How did COVID-19 affect green-fuel supply chain? - A performance analysis of Brazilian ethanol sector

Paulo Nocera Alves Junior, Isotilia Costa Melo, Rodrigo de Moraes Santos, Fernando Vinícius da Rocha and José Vicente Caixeta-Filho

Research in Transportation Economics, 2022, vol. 93, issue C

Abstract: The COVID-19 pandemic affected many supply chains worldwide, including the Brazilian green-fuel ethanol supply chain. Our analysis considered sustainability variables (social, environmental, and economic) to investigate the pandemic's effects on the ethanol industries of 15 ethanol producing Brazilian states, comparing data from 2020 to 2019 and applying a novel Data Envelopment Analysis (DEA): the Double Frontier Slack-Based Measure Malmquist Productivity Index (DF-SBM MPI). The findings show that all states suffered negative impacts from the pandemic and some incurred a risk of collapsing it. The least negatively impacted states were São Paulo and Mato Grosso. São Paulo's ethanol sector is a benchmark for income derived from trade in carbon-credits by RenovaBio certified mills, while Mato Grosso's sector is able to take advantage of the largest spread between ethanol and gasoline prices, certainly a competitive advantage for ethanol producers. We recommend the implementation of public policies to support, mainly, the most affected states by assisting their mills to become environmentally certified participants to take advantage of income opportunities available in the carbon-credit trading market. We recommend, among other actions, a temporary ethanol sales tax reduction, an extension of debt repayment schedules, and stimulating an increase in the fleet of flex-fuel vehicles.

Keywords: COVID-19 pandemic; Brazilian green-fuel; Ethanol supply chain; Data envelopment analysis (DEA); Double frontier slack-based measure Malmquist productivity index (DF-SBM MPI); RenovaBio; Social isolation; Sugarcane (search for similar items in EconPapers)
JEL-codes: C02 C61 L91 O13 Q42 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.retrec.2021.101137

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