Energy from the land – Brazil’s strength in times of fluctuating oil prices
The country produces almost a third of its energy in agriculture. This makes it an attractive location for sustainable value creation.
by Alexander Busch, Latin America correspondent for Handelsblatt and Neue Zürcher Zeitung
In view of the wars in the Middle East, there has been growing concern in Latin America in recent days that the price of oil could once again reach historic highs. This would be bad for the global economy, as rising oil prices would fuel inflation. Central banks would be forced to raise interest rates. The result would be a stagnation of the global economy with high inflation.
In Brazil, these scenarios are viewed less dramatically than in Europe or Asia, which are dependent on oil imports. One reason for this is that Brazil itself is a major oil producer. Brazil ranks 10th among the world’s oil exporters.
On the other hand, Brazil’s own agriculture covers its energy demand. 30 percent of the energy consumed in Brazil in the form of electricity or fuel comes from farms. This is rare worldwide. Only Thailand and the Scandinavian countries have similarly high proportions of agricultural energy in their energy systems. In Germany, only around eight percent of energy comes from biogas plants. In South America, Uruguay is similarly advanced.
A corresponding study has just been published by the Observatório de Bioeconomia of the Fundação Getulio Vargas (FGV) in São Paulo. There, ethanol and biodiesel from sugar cane, maize and soy are blended as fuels or used on their own. In Brazil, a blending of 20 percent ethanol with petrol (E20) and 15 percent biodiesel with diesel (B15) will be mandatory nationwide from August.
The sugar companies also burn biomass and feed it into the electricity grid. Today, the factories could generate as much electricity as the whole of Argentina. In turn, organic waste is processed into gas in biogas plants.
The proportion of energy from the field is set to increase. However, the second generation of ethanol production is still in its infancy. Enzymes are used to use the fibers of sugar cane to produce ethanol. Ethanol production from maize is also growing rapidly. The first pilot projects for the production of SAF (Sustainable Aviation Fuel), i.e. sustainably produced fuel for aircraft, have been launched. The most important goal for agriculture will be to replace the still high diesel consumption with sustainably produced fuels.
More and more farms are feeding their electricity directly into the grid or becoming energy self-sufficient with the help of solar panels. As a result, they will also play a role in the development of green hydrogen. The FGV study shows that around 60 percent of all sustainably generated energy in Brazil comes from agriculture.
However, Brazil’s sustainable energy autonomy has hardly been perceived as a locational advantage in Europe to date. This is astonishing, because in view of current geopolitical developments, energy autonomy is becoming an increasingly important location factor.
Europe is currently experiencing once again how dependent it is on foreign energy supplies – be it Russian natural gas or oil from the Middle East. Since the “oil crises” half a century ago, Europe has not succeeded in reducing its dependence on energy imports.
Brazil’s pioneering role in energy production goes largely unnoticed in Europe. With the argument of a lack of nature conservation, for example in the Amazon rainforest, Brazil’s progress in energy production from agricultural raw materials is often viewed one-sidedly – and the potential overlooked. China, for example, sees things differently and is very interested in adapting parts of the Brazilian agricultural energy system for itself.
