Socioeconomic effects of aviation biofuel production in Brazil

Abstract

Derived from renewable feedstocks, aviation biofuel is generally perceived as inherently sustainable. However, its production involves a wide range of sectors and interacts with different actors in society. It is therefore important to understand and evaluate not only the environmental impacts of that process, but also its socioeconomic effects. At present, empirical studies assessing socioeconomic aspects of aviation biofuel are rare in scientific literature. The aim of this study, therefore, is to assess key effects of aviation biofuel production on employment, GDP, and trade balance. A scenarios-based Input-Output (IO) analysis was used to evaluate these socioeconomic effects, taking Brazilian aviation biofuel production to 2050 as an example. To address the uncertainty of IO analysis, we have proposed a stochastic simulation approach for the technical coefficients in the IO model. Four distinct scenarios were developed. In each, three potential combinations of technologies and feedstocks for producing aviation biofuel were evaluated: sugarcane via alcohol to jet (ATJ), macauba via hydro-processed esters and fatty acids (HEFA), and eucalyptus via Fischer-Tropsch (FT). Among other things, we found that the production of aviation biofuel would create around 12,000–65,000 jobs, while contributing US$200-1100 million to Brazil's GDP under different scenarios with different supply chains. The socioeconomic effects calculated deterministically were generally higher than the stochastic outcomes, which can be explained by factors such as technological learning and economic growth. Aviation biofuel production showed large positive net socioeconomic effects on employment and GDP, although some of the fossil sectors would be negatively affected. Overall, the macauba-HEFA chain (with the highest effects on employment and GDP, and the lowest effects on imports) seemed to be the most favorable of the scenarios studied, despite the relatively high level of uncertainty associated with it.