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Feedstock diversification for biodiesel production in Brazil: Using the Policy Analysis Matrix (PAM) to evaluate the impact of the PNPB and the economic competitiveness of alternative oilseeds

Camila Elisa dos Santos Alves, Luiz Clovis Belarmino and Antonio Domingos Padula

Energy Policy, 2017, vol. 109, issue C, 297-309

Abstract: While biodiesel feedstock diversification is a main objective of the Brazilian National Program for the Production and Use of Biodiesel (PNPB in Portuguese), its achievement has remained elusive and biodiesel is predominantly produced from soybean (75%). This research uses the Policy Analysis Matrix (PAM) approach to evaluate the PNPB effects and compare the economic efficiency and the competitiveness of biodiesel from three oilseeds: soybean, rapeseed and sunflower. In contrast to papers that present results of experimental biodiesel production initiatives, this paper explores the case of “representative” production chains (best available technology and management practices). The findings indicate that biodiesel production is competitive from the three oilseeds, but the profitability of biodiesel from the soybean is notably higher. The tax breaks and subsidies provided by the PNPB have a positive impact on the profitability of biodiesel production chains (7.43% for soybean, 3.88% for rapeseed, 5.53% for sunflower). These results are encouraging and suggest two actions: i) to review the incentive policies (tax reduction) and payments to farmers of the different crops (pay for oil content instead of crop yield); and ii) to invest in organizational and managerial approaches in the alternative oilseed agricultural systems to improve their technical and economic efficiency.

Keywords: Biodiesel; Feedstock diversification; Green energy economy, green industrial policy; Policy analysis matrix (PAM) (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.enpol.2017.07.009

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