Antonio Domingos Padula
UFRGS, Brazil
Title: A competitiveness analysis of alternative oilseeds for biodiesel production in Brazil
Biography
Biography: Antonio Domingos Padula
Abstract
The quest to develop energy matrices with higher content of renewable energy has encouraged efforts in different countries to produce and use liquid biofuels as substitutes for petrol and diesel. Biodiesel is a fuel produced from renewable sources such as vegetable oils and animal fats. In Brazil, the production and use of biodiesel is regulated by the institutional framework proposed by the national program for the production and use of biodiesel (Programa Nacional Produção e Uso de Biodiesel Produção - PNPB). The diversification of raw materials to produce biodiesel is among the main PNPB objectives. However, in Brazil, this biofuel is predominantly produced using soybeans (83%). In order to understand the reasons for the predominance of this oilseed, this research evaluated the competitiveness, economic efficiency and political effects of biodiesel production using three alternative oilseeds in Rio Grade do Sul state (the largest biodiesel producer in Brazil): Soybean, canola and sunflower. The research was conducted using the Policy Analysis Matrix (PAM) approach, which assists in analyzing and defining public policies and identifying possible market failures that might influence the economic outcomes of agribusiness chains, while assessing the competitiveness and efficiency of those systems. The results indicate that the three oilseed chains are competitive. Nevertheless, the superiority of biodiesel production from soybean chain is notable, as this chain is well organized, more competitive and more economically efficient. On the other hand, policy distortions were observed which disadvantage the private and social profitability of the three studied chains, such as the farmer’s payment system based on the seed weight, although the percentage of oil and prices differ substantially among the different raw materials, besides the significant differences in technological standards adopted in the different crops production. The results indicate the need to review the tax incentive policies, subsidies and payments to farmers of the different crops used for the production of biodiesel.