Targets and results of the Brazilian Biodiesel Incentive Program – Has it reached the Promised Land? Régis Rathmann ⇑ , Alexandre Szklo, Roberto Schaeffer Energy Planning Program, Graduate School of Engineering, Federal University of Rio de Janeiro, Centro de Tecnologia, Bloco C, Sala 211, Cidade Universitária, Ilha do Fundão, Rio de Janeiro, RJ 21941-972, Brazil article info Article history: Received 5 July 2011 Received in revised form 31 October 2011 Accepted 13 November 2011 Available online 3 December 2011 Keywords: Brazilian Biodiesel Program Socioeconomic effects Physico-chemical properties Energy efficiency CO 2 emissions mitigation abstract This study tests the assumptions that justified the establishment of the Brazilian Biodiesel Production Program (PNPB), to see whether this program has achieved its promised results. Given the connection between socioeconomic, political, technological and environmental issues, the study performs an analysis covering these different dimensions. From the socioeconomic standpoint, findings of the study show that the generation of jobs in the agricultural sector has been much lower than the expected 1.3-million-job creation figure. From the standpoint of reducing the outflow of foreign exchange because of potentially lower demand for imported diesel, the option for the methanol instead of ethanol production route has led to an increased net outflow, as the greater need to import methanol to produce biodiesel more than offsets the lesser need to import mineral diesel. Nevertheless, even though the ‘‘Promised Land’’ has not been reached, particularly from a socioeconomic standpoint, the premises of energy efficiency and the potential to mitigate GHG emissions appear to be on solid ground. In this respect, the input/output energy ratio of producing soy-based biodiesel and the GHG mitigation potential of pure biodiesel justify the continuing effort to improve the PNPB to achieve more promising results in relation to the other indicators. Ó 2011 Elsevier Ltd. All rights reserved. 1. Introduction Over the years, Brazil has promoted the introduction of biodie- sel in the country’s energy mix through various socioeconomic, en- ergy and environmental policies and measures [1–5]. However, although discussion of the use of vegetable oils for fuel purposes in Brazil started as far back as the 1920s, only in 2002 the country did efforts to specify biodiesel obtained from oilseeds, under the aegis of the Brazilian Biodiesel Network (PROBIODIESEL) [6]. Then, in December 2004, the Brazilian Biodiesel Production Program (PNPB) was established, basically through defining targets for blending biodiesel with mineral diesel [7,8]. 1 The main reason behind the requirement to blend biodiesel with diesel was the potential to generate jobs and income in poor rural areas with the use of a wide range of oilseeds (particularly castor beans) [2,4]. Other reasons behind PNPB were: (i) the poten- tial improvement in the country’s trade balance, since Brazil is a net importer of diesel; (ii) the availability of many oilseed plants suitable for biodiesel production without affecting food security; (iii) the perfect substitutability between biodiesel and regular die- sel; (iv) the energy efficiency of the biodiesel production cycle; and (v) the CO 2 mitigation potential associated with the use of biodie- sel, as a replacement for regular diesel [5,6,9]. PNPB aimed at addressing all these issues simultaneously, and at a global level. Interestingly, the case of Brazil did not differ from the cases of other countries that aim at promoting biodiesel production under the aegis of different objectives (social, environmental and technological). However, in a context where various countries are setting up biodiesel programmes [10,11], there is a growing concern about all sustainability aspects of those programmes [4,5,9–31]. There is a recent scientific literature focusing on this subject. At the international level, some studies have emphasized the technical challenges of producing biodiesel [10,11,14–19,21,22,26–31], focusing on its environmental sustainability [10,11,14,17,22]. These studies have not focused directly on the socioeconomic sustainabil- ity aspects of biodiesel production, however. Therefore, although emphasizing the case of Brazil, our study can help understanding the challenges of promoting biodiesel aiming at simultaneously achieving environmental, social and energy objectives. 0306-2619/$ - see front matter Ó 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.apenergy.2011.11.021 ⇑ Corresponding author. Tel.: +55 21 2562 8760; fax: +55 21 2562 8777. E-mail address: rathmann@ppe.ufrj.br (R. Rathmann). 1 All the blend percentages referred to in this article are by volume. Initially, 2% (B2) was voluntary from 2005 to 2007, and was to become mandatory starting in 2008, rising to 5% in 2013 (B5). However, the National Energy Policy Council (CNPE) made mixing 3% (B3) mandatory as of July 1, 2008. This rose to 4% on July 1, 2009 and 5% as of January 1, 2010. This ability to meet the 5% target earlier was due, in large part, to the mobilization of the productive base in the country. Biodiesel production reached 2.4 billion liters in 2010, while current capacity is 5.2 billion liters a year, from 65 refineries. Applied Energy 97 (2012) 91–100 Contents lists available at SciVerse ScienceDirect Applied Energy journal homepage: www.elsevier.com/locate/apenergy