Not surprisingly, more than $23 billion has been announced in the Brazilian automotive sector in the last three months alone. These include ambitious expansion plans and the introduction of optimized engines with ethanol and hybrid vehicles that exceed the efficiency of electric motors, leveraging the use of energy-dense, very low-carbon liquid fuels and existing distribution infrastructure.
The automotive industry has a high multiplier effect, is an important source of income and employment, and is therefore considered strategically important in developed countries. Sustainable mobility and the control of carbon emissions and pollutants in urban areas are on the agenda worldwide, and various technologies have been developed in the search for greater energy and environmental efficiency. The United States, Europe, and China spend enormous public funds to align their industries with this goal, often with poor results. Brazil does not have the same financial resources, but it is building legal and regulatory tools to attract investments that can take advantage of the high share of renewable energy in its energy matrix.
With a 48% share of renewable energy in primary energy supply and 88% of renewable energy in electricity generation, Brazil is the country with the cleanest energy among the twenty largest economies in the world.
In February last year, 46.4% of all gasoline was replaced by ethanol, through the mandatory blending of 27% ethanol in all gasoline sold in the country and through the use of 100% ethanol in the Flex fleet, which is distributed to over 41,800 service stations in a country larger than the United States. Since March, biodiesel has replaced 14 percent of fossil diesel fuel nationwide and will rise to 20 percent by 2030. Brazil’s stock of passenger cars and light commercial vehicles is estimated at 45 million, 86 percent of which are flex-fuel vehicles, which can be refuelled with either petrol (E27) or pure ethanol (E100) at petrol stations. In February, 31.3% of this fleet used pure ethanol, equivalent to more than 12 million vehicles with near-zero carbon emissions, the largest fleet of clean vehicles in the world, both proportionally and in absolute terms. With its energy mix strongly geared towards renewable energies, Brazil wants to attract industrial investment in the production of automobiles and other industrial goods, and rightly creates suitable framework conditions for this purpose that provide them with legal certainty.
The Mover (Green Mobility) program, developed by the Brazilian Ministry of Development, Industry, Trade and Services and put into effect by Implementing Regulation No. 1205, replaces the old Rota (Route) 2030 and introduces the environmental vector into the efficiency goals of car manufacturers. In an innovative way, the LCA is defined as the benchmark for meeting carbon emission targets from 2027, also known as the cradle-to-grave criterion. This criterion assesses emissions from the extraction of raw materials, their processing, the production of vehicle parts and components, their upstream logistics, assembly, operation during the useful life of the vehicles, including the origin, distribution and end-use of energy, as well as the final disposal of the vehicles and all their components.
In addition to these recent measures, there is RenovaBio (the National Program for Biofuels), which was passed as a federal law in 2017 and will be implemented from 2020. It puts innovation and efficiency in the production of biofuels at the heart of Brazil’s energy strategy and automatically creates the conditions for them to move towards net-zero emissions, employing a certification system with strict criteria for independent monitoring and eligibility that mandates zero deforestation in areas where the raw materials used for production are produced.
There are only five centers of technological development in the automotive industry in the world: the United States, Europe, China, Japan and Brazil. With initiatives such as “Mover”, “Fuel of the Future“, “Godfather” and “RenovaBio”, Brazil is leading the way in introducing long-term regulations that are considered final by the scientific community, respecting the principle of technology neutrality and providing legal certainty for investments. These actions will enable Brazil to be a world leader in sustainable mobility, offering diversified mobility solutions that are practical, economical and emulable in a large group of countries with similar development and infrastructure conditions to Brazil. Not surprisingly, more than $23 billion has been announced in the automotive sector in the last three months alone. This includes ambitious plans for the expansion and introduction of optimised ethanol engines and hybrid vehicles that combine the efficiency of electric motors and the use of energy-dense liquid fuels with very low carbon emissions, leveraging existing distribution infrastructure.
Source: National Program for Biofuels, Mover Program, Brazil