The Brazilian biofuel alternative

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Abstract:

Alternatives to fossil fuels require both appropriate technological development and subsequent adoption by consumers. While electric or hybrid automotives seem to be an international trend, the Brazilian automotive industry has instead pursued biofuels, i.e., ethanol and biodiesel. Notwithstanding its ecological advantages, certain negative elements may serve as a barrier to its widespread use, such as price, origin, and accessibility of both final product and raw materials. Using the new institutional economic framework, this study aims to identify factors that influence decision-making for the Brazilian economic agents. The study was conducted using document analysis and in-depth interviews with consumers, private agents, and experts related to biofuel production. We conclude that the Brazilian experiences with ethanol and biodiesel differ significantly from one another; the first has reached a mature level of sustainability, while the second is still dependent on institutional initiatives in order to develop fully. Implications and possible future generalisations of the Brazilian experience to other countries are discussed. Copyright © 2010 Inderscience Enterprises Ltd.