Episode 9 of our Energy Talks podcast is a conversation on road transport decarbonization policies, especially the case of Brazil, with Daniel Amaral, the Director of Economic and Regulatory Affairs at ABIOVE, the Brazilian Association of Vegetable Oil Industries.

The interview, carried out by SGS INSPIRE Business Development Manager, Claire Couet, also included Henry Gomez, SGS INSPIRE Market Analyst for Latin America and the Caribbean.

Daniel Amaral emphasized that transport decarbonization policies in Latin America should leverage biofuels to substitute fossil fuels as most countries have available lands (and even degraded lands) that can be used, without the risk of deforestation. He pointed at ethanol and biodiesel as the main target biofuel products in the region, also being the main biofuels used in Brazil. He underlined that biofuels also create growth for the countries involved. Ethanol plays a very important role in Brazil for light duty vehicles while biodiesel helps decarbonize heavy duty vehicles. Brazil is a net importer of conventional diesel, so biodiesel helps meet environmental concerns, to reduce import dependency and create all kind of local opportunities.

Petrobras, the Brazilian national oil company, is using bunker fuel up to 24% v/v biodiesel content, so there are good perspectives for more blending used in maritime transportation, according to him.

He regretted that soy bean oil and palm oil are being excluded by regulation from European and American markets and called for a global vision for these fuels. In his view, policies should focus on good production requirements like GHG emission reduction rather than excluding the main two vegetable oils in the world, which reduces the cooperation opportunities between LATAM countries and other regions.

Henry Gomez mentioned that we need all available feedstocks to cover biofuel demand in road transport, aviation and the maritime sector. He added that using waste as a feedstock is a challenge that must be addressed successfully in LATAM, but that soy bean production still represent a competitive feedstock compared to other regions, due to the connection with the agricultural sector, hence its strategic importance for these countries. Gomez highlighted that capacity production and mandates could be increased in many counties, and that fiscal incentives could be put in place to improve biofuel markets in the LATAM region.

Daniel Amaral mentioned that higher oil content crops beyond soy bean and corn, should be developed in Brazil. So rapeseed and sunflower are seen as options but also perennial crops, such as palm oil and macaúba (native Brazilian crop). That could be the next wave of feedstock because they could use the same land more intensively and the same crushing plants, including similar logistics. Daniel Amaral called for a reinforced partnership with the EU and the US on biofuels to increase win-win situations for all parties.