From commodities to high-value exports: biofuels as a catalyst for Brazil’s energy transition and economic transformation

Abstract

This paper highlights Brazil’s urgent need to shift from low-value commodity exports to high-value biofuels. Biofuels are positioned as drivers for reducing GHG emissions and fostering sustainable development. Considering global temperature increases of 1.1 °C due to human activities, the study evaluates the potential of biofuels in this Brazilian energy transition. A literature review identified biofuels with advanced TRL, offering a market overview globally and in Brazil. The methodology also encompasses three phases: organizing a stakeholder workshop, applying semi-structured surveys, and analyzing findings to guide public policies and market strategies. The stakeholder survey shows E1G as the top export option, followed by biodiesel/SAF and HVO. Most specialists (94 %) favor biofuels combined with electrification for decarbonization, while 70 % prioritize advanced biofuels domestically. For aviation, 37 % expect near-term HEFA dominance, though 25 % question FT-SPK adoption due to EU policies. Key risks include policy shifts, feedstock shortages, market barriers, and climate impacts on production. The study underscores initiatives such as the New Industry Brazil action plan, promoting technical progress and economic diversification. Future strategies should align with no-regret policies, ensuring biofuel production addresses climate impacts and does not compromise food security. By aligning energy transition with neo-industrialization, Brazil has potential in biofuel production and export.