The role of productivity and efficiency gains in the sugar-ethanol industry to reduce land expansion for sugarcane fields in Brazil

André Felipe Danelon, Humberto Francisco Silva Spolador and Jason Scott Bergtold

Energy Policy, 2023, vol. 172, issue C

Abstract: During the 2000s, the development of flex-fuel automotive vehicles in Brazil and rising international commodities prices allowed the Brazilian sugar-ethanol sector to grow at higher rates and expand area planted to sugarcane relative to levels verified in the 1990s. However, this land expansion increases the pressure on land-use change and management. This paper seeks to estimate the technical efficiency and decompose the total factor productivity (TFP) in the sugar-ethanol industry using a stochastic frontier framework. Primary data was obtained from an unbalanced panel of 90 sugar and ethanol producers for the harvest years from 2012/2013 to 2016/2017, providing 209 valid observations. Results suggest that mills have a small gap to increase their efficiency under the current technology, and the industry's TFP has been primarily impacted by the efficiency effects, on the other hand, SE mills might improve TFP rising their scale of production. Therefore, the results in this paper suggest that small SE mills may benefit from merging with other mills to explore economies of scale to enhance their TFP and strengthen economic competitiveness, contributing to the Brazilian environmental policy agenda.

Keywords: Land use; Biofuels; Productivity; Sugarcane (search for similar items in EconPapers)
JEL-codes: O1 O4 Q15 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421522005468
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:172:y:2023:i:c:s0301421522005468

DOI: 10.1016/j.enpol.2022.113327

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().