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More mobility, less carbon

More mobility, less carbon

Tuesday, 11 de July de 2017

Two programs take shape to encourage the market of biofuels and set targets for the entire automotive production chain

By Stefan Ketter, President of Fiat Chrysler Automobiles (FCA) for Latin America *

Brazil is internationally recognized as a success story for the participation of renewable resources in its energy matrix. Renewable sources account for about 40% of the national matrix, with bioenergy produced from sugar cane, which represents a remarkable 16% of the energy generated in the country, considering ethanol, thermal energy and those generated from biomass. This is a comparative advantage that Brazil has to account for in the almost two hundred nations that established at the 21st Conference of the Parties of the United Nations (COP-21) a pact that represents a huge challenge to contain global warming. It also represents the answer for Brazil to the purpose of gradually decarbonising mobility.

The agroindustrial chain of ethanol and the automobile sector accumulated over four decades a valuable experience in the use of biofuel through its national fleet. In 2016, of the almost 2 million cars and light commercials licensed in Brazil, 1.75 million left the factory equipped with flex engines, being able to use alcohol or gasoline simultaneously. This represents 85% of the marketing of new models. Also in 2016, Brazil produced about 28 billion liters of ethanol.

The environmental advantages behind these numbers are very relevant considering that, in its development cycle as a plant, sugar cane absorbs much of the CO2 that is released by the combustion of ethanol derived from it.

The assets represented by the technological accumulation achieved in the field of bioenergy should not be considered as a fulfilled mission, but rather as the springboard for a great qualitative leap that the country needs to give towards the goals with which it committed itself in the field of The COP-21. That is why the automotive and sugarcane-energy clusters are articulating efforts on an unprecedented scale, in search of higher levels of technology and management, to meet the demands for cleaner and more sustainable transportation.

Two complete programs – RenovaBio and Rota 2030 – are taking shape in an articulated and planned manner. On the one hand, there is an effort to reorder the national fuel market, with an emphasis on biofuels. On the other hand, a new automotive regime is being discussed with long-term goals for energy efficiency, vehicular safety, engineering research and development, as well as recovery and consolidation of the production chain.

The RenovaBio program seeks to organize the supply of biofuels to overcome the price and volume policy oscillations that have characterized the last years. As a practical consequence, the program should result in the expansion of domestic production of the current 28 billion liters of ethanol to an annual volume of about 50 billion liters by 2030, in addition to pricing strategies and regulatory stocks to ensure attention to demand. By establishing long-term guidelines, RenovaBio will also stimulate the adoption of new technologies with gains in efficiency in the production of biofuels and the development of new alternatives, such as second generation ethanol, biomethane, bio-kerosene or biofuel for aviation.

The predictability of supply and relative price of biofuels is an essential basis for investments in order to increase the energy efficiency of vehicles produced in Brazil. Recently, the automotive industry presented to the Brazilian authorities a structured vision of sectorial industrial policy, synthesized in a plan called “Brazil Automotive Agenda”, containing a vision on the pillars necessary for long term sustainable development, with an emphasis on energy efficiency. This agenda is an element for the joint construction of the Rota 2030 program, which will replace Inovar-Auto and establish the great parameters for the sector until 2030.

From the point of view of the automotive industry, the articulation between the two programs must begin with the revision of the specifications of automotive fuels, establishing standards for the water content in ethanol, the level of ethanol mixture in gasoline, definition of type C octane gasoline, biomethane, and other technical standards indispensable for the optimization of the use of available energy. Based on this first step, it is possible to advance technologies that increase the efficiency of engines and vehicles in the use of ethanol as fuel.

Energy efficiency gains and the increased use of biofuels have a direct and positive impact on reducing greenhouse gas (GHG) emissions, especially when assessing the cycle along the entire production chain and use of ethanol and other Biofuels – or from the field to the wheel, according to the expression we adopt to denominate the productive cycle. The convergence of public policies and private efforts in energy efficiency of vehicles and engines and in the supply of more and better biofuels can accelerate the implementation of innovative and cleaner technologies, enhancing Brazil’s comparative advantages in agroenergy and contributing decisively for the country to reach or even exceed the commitments made in the framework of the COP-21.

This is a natural technological route for Brazil, compared to other options of mobility with less carbon, considering that this is a technology that has been conquered, is commercially viable, logistically feasible and environmentally efficient. Increasing the production and participation of ethanol in the Brazilian energy matrix will allow the country to meet or even exceed the European and North American emissions legislation, which are the most rigorous in the world.

Thus, in addition to guaranteeing the safety of energy in a sustainable way, the use of large-scale agroenergy is embodied in environmental benefits, increasingly valued and demanded by consumers and society as a whole.

* Originally published in the newspaper Valor Económico on June 22, 2017

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