GLOBAL SCENE Team Ethanol on a Marathon

Global Scene

Leticia Phillips

North American Representative Brazilian Sugarcane Industry Association, UNICA 202.506.5299

leticia@unica.com.br

Team Ethanol on a Marathon

I write this column days after attending the 2022 National Ethanol Conference in New Orleans, where industry leaders, environmentalists and policymakers came together to “zero in on new opportunities” and discuss ways to make a low-carbon future a reality.

The Brazilian Sugarcane Industry Association (UNICA) was honored to be part of the conference and bring the perspective of Latin America and the Southern Hemisphere into a conversation that has worldwide implications.

The world cannot transition away from fossil fuels without ethanol and other emerging biofuel technologies. At the same time, our industry needs to have a long-term strategic view when all signs point to a future dominated by electric vehicles, as this road will be long and challenging.

That was the theme of UNICA’s president Evandro Gussi’s speech to the conference. Dr. Gussi invoked a timeless sports analogy reminding the audience that the transition to a low-carbon future will be a marathon, not a sprint.

He reminded the attendees that although the sprint—increasing short-term revenue, boosting exports and competing for market share—is important, we will only succeed if we approach this race with a marathon mindset.

Dr. Gussi’s speech came a day after Pablo Di Si, Volkswagen’s executive chairman for Latin America, said that customers want the connectivity of the electric vehicles (EVs), but he believes ethanol can play an important role—not only in the transition but in the future of electric powered vehicles. To that end, Volkswagen has partnered with the Brazilian State University of Campinas (UNICAMP) to research fuel-cell technologies that extract hydrogen from ethanol, and batteries made from sugarcane bagasse. Ethanol-powered vehicles already deliver significant greenhouse gas (GHG) reductions, and UNICAMP’s findings could be a game changer for Brazil and many other countries that could use this technology.

Going back to our marathon analogy, this is where we will earn our paychecks. Over the long haul, the biofuel industry will live or die by its ability to maintain a sustainable business model that can withstand scrutiny from the environmental community. Deepening our ties with automakers like Volkswagen will also help broaden ethanol’s reach. Besides VW, other major companies are also involved in such technologies in Brazil, like Toyota, which has launched the first hybrid flex-fuel models in the world, and Nissan, which has developed some prototypes of SUVs with fuel-cell technologies currently being tested on Brazilian streets. Ethanol can be an ally to these manufacturers, either in combustion engines or in EVs.

In this long road ahead of us, as countries continue to promote decarbonization policies, it is important for us to fight for a performance-based approach that focuses strictly on greenhouse emission reduction and increasing fuel efficiency without dictating the use of specific fuels and vehicles to achieve those reductions. A true “cradle to grave” emissions accounting would show the true potential of ethanol-powered vehicles. This is a story that must be told repeatedly to an admittedly skeptical audience, and the biofuels industry must not shirk from it.

The private sector is critical to our marathon and expanded access to green financing and carbon markets will fortify the market’s involvement in reducing GHG. Brazil’s National Biofuels Policy, RenovaBio, created in 2017, has helped, and will continue to help expand the domestic sustainable biofuels market and hasten the replacement of fossil fuels in our transportation sector.

Finally, the marathon will not be complete unless biofuels play a central role in the aviation fuel revolution. Cars and trucks account for most of the transportation sector’s GHG, but aviation represents a still-high 10 percent. The aviation industry has pledged a 50 percent reduction in CO2 by 2050 (compared to 2005 levels) and policymakers—as well as the flying public—will hold them accountable.

To their credit, the major airlines, manufacturers and shippers like FedEx and UPS are advocating policies and testing new sustainable aviation fuels that will pay big climate dividends in the not-too-distant future. This is a remarkable opportunity and UNICA plans to do its part.