Biodiesel in Brazil: A Market Analysis and Its Economic Effects

The commercial production of biodiesel in Brazil began in 2005 and increased in such a way that the country has become one of the largest producers in terms of volume in 2012. This study aims to analyze the biodiesel market in Brazil and its socio-economic effects resulting from the mandatory addition of biodiesel in the distribution system of mineral diesel. This work is characterized as a qualitative and exploratory study. The technical procedures adopted include literature research and data collection from government agencies involved. It is highlighted that the Programa Nacional de Produção e Uso de Biodiesel no Brasil - PNPB (“National Program for Production and Use of Biodiesel in Brazil†) was designed for the purposes of- promoting rural development; the growth of biodiesel production plants; and positively impact the environment. The survey showed the following results- i) significant increase in investment in renewable energy, especially biodiesel, ii) a high unused capacity in the biodiesel production plants; iii) a high dependence on soy for biodiesel production, iv) unfavorable prices of oilseeds; v) high concentration of the biodiesel market; vi) difficulty in standardizing the biodiesel auctions; vii) a small increase in inflation; viii) increased generation of income, employment and Gross Domestic Product (GDP) due to the presence of biodiesel in the energy market. It was found that by adding a percentage of biodiesel to diesel oil caused positive impacts on the national economy, contributing to improvement in employment policies, income distribution, environmental issues, technological and regional development.