The bioeconomy to re-industrialize Brazil

rio de janeiro
“The bioeconomy can and should be the path for the re-industrialization of Brazil, fostering much needed innovations and development of products and processes that will fast-track the establishment of the this new norm in a global scale”. To say this – in this exclusive interview with Il Bioeconomista – is Bernardo Silva, Executive President at Brazilian Industrial Biotechnology Association (in Portuguese ABBI – Associação Brasileira de Biotecnologia Industrial), a trade association that brings together companies and institutions developing and using microorganisms and its derivatives to deliver renewable products for industries and consumers worldwide. The founding members of ABBI are Amyris, BASF, BioChemtex, BP, Centro de Tecnologia Canavieira, Dow, DSM, DuPont, GranBio, Novozymes, Raízen and Rhodia. With Silva we talk about Brazilian bioeconomy and the country’s national strategy to support the field. “The ambition to establish a vibrant bioeconomy in Brazil, which values our comparative advantages and is able to realize the opportunities arising from this new model of development, entails a joint effort between government, business and civil society to discuss, define and practice a plan that ensures the alignment of policies in place and long-term strategies, paving the way for Brazil fulfill its role as a leader a global bio-based economy.”

Interview by Mario Bonaccorso

Brazil is one of the main player of the bioeconomy at world level. Why is bioeconomy so important for the development of your country?

Given the world can no longer sustain itself through the current economic model, we see that shifting towards a new bio-based paradigm – a bioeconomy – is not only desirable, but also mandatory. Moreover, Brazil must become an example and lead this transition.

The country possibly has the best environment in the world for the formation of this new standard: appropriate climate conditions, world´s largest biodiversity, abundant non-food biomass as feedstock, and plentiful land and natural resources availability.

We have also established first-class infrastructure and knowledge base for the development of science, technologies and innovation for a bio-based economy, founded on our very successful experiences in agribusiness and biofuels. This was crucial for the increasing productivity and efficiency of our “bioeconomy”, and guaranteeing that resources are utilized in a responsible and sustainable manner.

Therefore, the bioeconomy can and should be the path for the re-industrialization of Brazil, fostering much needed innovations and development of products and processes that will fast-track the establishment of the this new norm in a global scale.

We cannot afford to shy ourselves from its leadership role, and must finally accept the bioeconomy as the country’s ultimate path towards achieving a sustainable and prosperous future for its population, and humanity as whole. The Brazilian Industrial Biotechnology Association (ABBI) was established in 2014 precisely to collaborate with government and civil society in securing and accelerating this future.

Is there a National plan to support the bioeconomy?

Brazil does not have a dedicated or integrated bioeconomy strategy. From the early 70s until today, the country has established individual policies and legislation that fostered the advent of bioethanol and, most recently, the conservation and sustainable and use of its biodiversity for economic purposes, for example.

However, the ambition to establish a vibrant bioeconomy in Brazil, which values our comparative advantages and is able to realize the opportunities arising from this new model of development, entails a joint effort between government, business and civil society to discuss, define and practice a plan that ensures the alignment of policies in place and long-term strategies, paving the way for Brazil fulfill its role as a leader a global bio-based economy.

Few efforts and initiatives, such as those proposed by the National Industry Confederation (CNI) or the Brazilian Development Bank (BNDES) provide landscape diagnostics and possible frameworks for business and government to pursue. Yet, they are not part of a national grand strategy and therefore lack the political motivation and incentives for the coherent and sustainable development of Brazil’s bioeconomy.

What should be the pillars of Brazilian strategy?

Any bioeconomy strategy adopted by Brazil must comprise industrial biotechnology at its core, leveraging the country’s agriculture production with a “food first” ideal, the scientific knowledge and technologies developed by the biofuels industry, and focusing on the re-industrialization of our economy.

The establishment and coordination of a national strategy should support regulations and programs that incentivizes benefit sharing and sustainable use our biodiversity, modernizes biosafety regulations that take into account novel biotechnologies, foster world-class technologies and best-practices in intellectual property rights, and levels the playing field with the traditional non-renewable industries.

How many biorefineries are located in Brazil?

Brazil has more than 400 sugarcane mills that can crush around 700 million tons per year. In addition, due to the lack of adequate financial or technological assets, the majority still is processing only the sugarcane juice, which represents a great opportunity for companies willing to integrate new technologies, generating synergies, cost reductions and productivity gain through second-generation ethanol technologies.

With the establishment of the PAISS program by the Brazilian Development Bank in 2010-11, Brazil has leapfrogged to the forefront of cellulosic ethanol production in less than five years, with two commercial plants and a one pilot plant tallying a production capacity of nearly 140 million liters per year, second only to the United States. Other ten commercial plants are in the pipeline for the next decade, providing production capabilities close to 10 billion liters of E2G per year and serving as platform for the consolidation of biorefineries in the country.

Which are the main industrial players?

Today we have companies such as Abengoa, CTC, Granbio and Raízen leading the pack in the commercial production of cellulosic ethanol. Biochemtex, DSM and Novozymes providing biomass conversion technologies for sugarcane residues, and Amyris and Solazyme producing biodiesel, oils and other biomaterials.

Additionally, investments in R&D and production of biochemicals by global players like BASF, Braskem, Clariant DuPont, Dow and Solvay, alongside a much consolidated paper and pulp industry, especially Klabin, Suzano and Fibria provide a very strong environment for industrial biotech and bioeconomy in Brazil.

The bioeconomy also requires a cultural change. What is the perception of the bioeconomy by the Brazilian public opinion?

There is no doubt that public perception around the bioeconomy in Brazil is very positive. A novel research done by the National Industry Confederation in 2014 show that more than 90% of interviewees have a positive perception around this concept and agree that Brazil has the potential to become a global leader in the bioeconomy. Still, more than 80% agree we are not seizing the opportunities appropriately.

We are still far from transitioning from talking the talk to walking the walk. Consumer habits is still more influenced by the economics (eg. cost) rather than positive – and sometimes hidden – externalities sustainable products or services from the bioeconomy. Legislators and government is still providing more incentives for traditional industries, non-renewable industries. This must change, and quickly.

The themes of the bioeconomy are strongly interconnected with those of circular economy. What measures is taking the Brazilian government in this field?

Brazil implemented its Solid Waste Policy (Law 12,305) in 2010, laying grounds for the National Policy on Solid Residues (PNRS) and fostering the debate among various stakeholders about the shared responsibility of product disposal and implementation of reverse logistics and waste management frameworks in cities and along the production value chain.

Furthermore, three initiatives supported by government development agencies, such as the Brazilian Development Bank (BNDES) and the National Innovation Agency (FINEP), encourages the funding of projects around the circular economy. Such mechanisms include the National Fund for Climate Change, FINEP’s Sustainable Brazil fund, and BNDES’ Funtec fund.

Finally, the Brazilian Ministry of Environment established in 2011 the Action Plan for Sustainable Production and Consumption (PPCS), providing direction and coordination to more sustainable methods of production and consumption. This plan links the country’s key environmental and development policies, especially the National Climate Change and Solid Waste Policy and the Brazil’s industrial policy (Plano Brasil Maior).

The central questions of the 21st century are not whether climate change is coming, how strongly the world population is growing and to which extent the emission of fossil carbon has to be lowered, but how economy and society will be able to best meet these developments and how research and innovation funding contributes towards this. From your point of view, how is it possible to bring ecology and economy together?

Indeed, data and information is everywhere and easy to access, therefore making this discussion focus on incentives and decisions. Nudging people into making the right and sustainable decision is one way to make these ends meet.

In Brazil, there are more than 35 million flex fuel vehicles in the streets, which can accept any mix between ethanol and gasoline or even run exclusively on ethanol. And, at this point in time, there is no doubt that ethanol is a cleaner, more sustainable transport fuel, allowing increased income and prosperity in rural areas of the country.

However, just this week when parking my car to re-fuel and requesting the station employee to fill with ethanol, he announced “it is not compensating to use ethanol over gasoline”, given the price of ethanol at the pump was over 0,7 times that of petrol, and therefore, more costly given the ethanol is consumed faster by current engines.

Needless to say this is a very backwards way of looking at the issue. Such “calculations” are repeated by media, government, and the average person who owns a car, reinforcing the infamous quote “tell a lie a hundred times and it becomes the truth”.

So how can business and government incentivize new ways of looking at the opportunity cost of making the usual decision over the right decision? How can the hidden costs of choosing, for example, to run on fossil fuels – be it the cost of pollution-related health issues, the cost of CO₂ released in the atmosphere causing climate change, and ultimately even the cost of the well-being of our children or grandchildren – be more explicit, trustful and accessible?

Behavioral nudges may be a quick and cost-effective contribution to lead us towards bringing ecology and economy together. We should take a closer look at them and make improved efforts to integrate them into new legislation, government programs and business relations.