Stakeholder Participation in the Formulation of Brazilian Biofuel Policy (RenovaBio)

by Lira Luz Benites Lazaro and Lais Forti Thomaz (Ambiente & Sociedade/SciELO Brazil) ... In this article, we examine the establishment of the Brazilian biofuels policy (RenovaBio). We identify whether there was participation of stakeholders, and efforts of interest groups (associations, sugar refineries, and fuel distributors) to send technical notes and comments in order to have their perspectives heard and demands met, mainly regarding the definition of individual targets for reducing greenhouse gases (GHG). Government documents and stakeholder comments were consulted. For this purpose, we used the social network analysis technique. We argue that the capacity for social participation in these hearings can increase the influence of specific groups on political decisions. The results of the study show the predominant participation of trade associations and companies linked to the energy and biofuels sector. RenovaBio reaffirms the argument in favor of decarbonization, energy security, and the contribution of biofuels to reducing GHG, as motivating and legitimizing factors for their establishment.

Brazil has a long tradition of producing biofuels, mainly the production of sugarcane ethanol which has been promoted since 1931. At that time, Decree nº 19717 established the ratio of 5% ethanol in gasoline (BRASIL, 1931). In 1975, the dictatorship government launched the National Alcohol Program (Proálcool) through Decree nº 76,593, aiming to meet geopolitical and energy security objectives. The latter was a consequence of the international oil crisis and trade deficit caused by high oil prices and dependence on this foreign commodity. This boosted ethanol production given the need to increase the national trade balance and energy self-sufficiency. In 2003, the introduction of flex-fuel cars resulted in significant increases in investments in ethanol production, further consolidation of the industry which led to the formation of large companies (BENITES-LAZARO et al., 2017).

In 2004, the National Biofuels Program (PNPB) was launched, with the objective of increasing the production and use of biofuels in a sustainable manner, broadening family-based farming participation; stimulating Brazilian production from different oil plants, and also promoting the replacement of fossil diesel through a mandatory biodiesel mixture (CASTRO, 2011). The introduction of biodiesel in the Brazilian energy matrix was approved through Law 11,097 in 2005, which initially established the minimum mandatory percentage of 2% biodiesel in diesel oil sold to the final consumer. The percentage increased in the following years, reached 12% in March 2020 (ANP, 2020), and is expected to reach 15% according to Law No. 13,263 of 2016 (BRASIL, 2016).

Currently, the environmental benefits of biofuels are widely publicized among its supporters, recognizing in particular that ethanol has become, in the context of worldwide interest in renewable fuels, a way to reduce dependence on fossil fuels and greenhouse gas (GHG) emissions (BENITES-LAZARO et al., 2017). In the context of climate change, most countries understand that it is necessary to adopt ambitious policies and to substantially increase the production of low carbon energy to achieve both their climate goals and to ensure energy security in a more sustainable way (FLORINI; SOVACOOL, 2009; HUGHES; LIPSCY, 2013).

Brazil ratified the Paris Agreement in September 2016. As a result, it made a commitment to reduce GHG emissions by 37% below 2005 levels, by 2025, and by 43% in 2030 (MMA, 2015). In its Nationally Determined Contribution (NDC) submitted under the Paris Agreement, the country made two important commitments involving the energy sector: (1) reaching 45% of renewables in the energy matrix by 2030 - something that it would largely achieve by expanding the demand for renewable energy sources; and (2) increase the share of biofuels to approximately 18% by 2030 (UNFCCC, 2015). The expansion of consumption of biofuels can be achieved both by increasing ethanol production, including second generation biofuels; and by increasing the participation of the biodiesel mixture in diesel (UNFCCC, 2015).

Brazil’s commitment under the United Nations Framework Convention on Climate Change (UNFCCC) and its recognition of the importance of sugarcane ethanol to achieve these objectives were celebrated by the sugar-energy companies. The sector demanded that the government adopt long-term policies to recognize the strategic role of biofuels in the energy matrix using the argument that ethanol is a means to achieve energy security, economic development, and mitigation of GHG emissions which come mainly from the transport sector (BENITES-LAZARO et al., 2020).

At the end of 2017, the Brazilian government approved its National Biofuels Policy, the so-called RenovaBio (Law 13,576). Its main objectives are: to achieve compliance with the goals agreed under the Paris Agreement; contribute to achieving energy efficiency and reducing GHG emissions; regulate the expansion, production and use of biofuels; contribute to the predictability of the competitiveness of the various biofuels in the national fuel market; and to make the supply of energy increasingly sustainable, competitive and safe. Mainly, RenovaBio presents an innovative approach to the creation and development of the carbon credits or decarbonization market (CBios) (BRASIL, 2017).

However, the fast approval in the National Congress, just 28 days, can bring into question the effectiveness of the civil society and private sector participation. Because, according to Marcelino (2020), when analyzing the proposals presented between 1990 and 2019 in the National Congress, the estimated average time for legislative approval was 1,279 days for PECs (Proposal for Amendment to the Constitution) and 1,263 days for Bills (PLs) and Project Complementary Law (PLPs).

In this article, we examine the establishment of the biofuels policy in Brazil (RenovaBio), identifying the main interest groups involved and their efforts to have their demands met in the process of formulating this policy. The sources used are government documents, and documents by the participating stakeholders (associations, sugar refineries, and fuel distributors) presented during public consultations and hearings, mainly in the definition of individual GHG reduction targets. The social network analysis methodology was used, which consists of the analysis of the social system expressed as standards and derived from the relationship between the entities that make up this system (WASSERMAN; FAUST, 1994).

From this, we intend to evaluate if, despite having been quickly approved in Congress, RenovaBio had significant participation of non-governmental actors in the process of the formulation of the program and its regulations. To this end, the text is divided into five sections in addition to this introduction. In the second part, we present a brief overview of the governance literature, climate regimes and stakeholder participation. In the third, we describe the methodology used in this study. In the fourth and fifth sections, aspects related to the conception and history of its formulation and its approval in the Federal Congress are presented. The participation of stakeholders in the public hearings for its regulation, specially related to the targets and to RenovaBio’s goals is also analyzed. Finally, in the last section we present final remarks. READ MORE