Building Resilience in Brazil’s Biofuel Market

Case Summary: 

Brazil has a longstanding, successful biofuels program and a well-developed flex-fuel market. Gasoline and ethanol options are widespread at fueling stations across the country, and most new cars are flex-fuel vehicles that can run on any mix of gasoline and ethanol. Brazil’s sugarcane industry has benefited from the resulting increase in ethanol demand. A recent study of the impact of flex-fuel cars on retail fuel markets in Rio de Janiero concludes that increased flex-fuel car penetration corresponds with lower prices for gasoline and ethanol, suggesting that Brazil’s biofuels program broadly benefits consumers financially regardless of whether they have flex-fuel or gasoline-powered vehicles. The program also supports key climate goals, including Brazil’s INDC target of reducing greenhouse gas emissions by 43% below 2005 levels by 2030. To support this goal, the country aims to make biofuels constitute18% of its energy mix by 2030.Highlighted below, and profiled in this case study, are good practices and actions supporting positive outcomes from Brazil’s biofuels program.

  • Increased flex-fuel car penetration has resulted in lower prices for gasoline and ethanol.
  • The program has provided fuel choices to customers while achieving environmental benefits.
  • The program’s economic benefits have spilled over to those who have not adopted flex-fuel cars.
  • Brazil is building on its strong, foundational biofuels program to help the country achieve its INDC target.

Latin America and Caribbean
Action Area 
Planning and Implementation Activity 
Analysis and Data Collection, Developing and Implementing Policies and Measures
Sectors and Themes 
Climate Policy Initiative (CPI)
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