Brazil hopes to tap its vast supply of soybeans and other crops to produce biodiesel fuel nationwide.

Acting on the recommendations of a biodiesel task force, Brazilian President Luiz Inácio Lula da Silva last December created a national council whose mission is to develop rules governing the production and sale of biodiesel fuel.

Since then, the council—called the Interministerial Executive Biodiesel Council (Ceib)—has met six times, setting priorities in areas ranging from the formulation of biodiesel to the incentives that will be used to promote demand for the fuel.

No target date has been established for making biodiesel available nationwide, and fundamental questions remain as to how this will be done. But government officials say the most likely scenario is that Brazil eventually will replace the diesel now sold at the pump with so-called B-5 biodiesel—a mix of 5% biodiesel and 95% conventional diesel fuel. As a first step, the Ceib in June authorized the sale and use—on a voluntary basis, starting in November—of B-2 diesel, a mix of 2% biodiesel and 98% regular diesel fuel.

A prime benefit of shifting to biodiesel would be environmental. Use of B-5 would bring a 7.5% reduction in the greenhouse-gas emissions of Brazilian diesel-powered trucks and a 17% decrease in their sulfur emissions, says Miguel Dabdoub, head of the biodiesel program at the University of São Paulo’s Ribeirão Preto campus in southeastern Brazil.

Ricardo Dornelles, general coordinator for renewable fuels at Brazil’s Mines and Energy Ministry, asserts a biodiesel strategy also would spur employment. Says Dornelles: “We believe a national biodiesel-production program could create 1.5 million new jobs.”

Most immediately, biodiesel would help the country cut costly diesel imports. Brazil imported 10% of the refined diesel it consumed last year, spending US$750 million. If B-5 biodiesel had been used instead of conventional diesel, imports of conventional, refined diesel would have been a third lower, trimming the country’s import bill by US$250 million.

“While ethanol-based biodiesel significantly reduces [greenhouse-gas] emissions, the driving force behind biodiesel research and development here is that the fuel would help Brazil reduce diesel imports,” says the University of São Paulo’s Dabdoub.

The biodiesel initiative faces major challenges. For instance, some experts say that to create sufficient demand for B-5, use of the new fuel would have to be made mandatory—a step the government is not yet willing to take. And with world soybean prices at high levels, soy—by far Brazil’s most abundant source of the vegetable oil needed for the manufacture of biodiesel—might not be economical if used in concentrations greater than 5%.

But Brazil is no stranger to alternative-fuel initiatives, thanks to its intensive manufacture of sugarcane-based ethanol following the oil-price shocks of the 1970s. Though ethanol production has dwindled here since its 1980s peak, Brazil remains the world’s leading ethanol maker. All gasoline sold at the pump here contains 25% ethanol, and fuel stations throughout the country carry 100% ethanol to accommodate those who drive Brazil’s four million ethanol-only cars—a fifth of all automobiles in the country.

Research advances claimed

And research advances being made by Dabdoub’s University of São Paulo team are bolstering the effort to add biodiesel to the country’s alternative-fuels picture.

One such advance involves reagent. Biodiesel typically consists of 89% chemically processed vegetable oil and 11% reagent to facilitate combustion of the vegetable oil. Biodiesel being developed in the United States and Europe to replace or mix with conventional diesel is not 100% renewable because the reagent it contains, usually methanol, is petroleum-based. By contrast, the reagent used in the biodiesel made by Dabdoub’s team is ethanol, which is renewable, non-toxic and biodegradable.

The University of São Paulo researchers also claim to have found a new catalyst to speed production of biodiesel. Dabdoub says the catalyst, which replaces caustic soda, cuts the time it takes to make biodiesel from the typical six hours to just 30 minutes—slashing production costs.

Daniel Pioch, a chemist specializing in oils and fat at Cirad, a bio-fuels laboratory in Montpellier, France, has been following the work of the Brazilian team for two years. He says that due to confidentiality requirements, he cannot comment on the efficacy of the new catalytic process. But he asserts a breakthrough such as that claimed by Dabdoub would give a major boost to biodiesel production.

Since January 2002, the University of São Paulo biodiesel team has made B-5 biodiesel and tested it on a fleet of 13 milk-delivery trucks owned by a private Ribeirão Preto company. Researchers say the testing has shown that the B-5-fueled trucks have the same top speeds, average speeds and torque as all-diesel trucks of the same engine size, and consume 3% less fuel. By the end of this year, B-5 fuel will be used in a fleet of 30 new Ribeirão Preto beer-delivery trucks as part of the research effort.

Brazil’s vast crop output amounts to another biodiesel boost. The task force that reported last year to President Lula recommended biodiesel production be undertaken on a regional basis, taking advantage of each area’s agricultural strength. For instance, palm oil might be used in northeastern Brazil, thanks to that region’s abundant palm plantations. Meanwhile, soybean oil would be more appropriate in the southern and western part of the country, where fast-expanding farm production has helped make Brazil the world’s second biggest soy producer.

“We recommended the use of a diversity of oils from soy and palm, to sunflower, peanut and cotton, depending on where the biodiesel is produced,” says Francelino Grando, a task force member who is technology-policy secretary for Brazil’s Science and Technology Ministry.

The task force also called for market incentives, the designation of B-5 biodiesel as the standard biodiesel mix and the mandatory use of B-5 biodiesel only as a last resort in specific regional situations.

Timing unclear

Officials express doubt B-5 will be the required diesel fuel anytime soon.

“My personal feeling is that only when there is enough biodiesel being produced to make it available nationwide should there then be legislation that makes B-5 biodiesel mandatory at the pump,” says Grando. “If we made B-5 biodiesel mandatory now, or soon, without it being [widely] available, the production of higher-priced, soy-based biodiesel would cannibalize the use of soy oil as a food product and create a scarcity of [soy oil] on the market.”

Dornelles of the Mines and Energy Ministry says he hopes the government won’t have to mandate biodiesel use.

“If we can, via credit lines and tax breaks, develop a market to make biodiesel attractive to producers from an economic point of view, its price could be cheap enough so as not to need to make [its use] mandatory,” he says.

The new biodiesel council will decide such issues with help from the operational arm created for it—the Biodiesel Management Group (GGB). Ceib’s membership includes representatives of key ministries and state-owned companies, banks and agricultural research institutions. The GGB, which is led by the Mines and Energy Ministry, draws all its members from government ministries.

As government officials have mapped early-stage biodiesel strategy, initial biodiesel production efforts have begun taking shape.

Dabdoub says petrochemical-sector entrepreneurs are building a US$7.5 million plant in São Paulo state that, starting in August, will use his team’s technology to turn out 28.5 million gallons (108 million liters) of soy-oil-based biodiesel annually. He says the biodiesel initially will be sold in Europe, where demand and prices for the fuel are high.

Palm oil...and biodiesel, too

Grupo Agropalma, Brazil’s largest palm-oil producer, plans a US$1 million facility that, beginning in December, will produce 2.1 million gallons (8 million liters) of biodiesel annually using fatty-acid waste from palm-oil production.
Agropalma’s commercial director, Marcello Brito, says the company will use 800,000 gallons (3 million liters) a year to run its cars and trucks and to fuel its generators and boilers. It will sell the remaining 1.3 million gallons (5 million liters) to companies interested in testing the new fuel on their own fleets.

“Agropalma will produce a very profitable biodiesel fuel, given that the price of palm-oil fatty acid is 30% of the price of diesel fuel,” Brito says.

Brito calculates that by using biodiesel, the company will reduce its transportation and power costs by US$500,000 annually.

Members of Abiove, Brazil’s national association of vegetable-oil companies, hope to become large-scale producers of biodiesel once ground rules for production and sale of the fuel have been set.

Granol, Brazil’s sixth-largest soy-oil company, will boost its output by 30% to manufacture biodiesel in the event the government decides to replace all or some of Brazil’s diesel fuel with B-5, says Juan Diego Ferres, Granol’s industrial director.

HLC Brasil, the Portugal-based owner of a 130-megawatt, diesel-fueled power plant in northern Ceará state, is studying the possibility of substituting diesel with fuel containing as much as 80% biodiesel. The company believes that in the remote northeast, where vegetable oil and sugarcane ethanol can be made in abundance, biodiesel might become cheaper than conventional diesel, which has to be trucked into the region.

“Also, the government, which buys our electricity, may give us longer-term energy-supply contracts for biodiesel to stimulate employment in poor areas like the northeast,” says HLC partner Marcos Nascimento. “It takes more people to produce biodiesel than it does to produce [regular] diesel.”

Gauging new fuel’s viability

To spur such efforts, the Science and Technology Ministry has pumped US$2.6 million into its own two-year-old Pro-Biodiesel program, which is designed to study the technical and economic viability of biodiesel fuel for vehicles and power plants.

The Pro-Biodiesel program brings together automakers, auto parts makers, university researchers and state laboratories to test how the use of biodiesel fuel affects automotive performance, engine wear, tailpipe emissions and other key indicators.

Grando of the Science and Technology Ministry sees particular promise in the use of biodiesel-powered electric generators in remote areas of Brazil.

“To make and distribute biodiesel for cars, you need massive private-sector investment, which makes this biodiesel application complex and difficult,” Grando says. “But [for power generation in remote regions] where transport costs make diesel fuel expensive, the use of biodiesel isn’t nearly as complex or difficult.”

It remains unclear when biodiesel pumps might become a common sight in service stations. Dornelles says the timing will depend largely on the production model Brazil ultimately embraces.

“It’s possible, using soy, to supply B-5 nationwide in two years,” he says. “But we need more time to develop biodiesel using regional alternatives to soy, such as palm and sunflower-seed oil. So it’s hard to determine when, using soy and those alternatives, we can make biodiesel available throughout the nation.”