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It does not come as surprise that only in the last three months investments in the automotive sector were announced in excess of 115 billion Reais, or 23 billion US dollars, which include ambitious plans for expansion and launching of optimized engines using ethanol and hybrid vehicles, which combine the efficiency of electric engines and the use of energy-dense liquid fuels with a very low carbon footprint that utilize the current distribution infrastructure.

The automotive industry has a high multiplier effect, is a major generator of income and employment and is therefore considered strategic in industrialized countries. Sustainable mobility, control of carbon emissions and pollutants in urban areas are in the global agenda, and different technologies have been developed in search for greater energy and environmental efficiency. The United States, Europe and China are spending huge public resources to adapt their industries towards this end, many times with deficient results. Brazil does not have the same financial ability but is correctly building legal and regulatory instruments to attract investments capable of taking advantage of the high content of renewables in its energy matrix.

With a renewable content of 48 percent in its primary energy supply, and a 88 percent renewable content in its electric matrix, Brazil has the cleanest energy amongst the twenty largest world economies.

Last February, 46.4 percent of all gasoline was replaced by ethanol, through the mandate to blend 27 percent ethanol in all gasoline sold in the country and from the use of pure ethanol by its flex fleet, distributed in over 41,800 fueling stations in a country which is larger than the continental US. Since March, biodiesel replaces 14 percent of fossil diesel all over the country, and is moving towards 20 percent in 2030. Brazil´s fleet of passenger and light commercial vehicles is estimated at 45 million, 86 percent of which are flex fuel vehicles capable of using either gasohol (E27) or pure ethanol (E100) by the free choice of consumers at fuel stations. In February, 31.3 percent of this fleet used pure ethanol, which is equivalent to more than 12 million vehicles with near-zero carbon emissions, the largest fleet of clean vehicles in the world in both proportionate and absolute terms. With its massively-renewable energy matrix, Brazil aims to attract industrial investments in automobile and other industrial goods manufacturing, and to do so, correctly, is building appropriate conditions offering them regulatory security.

The Mover (Green Mobility) program developed by Brazil´s Ministry of Development, Industry, Commerce and Services, enacted through Executive Order No. 1205 replaced the old Rota (Route) 2030 and introduced the environmental vector into automakers´ efficiency goals. In an innovative way, it defines the life cycle assessment as metric for meeting carbon emission targets from 2027 onwards, also known as the cradle-to-grave criterion. This criterion which is recognized in scientific circles as the most comprehensive and complete, evaluates emissions from the extraction of minerals, their processing, the manufacturing of auto parts and components, their upstream logistics, assembly, operation during vehicles´ useful life including the origin, distribution and final use of energy, and the final disposal of vehicles and all their components. To be confirmed, the program must be approved by Congress, moving after that to the regulatory phase.

Another measure, the Fuel of the Future bill proposed by the Administration, was reported by Congressman Arnaldo Jardim who consolidated various previous projects, has already been approved by the Lower House in Congress by a massive parliamentary majority and is currently being analyzed by the Senate. This project defines bolder targets for biodiesel blends, a higher range for ethanol blends in gasoline with the adoption in the short term of 30 percent blend in all gasoline sold, and promotes the development of biogas and biomethane, green diesel, sustainable aviation fuel (SAF), the use of biofuels in sea transport, and green hydrogen. Consistently with Mover, it adopts life cycle assessment as efficiency metric, only at a slightly longer term. Finally, the bill creating the Program for Acceleration of Energy Transition (Paten), also proposed by Jardim, was approved by majority vote of party leaders and allows the use of public bonds in guarantee for projects financing aimed at the sustainable energy transition. In addition to these recent measures, there is RenovaBio (the National Biofuels Program) approved as federal law in 2017 and implemented since 2020, which places innovation and efficiency in the production of biofuels at the center of Brazil´s energy strategy, creating automatic conditions for them to move towards net zero emissions, using a certification system which includes strict criteria for independent monitoring and eligibility, obliging zero deforestation in areas that produce raw materials used in production.

In the world, there are only five automotive hubs for engineering development: the US, Europe, China, Japan and Brazil. With initiatives such as Mover, Fuel of the Future, Paten and RenovaBio, Brazil moves ahead in defining long-term regulations which are considered definitive by science, incorporating the principle of technological neutrality, and offering regulatory security for investments. These measures place Brazil in the global forefront of sustainable mobility, and in position to offer diversified mobility solutions that are practical, economical and replicable in a large group of countries with similar development and infrastructure conditions as Brazil. It does not come as surprise that only in the last three months investments in the automotive sector were announced in excess of 115 billion Reais, or 23 billion US dollars, which include ambitious plans for expansion and launching of optimized engines using ethanol and hybrid vehicles, which combine the efficiency of electric engines and the use of energy-dense liquid fuels with a very low carbon footprint that utilize the current distribution infrastructure.

*Originalmente publicado no portal The Digest, leia aqui.

Plinio Nastari has M.Sc. and Ph.D. degrees in agricultural economics from Iowa State University, is president of DATAGRO, an international consulting firm in global agribusiness, and former president of the board of the Brazilian Association of Automotive Engineers. Since the 1980s, has assisted the Brazilian government in energy planning, trade integration and trade disputes, has advised the US Governors’ Biofuel Coalition, former US Senate Majority Leader Tom Daschle, and is on the advisory board of the Clean Fuels Development Coalition.