there is a variety of sources this dossier has a limited level of
depth in analyzing the issue. Another limitation is our focus, we focus on the biofuel, made by sugarcane,
in Brazil, because that is the most important biofuel in that country. As a result of that we did not focus
on the crops like soya and corn.
Another necessary is a research on how to convince the market and the state leaders. In according to
that it might be good to have more research on the effects of the biofuel industry on the food security and
environmental issues. Nowadays, the arguments are still not bright, they need more underpinned statistics
and arguments to establish the relations between the industry and the food security and environment.
Furthermore, further research should include a research for a sustainable way of production with low
costs, currently there is some research on the second and third generation biofuels, which does not make
use of food crops, but other natural materials
Finally, it might be interesting to research the leadership styles of the CEO’s and state leaders which
have token an important role in the development of the first generation biofuels in the past. Maybe that
style of leadership can be used to promote and implement a more sustainable production in the sector of
the biofuel industry.
26
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