BUILDING RESILIENCE IN BRAZIL’S BIOFUEL MARKET

This briefing describes a study by the Climate Policy Initiative, PUC-Rio, and Fundação Getulio Vargas on the impact of flex-fuel vehicles on the retail fuel market in Brazil. It highlights how the adoption of flex-cars, which can run on any mix of gasoline or ethanol, has reduced fuel prices for both flex-car owners and those driving gasoline-only vehicles, supporting Brazil's goals to increase sustainable biofuel consumption under its Nationally Determined Contribution (NDC).

• Brazil possesses a highly developed biofuel infrastructure, with a renewable energy share of 40% of its total energy mix, which is three times the global average. The adoption of flex-fuel vehicles was significant, with 94% of all new cars registered in the country in 2008 being flex-cars.
• To meet its Nationally Determined Contribution (NDC) goals under the 2015 UNFCCC, Brazil aims to expand ethanol supply and increase the share of sustainable biofuels in its energy mix. This is supported by a growing sugarcane industry, which saw a 70% increase in production area between 2005 and 2012, with forecasts suggesting a further increase of up to 37% over the next decade.
• Research indicates that the growth of the flex-car market provides broad consumer benefits, including for those who do not own flex-cars. A 10-percentage point increase in flex-car market share resulted in ethanol prices dropping by approximately eight cents of Brazilian reais and gasoline margins decreasing by two cents of Brazilian reais.
• A specific study of the retail fuel market in the state of Rio de Janeiro estimated that Brazilian consumers saved approximately 70 million Brazilian reais (about 36 million dollars) at the pumps in 2007 due to the size and sales of the flex-car fleet. The study found that increased flex-car penetration increased the degree of substitution between ethanol and gasoline, lowering prices in both markets.

APA

Assunção, J., Pessoa, J. P., & Rezende, L. (2017). BUILDING RESILIENCE IN BRAZIL’S BIOFUEL MARKET. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/08/CPI_Building_Resilience_In_Brazils_Biofuel_Market.pdf

Chicago

Assunção, Juliano, João Paulo Pessoa, and Leonardo Rezende. BUILDING RESILIENCE IN BRAZIL’S BIOFUEL MARKET. Climate Policy Initiative, 2017. https://www.climatepolicyinitiative.org/wp-content/uploads/2017/08/CPI_Building_Resilience_In_Brazils_Biofuel_Market.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Pessoa |first2=João Paulo |last3=Rezende |first3=Leonardo |title=BUILDING RESILIENCE IN BRAZIL’S BIOFUEL MARKET |publisher=Climate Policy Initiative |date=August 2017 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2017/08/CPI_Building_Resilience_In_Brazils_Biofuel_Market.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2017building, author = {Assunção, Juliano and Pessoa, João Paulo and Rezende, Leonardo}, title = {{BUILDING RESILIENCE IN BRAZIL’S BIOFUEL MARKET}}, institution = {Climate Policy Initiative}, year = {2017}, month = aug, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2017/08/CPI_Building_Resilience_In_Brazils_Biofuel_Market.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }