Biofuels Slow Down Electric Vehicles in Brazil

By Mario Osava Reprint | | Print | |En español

Iêda de Oliveira is the director of Eletra, a pioneer in the production of electric and hybrid buses in Brazil. In July, the company inaugurated a new plant for the production of 1,800 of these buses per year, relying on the expansion of this market in Brazil and Latin America. CREDIT: Courtesy of Eletra

RIO DE JANEIRO, Aug 19 2022 (IPS) - Brazil celebrated 100,000 electric vehicles in circulation in late July, but this is a drop in the ocean compared to the 46 million combustion vehicles registered in the country and in contrast with the pace of the phasing out of oil in the world’s automotive industry.

The lag is due to several factors, but one is the progress achieved in Brazil by biofuels, especially ethanol, which in its best years, such as 2019, surpassed domestic gasoline consumption.

Much of this consumption is due to the addition of 27 percent ethanol in Brazilian gasoline, a blend that helps reduce urban air pollution. Most of it is provided by fuel made from sugarcane.

Also contributing to the success of biofuels is the “flex car” that has been produced in Brazil since 2003, with engines that consume both fuels in a mixture of any proportion. The consumer chooses gasoline or ethanol according to convenience, generally because of the price difference.

There is a consensus that ethanol makes sense to buy if it costs less than 70 percent of the price of gasoline, because in general its consumption per kilometer driven is 30 percent higher. But some nationalists always choose ethanol, as a genuinely national product.

Thus, the transition to electric vehicles will cost Brazil not only the replacement of the entire fuel production and distribution infrastructure with electricity, but also a probable drastic reduction in its sugarcane industry, which generates one million direct and indirect jobs.

In terms of gas stations alone, for example, Brazil has more than 42,000 distributed throughout its vast territory, the largest in Latin America.

The Brazilian automotive industry, which ranks ninth in the world in terms of production, does not yet produce fully electric vehicles. Its option, for now, are hybrids, which have combustion and electric engines.

In June, of the 4,073 electrified vehicles that joined the national fleet, 73 percent were hybrids – ethanol (44 percent) and gasoline (four percent) – while the so-called plug-in hybrid electric vehicles (PHEVs) accounted for 25 percent and have batteries that are also recharged at specific points.

In the first two cases, the two engines provide propulsion or only the electric one, powered by combustion as electricity generator.

Only two of the 13 assembly plants in Brazil produce hybrids. Fully electric cars, with only batteries charged at plugs, are all imported. They accounted for 27 percent of electrified vehicles registered in Brazil in June.

Adalberto Maluf, president of the Brazilian Electric Vehicle Association, fears that the lack of a national electric mobility policy will affect the competitiveness of the Brazilian automotive industry. He decided to resign from his corporate post to run for Congress, for the Green Party. CREDIT: Courtesy of Adalberto Maluf

Brazil’s hesitation

The industrial sector advocates a gradual transition, which would include greater development and use of biofuels and hybrid vehicles, to avoid or at least delay the end of a sector that represents 20 percent of Brazil’s industrial product.

Arguments such as pollution caused by the production and disposal of batteries undermine support for electrification to combat the climate crisis.

Greenhouse gas emissions from electricity generation, a negative factor in countries that depend on fossil fuels, especially coal, do not affect electric mobility in Brazil, where renewable sources account for 85 percent of the electricity mix.

Batteries are also a barrier, as is the higher cost of electric vehicles. But technological advances are expected to make them cheaper and Brazil can benefit from domestic production, if the feasibility of a large lithium mine in the state of Minas Gerais is confirmed, as well as advantages due to the abundance of iron, nickel and niobium, other components, in the country.

Brazil’s reluctance is reflected in the lack of an “electromobility policy,” complained the president of the Brazilian Electric Vehicle Association (ABVE), Adalberto Maluf, at a Jul. 29 debate on the subject in São Paulo.

Without public incentive policies, Brazil could lose international competitiveness and get left behind by the global trend, he lamented.

Maluf, who was also director of Marketing, Sustainability and New Businesses at the Chinese company BYD in Brazil, left his corporate position on Aug. 15 to become a candidate for the lower house of Congress in the October elections for the Green Party. He promises to fight to reduce transportation pollution.

Global progress

The world produced 6.6 million new electrified cars in 2021, more than double the previous year and nearly nine percent of total motor vehicle sales, according to the International Energy Agency.

And the global trend is to go to 100 percent electric or battery-powered vehicles (BVE), rather than hybrids.

Meanwhile Brazil only incorporated 20,427 new electric vehicles during the first half of this year, out of a total of 918,000 cars, trucks, buses and commercial vans.

The automotive sector is facing a decline in production in the last two years, during the COVID-19 pandemic. Its peak occurred in 2013 with 3.7 million units produced that year.

The annual total has dropped since then, and has remained below three million since 2015. This year, 2.34 million vehicles with four or more wheels are expected to be produced.

Around the world, the accelerated advance of electrification is confirmed especially in the European Union, which decided to abolish the sale of combustion cars as of 2035. Norway, which is not a member of the EU, set that goal for 2025, viable since these new vehicles reached two-thirds of sales in the country in 2021.

China is also experiencing an electromobility boom, with three million electric vehicles sold last year, or 15 percent of all motor vehicles produced in the country.

In June 2017 the Ministry of Mines and Energy received the first electric vehicle made by Itaipu, the giant hydroelectric power plant shared by Brazil and Paraguay, as an incentive for the electrification of transportation. But little has been done since then for the dissemination of electric vehicles in the country. CREDIT: Marcelo Camargo/Agência Brasil

Buses reduce the lag

The high price of electric cars, the low investment capacity in infrastructure, the technology gap and the small scale of the market, among other factors, prevent developing countries in the South from following the trend of rich or emerging markets such as China.

But the advance of electric buses helps mitigate that disadvantage, at least in Latin America.

Brazil has the advantage of having companies that produce and export these vehicles which play a key role in mobility in large cities, in addition to a huge market. Its bus fleet exceeds 670,000 units nationwide, which will have to be replaced, since only a few hundred are electric, which is facilitated by the fact that many cities have made electromobility the goal of public transportation.

São Paulo, for example, aims to have 2,600 electric buses in service by 2024 and to eliminate all fuel-powered passenger transport by 2030. Around 15,000 buses serve Brazil’s largest city, a metropolis of 20 million people.

Several companies presented their new public transport vehicles at the Latin American Transport Fair (LatBus), held Aug. 9-11 in São Paulo.

This is the case of Marcopolo, the largest bus body manufacturer in Brazil, which exhibited the Attivi, its first 100 percent electric model for Brazilian cities. The company has already exported more than 350 buses to Latin American countries such as Argentina and Colombia, and Asian countries such as India.

Eletra, which considers itself a “national leader in sustainable transportation technology”, also presented its e-Bus buses in different sizes – 12.5 and 15 meters – fully electric buses that can travel 250 kilometers without recharging the batteries.

The company announced the inauguration of a new industrial plant in São Bernardo do Campo – basically the capital of the Brazilian automotive industry near São Paulo – with an annual capacity to produce 1,800 electric and hybrid buses, and with 1,200 employees.