The new government of Donald Trump, once again elected to the Presidency of the United States in this Tuesday’s election (5), will bring challenges to the energy transition and the export of Brazilian biofuels, according to experts gathered in the panel “Incentives for Biofuels”, of the third edition of the Clean Energy Seminar.
Promoted by Folha de S.Paulo, the event took place on the 6th. It was sponsored by Apex, a state agency that encourages the competitiveness of Brazilian companies, and supported by the car manufacturers BYD and Toyota and the steel company ArcelorMittal.
“The outlook becomes more challenging, because there is a clear intention for a greater closure of the American economy,” said Floriano Pesaro, director of corporate management at Apex.
Pesaro pointed to the tariff barriers promised by the elected president as obstacles. Trump said on the campaign trail that “tariff is the most beautiful word in the dictionary” and promised to increase duties by 10% to 20% on virtually all U.S. imports, including those coming from allied countries.
Brazil exported US$252 million (R$1.4 billion) in ethanol and US$70 million (R$403 million) in biodiesel to the United States in 2023, according to the Ministry of Development, Industry and Commerce. Adding the two products, the country was Brazil’s third largest buyer last year, behind South Korea and the Netherlands.
Rosana Santos, executive director of the think tank E+ Transição Energética, described climate change as a “matter of life and death” and pointed out concern about Trump’s election, as the leader opposes initiatives to decarbonize the economy.
“It’s going to be much more challenging, because we had started to see some parts of the United States helping in these international negotiations on biofuels, and I don’t know what that will look like now,” he said. “It is important that Brazil has international allies in these negotiations.”
NATIONAL ROUTE
Brazil has enormous potential for the production of biofuels, such as ethanol and biomethane, which is why the speakers emphasized the need for the country to seek a national route to reducing emissions, without trying to imitate foreign initiatives.
“Instead of natural gas, we can use biomethane, it doesn’t need to be hydrogen in all cases [como faz a Europa]”, argued Rosana Santos, from E+ Transição Energética, pointing out that the energy transition carried out in Brazil, at least in the case of steelmaking, may have its own characteristics.
Biomethane is generated from the purification of biogas, a product of the natural decomposition of garbage, manure and agricultural by-products. With similar characteristics to CNG, it can be used as fuel for vehicles.
Replacing natural gas with biomethane can reduce greenhouse gas emissions by 80%, considering all stages of the production process, which is why this biofuel has become a target for companies seeking to decarbonize their processes.
Logistics centers used to export biofuels can be integrated into the local industry, Rosana also suggested, citing the Port of Pecém, in Ceará. “That hydrogen can be used to decarbonize steel, cement and brick industries around the port,” he says.
According to Alessandro Gardemann, founder of Geo Biogás & Carbon, the Future Fuel Law, sanctioned in October by President Lula (PT), helps with decarbonization by inducing demand for biofuels in Brazil.
The law establishes that the mixture of ethanol with gasoline will range from 22% to 27%, possibly reaching 35%, and provides for annual increases in the percentage of biodiesel mixed with diesel.
“The law was clear in creating an anchor for future demand, [dando] security and predictability for investors”, stated the executive. “Everything has to happen. But we [setor privado] you have to guarantee quality and availability.”
In 2021, Brazil had 755 biogas plants in operation, an increase of 16% compared to the previous year. In the same period, production grew 10%, according to a survey by the International Center for Renewable Energy – Biogas.
Even so, the Brazilian Association of Biogas and Biomethane estimates that the potential for biogas production in the national territory is almost 40 times greater than current production – 84 billion cubic meters per year, against 2.3 billion.
The Geo Biogás & Carbon executive added that energy transition products will have to reach a competitive price for the consumer. “Society is not willing to pay for green inflation,” he says. “This thing of costing five, seven times more is not going to happen.”
