**4. Current and future production, consumption, and capacity**

#### **4.1. Production, consumption, and installed capacity before RenovaBio**

Historically, Brazil has adopted soybean and beef tallow as the main feedstocks for the fulfillment of biodiesel demand in the country. As previously mentioned, soybean alone accounts for three-fourths of the domestic production, mostly done in the Mid-West and in the South, regions that house the vast majority of Brazil's biodiesel plants, whose owners are also major soy producers and agribusiness companies, well established in both areas for a long time and, therefore, are better prepared to take advantage of the big soy market that was developed throughout the country [3].

Since the inception of the PNPB program, in 2005, biodiesel production has leap-frogged from 736 thousand to 4.3 billion liters in just 12 years (**Figure 3**). Such a growth turned Brazil into the second biodiesel producer in the world, trailing only the United States, as the number one producer with approximately 5.5 billion liters, in 2016 [44].

necessary not just to expand the capacity of current plants but also a twofold increase in the

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That kind of growth will require an investment volume of R\$ 21.7 billion [45], equivalent to approximately US\$ 7 billion, from the government and the private sector, which will represent a major boost on the local economy where the current biodiesel plants are already

Such expansion in the production and use of biodiesel should represent some positive externalities like the creation of new jobs along the entire biodiesel chain, and the reduction of

The complexity of this policy requires the government to pay special attention to questions on how the process steps will be supervised and how to allocate the individual targets of the biofuel distributors which, in turn, can acquire the decarbonization certificates whose prices

The technology mostly used to produce biodiesel in Brazil is the transesterification, which is inefficient. Besides, the process uses methanol, which is from a fossil source, instead of ethanol, which is cleaner, renewable, and produced locally from sugarcane. And the country still imports a good chunk of the alcohol that is used to produce biodiesel, therefore affecting

Furthermore, there needs to be greater incentives for the diversification of the mix of raw materials used in the production of biodiesel, since soybeans and beef tallow together represent about 90% of the total and they present environmental problems due to the use of pesticides and herbicides [47], as well as GHG from land use and land use change [48].

Perhaps alternative sources, such as palm—whose yield per hectare is approximately six times greater than that of soybeans [22]—may be an option. However, this feedstock still needs investments in R&D so that its production increases in such a way that the amount of available oil would be enough not only to meet its main market—culinary—but also the

Although at this moment in time palm does not have enough scale to meet the market demand for biodiesel, Embrapa's research with this oilseed has had positive results in adapting it to other environments that are different from the traditional ones in the legal Amazon, where

Thus, it is hoped that palm oil will have a much larger penetration in the mix of raw materials for the production of biodiesel and, therefore, provide a greater competitiveness of the sector and increase the income of family farmers, especially those from the north and

still need to be defined, as well as the costs for the certification of production [46].

 emissions in the atmosphere as a replacement for part of the petroleum diesel Brazil still needs to import, which should represent an economy of US\$ 1 billion per year for an equiva-

number of biodiesel plants in operation now (**Table 3**).

installed, as well as where the new ones should be built.

lent amount of nearly 1.2 billion liters of diesel not imported [3].

**5. What still needs to be done in spite of RenovaBio**

CO2

the trade balance negatively.

production of biodiesel.

most of palm is harvested [21].

In footstep with the production growth, the installed capacity also jumped from zero to approximately 8 billion liters in about the same period (**Figure 3**). If on one hand, this growth leads to an idle capacity rate that is close to 50%; on the other hand, it makes biodiesel producers optimists to comfortably meet the production forecasts for at least 5 years after the enactment of the new biofuel policy.

#### **4.2. Production, consumption, and installed capacity after RenovaBio (forecast)**

The expected biodiesel production growth to 18 billion liters in 2030 suggests a major boost of the installed capacity to around 22 billion liters. In order to meet that forecast, it will be

**Figure 3.** Biodiesel annual production (B100) and accumulated installed capacity. Source: Adapted from [25].

**Table 3.** Future scenario for soybean processing units and biodiesel refining.

necessary not just to expand the capacity of current plants but also a twofold increase in the number of biodiesel plants in operation now (**Table 3**).

That kind of growth will require an investment volume of R\$ 21.7 billion [45], equivalent to approximately US\$ 7 billion, from the government and the private sector, which will represent a major boost on the local economy where the current biodiesel plants are already installed, as well as where the new ones should be built.

Such expansion in the production and use of biodiesel should represent some positive externalities like the creation of new jobs along the entire biodiesel chain, and the reduction of CO2 emissions in the atmosphere as a replacement for part of the petroleum diesel Brazil still needs to import, which should represent an economy of US\$ 1 billion per year for an equivalent amount of nearly 1.2 billion liters of diesel not imported [3].