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Extended Essay
Extended Essay
Extended Essay
Title: The Main Issues Surrounding the Biofuel Industry in the State of São Paulo
Research Question: What are the main obstacles surrounding the ethanol industry in São
Paulo?
Subject: Geography
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Contents Page
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Introduction
Recently, humanity has been facing a significant dilemma: climate change. One of the
contributors to climate change is the burning of fossil fuels. Many scientist and businesses are
searching to replace fossil fuels with renewable and efficient energy sources to mitigate climate
change. This essay will investigate the prospect of ethanol as an energy source in the state of
The state of São Paulo is located in the southeast region of Brazil, South America. It is
the most populated state in Brazil, with about 41 million people. The state accounts for a third
1
Meyer, Amelia. "Sao Paulo (State)". Brazil.Org.Za, 2019, https://www.brazil.org.za/sao-paulo.html. Accessed 24
Nov 2019.
population is around 11 million but including the connecting towns, the metropolitan area is
It is evident that the state requires a big supply of energy for its economy and society to
function. To understand the current role of biofuels in supplying energy to the state of Sao
Paulo, it is paramount to look at the history of energy in the state. Increase in demand for
electricity in São Paulo began in the late 1880s when Brazil’s rapid industrialization, especially in
the South and the Southeast regions, greatly increased the demand for electric energy.
Subsequently, after the First World War, electricity demand increased, when the global demand
for coffee bean, one of the state’s main agricultural products, collapsed and urbanisation and
industrialization took hold.3 Brazil’s focus and main alternative to fossil fuels has been
hydroelectric power (HEP), mainly due to the country’s lack of coal resources and its vast supply
of rivers and waterfalls. HEP arrived in the state of São Paulo in the beginning of the 20 th
century. Today Sao Paulo’s energy supply comes mainly from hydroelectric power; however,
the demand for a more diversified energy supply continues to increase and HEP is not sufficient
to meet the state’s demand. Sugarcane products, such as ethanol, account for 29% of Sao
Paulo’s internal energy and 19% of its electric energy supply 4. In fact, it has become a real
question whether HEP will be able to sustain Brazil’s energy demand in the future.
2
“Sao Paulo Population 2019”. Worldpopulationreview.Com, 2019, http://Worldpopulationreview.com/world-
cities/sao-paulo-population/. Accessed 24 Nov 2019.
3
Hesla, E. “Electricity in Brazil-Part 1”. Ieeexplore.ieee.org, 2019, https://ieeexplore.ieee.org/document/5711613.
Accessed 20 Feb 2019.
4
“Energy”. Saopauloglobal.sp.gov.br, 2019, http://www.saopauloglobal.sp.gov.br/frameSetores.aspx?
gp=10&IdIdioma=2&IdTrad=76. Accessed 20 Feb. 2019.
4
There are three main issues surrounding the production of ethanol in São Paulo. First, is
the topography of the land surrounding the city of São Paulo and the rest of the state. The
second is the production efficiency of ethanol, and finally, the demand for ethanol. The land
surrounding the city of São Paulo is crucial for any agribusiness because it can be costly to
develop the infrastructure to sustain the flow of goods between the city and the interior of the
state. If producing ethanol in São Paulo is more costly than its output, then the chances that
ethanol will become a major source of energy will be greatly reduced. Furthermore, the
production of sugarcane can be affected by weather and soil fertility; if these aren’t suitable for
the production of ethanol, it will be very difficult to continue the development of sugarcane and
other sources of ethanol in São Paulo. It is also important for this investigation to inquire about
the views on ethanol in São Paulo for this will dictate if elected governments will prioritise
investing in biofuels or not. Additionally, the status of Brazil’s and Sao Paulo’s economy is key
for the biofuel business in the state, if the economy is growing then the demand for energy will
This investigation focuses on the geographical aspects that affect ethanol, such as
topography and people. However, this investigation also looks at synoptic issues that could be
used to better explain the future of the ethanol industry. It is very important that this study
looks at different areas of study, such as economics, so it can truly analyse the challenges to the
ethanol business.
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Methodology
regarding ethanol as an energy source. To analyse these three factors, I have decided to gather
Regarding the limitation of infrastructure in São Paulo, I used a map detailing the relief of
Brazil that was constructed using the Generic Mapping Tools Software that used public datasets
gathered by GLOBE, SRTM and ETOPO25. Other figures were used such as: a diagram illustrating
the linear relief of the land encompassing the city of São Paulo. The diagram was originally
created by author Karl Hueck who published it in their book titled “As Florestas da America no
Sul”6. which help illustrate the topography of the state of São Paulo. I also used Google Maps to
illustrate the scale of the state including the distances between the interior and the city. Using
the data from the relief, I will then use the internet and other secondary sources to look at its
effects on infrastructure. All this would analyse how the area’s relief affected the transportation
In regard to the limitations of producing ethanol, I interviewed the head market specialist at
Raizen, Marieangela Grola, who had a lot of information on the production of Ethanol and a lot
of experience in the market. I asked her 4 questions but also asked some other follow up
5
"File:Brazil Topo.Jpg - Wikimedia Commons". Commons.Wikimedia.Org, 2020,
https://commons.wikimedia.org/wiki/File:Brazil_topo.jpg. Accessed 22 Jan 2020.
6
Bdpa.Cnptia.Embrapa.Br, 2020, https://www.bdpa.cnptia.embrapa.br/consulta/busca?
b=ad&id=293471&biblioteca=vazio&busca=autoria:%22HUECK,%20K.%22&qFacets=autoria:%22HUECK,%20K.
%22&sort=&paginacao=t&paginaAtual=1. Accessed 22 Jan 2020.
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1. Is it true that it takes more energy to produce ethanol than the energy it produces?
2. More ethanol is consumed as a fuel for vehicles or for the production of electricity?
3. What are the biggest obstacles regarding the production of Ethanol in Brazil?
4. What have and are the government’s intentions in the Biofuel Market?
I then added data from secondary sources such as the internet to back up the information I
Finally, in respect to the demand of ethanol, I will base my research on the Kuznets curve.
The Kuznets curve illustrates that there is a negative quadratic relationship between
GDP per capita and environmental degradation. Countries whom have low GDP’s per capita will
prioritize economic growth over anything else, including the environment. The majority of
people living in these countries are poorly educated about the environment, already have a lot
of problems due to poverty, and governments and businesses don’t have enough money to
mitigate pollution or other damages to the environment. Therefore, as GDP per capita
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increases, at this stage, more harm will come to the environment through construction,
pollution and etc. As the country reaches the point of inflection, because people or more
educated and have less problems regarding money, people will start demanding both
government and business to stop harming the environment. Furthermore, because businesses
and governments are wealthier at this stage, they will be able to spend that money in ways to
reduce the damage to the environment. Therefore, after the point of inflection an increase in
GDP per capita will lead to a decrease in environmental degradation 7. I will use the theory to
analyse if Brazil is likely to increase the use of ethanol or not. To test if the theory applies to São
This questionnaire is 100% anonymous, your individual data will not be publicized. The first
section is regarding individual information. Only answer the Questionnaire if you are 16 and
1. Do you believe that energy security for SP should be one of the government’s main
priorities?
a. Strongly agree
b. Agree
d. Disagree
e. Strongly disagree
a. Strongly agree
7
Agarwal, Prateek. "The Environmental Kuznets Curve | Intelligent Economist". Intelligent Economist, 2020,
https://www.intelligenteconomist.com/environmental-kuznets-curve/. Accessed 25 Jan 2020.
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b. Agree
d. Disagree
e. Strongly disagree
a. Strongly agree
b. Agree
d. Disagree
I will not only look at how the results from the questionnaire compare to what the theory says
The completion of all the above, will lead to a thorough response to my three hypotheses:
1. Does the topography of the state of São Paulo limit rail transportation of ethanol?
infrastructure, goods, services and labour cannot reach markets or manufacturers. Therefore,
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without suitable infrastructure it is impossible to carry out business. Although sugarcane is
refined into ethanol on site, ethanol needs to be transported to urban areas for it to be sold,
Rail transport is one of the most common and efficient ways to transport ethanol from
its site of production to its market. Despite its efficiency, rail transport is susceptible to
topography. Relief can impose constraints on the gradient and track alignment of railways.
Passenger trains can only climb 40 metres every kilometre, which means the track can only
elevate 4o; freight trains are constrained to a 1 o elevation. This means that freight trains require
50 kilometres to climb 500m. Freight trains are used to carry cargo not people and therefore
usually carry more weight than normal trains. The transportation of ethanol is done via freight
train and ethanol has a density of 789kg.m -3; this means it is pretty heavy to carry. Freight trains
traveling long distances and with heavy cargo consume a lot of energy; the amount of energy
they consume is heavily compounded by increases in the gradient that they are travelling 8.
8
Rodrigue, Jean-Paul. "Rail Transportation And Pipelines". The Geography Of Transport Systems, 2019,
https://transportgeography.org/?page_id=1759. Accessed 20 Dec 2019.
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Figure 1
Here is a closer look at the region surrounding the city of Sao Paulo:
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Figure 2: "File:Brazil Topo.Jpg - Wikimedia Commons". Commons.Wikimedia.Org, 2019,
https://commons.wikimedia.org/wiki/File:Brazil_topo.jpg. Accessed 25 Nov 2019.
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The area marked in red This large green area is the Serra and divides The interior of the
is Sao Paulo and the the flat plane of Sao Paulo from the coastline state is flat and
urban sprawl around it and the interior. It features a large humid forest includes the majority
is called “Grande Sao on a mountainous ground making it impossible of the state’s
Paulo”. to build on. farmland
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Here is a diagram illustrating the linear relief of the state of São Paulo:
10 Figure
Figure 4 from Google Maps
3: taken Very hard to build Coastline is here
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railways or highways
Figure 4: Brainly. "Redirect Notice". Google.Com, 2019, https://www.google.com/url?
sa=i&source=images&cd=&ved=2ahUKEwiRgODWq7rmAhX0JLkGHfDfBmcQjRx6BAgBEAQ&url=https%3A%2F
%2Fbrainly.com.br%2Ftarefa%2F12226171&psig=AOvVaw3lAug20bBnLi2GxgIg9cjU&ust=1576591603359697.
Accessed 16 Dec 2019.
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The Serra da Mantiqueira separates the city of São Paulo from the interior of the state,
where sugarcane is grown and refined into ethanol. The Serra da Mantiqueira can go up to
1500m, 750m above the city of São Paulo. As stated, earlier freight trains cannot climb more
500m over a horizontal distance of 50km, and therefore a 75-kilometre track would need to be
The Serra consists of many small hills, presenting another disadvantage to freight trains.
For freight trains to make turns, a minimal curvature radius of 100 meters is needed.
Considering higher speeds, a radius of 1 km for a speed of 150 km/hr and 4 km for a speed of
300 km/hr are needed. This high relief makes it very difficult to build and operate railways. The
end result is that only corporations with a lot of disposable funds can afford to transport the
production of ethanol in São Paulo. This means that there isn’t a lot of competition in the
Production
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As stated in the introduction the likelihood of ethanol becoming a major energy supplier
to the state of São Paulo depends on its efficiency. When discussing efficiency, it is important to
understand that energy efficiency is not the only relevant factor, but production efficiency, cost
efficiency and other efficiency metrics are also relevant. Its efficiency depends on the manner it
is produced. There are many factors that affect the production of ethanol, including the amount
of land required and the susceptibility of sugarcane to the weather. In the case of ethanol in
São Paulo, the main issues are the weather and the properties of sugarcane (price and
biological). One thing that isn’t scarce in the state of SP is land, and therefore, it isn’t one of the
Ethanol can be made from any type of plant, even animal fat; however, in Brazil, ethanol
is mainly made from sugarcane. Sugarcane used to be the most efficient biofuel until American
farmers started genetically modifying corn. Corn has become the main component of ethanol
produced in the US. Sugarcane, on the other hand, has a very complex DNA structure, meaning
that it is currently impossible to genetically modify its DNA. Furthermore, Brazilian ethanol
producers don’t have access to the same amount of funds and technology that American
producers have; therefore, there isn’t much research being carried out to modify sugarcane’s
DNA.
The advantages that corn has over sugarcane also include that corn isn’t susceptible to
seasonal changes. Sugarcane cannot be produced in the rainy season 12; therefore, many
Brazilian companies import corn from the US to produce ethanol during this time of year.
Brazil’s long history of protectionism and high trade barriers worsen the situation, as producers
12
"Sugarcane". Sugarcanecrops.Com, 2020, http://www.sugarcanecrops.com/climate/. Accessed 26 Jan 2020.
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have to pay incredibly high import taxes on corn. Ethanol producers in São Paulo spend much of
their profit (earned during the dry season) in corn imports from the US to continue production
One way the Brazilian ethanol industry tries to equilibrate their losses during the wet
season is by selling sugarcane for the production of sugar. However, sugar prices have been on
a general decline. Scientists, doctors and medical researchers around the world have been
increasingly criticizing sugar as an addictive and unhealthy substance. The criticism has been so
significant that governments have started to tax sugar in order reduce its consumption and
schools have started to remove sugar from daily meals 13. This is a major problem for the
Brazilian ethanol industry as it relies on the sale of sugarcane to sugar producers in order to
help finance and maintain its operations during the wet season. If sugar prices continue to
decrease, then the ethanol industry in Brazil will find it very difficult to sustain itself.
Demand
A very important factor in the development of an energy source is its level of support by
government, businesses and people. For instance, recently, with the rise of concerns over
climate change and public favour towards renewable energy sources, governments have begun
to invest in renewable energy. According to the Kuznets curve, as nations get richer, they
become more worried about the environment; however, people in LEDCs, theoretically,
prioritise economic growth and development over the environment. In 2015 Brazil suffered a
13
Brown, J. (2019). Is sugar really bad for you?. [online] Bbc.com. Available at:
http://www.bbc.com/future/story/20180918-is-sugar-really-bad-for-you [Accessed 16 Aug. 2019].
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huge recession and in 2018 Brazil’s GDP per capita was US$8,920.80 14. Therefore, if the Kuznets
curve is correct Brazil’s population shouldn’t be that concerned over the environment, and
Bio fu els
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
energy supply; however, very few agreed that energy security should be a main priority of the
government. There are two reasons for this seemingly contradictory set of responses: the first
that more Brazilians are generally aware of energy’s role in climate questions from social media
and the internet, and the other being that many subjects were unaware that São Paulo is
mainly supplied by HEP. In fact, many subjects believed that São Paulo was mainly supplied by
fossil fuels, such as oil and coal. Therefore, subjects likely answered with a distorted
14
"GDP Per Capita (Current US$) - Brazil | Data". Data.Worldbank.Org, 2020,
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=BR. Accessed 25 Jan 2020.
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understanding of facts due to having little knowledge on São Paulo’s energy supply and because
of events and concerns happening in richer countries. Moreover, many subjects confused the
purpose of the question regarding the diversification of the energy supply because many
associated the question solely with climate change. My questionnaire showed people are
generally concerned with environmental issues but haven’t really focused on the practical
According to the Kuznets curve, because the US is more developed than Brazil, people
should be more concerned about the environment. This might explain why in the US,
democratic candidates running in the 2020 primary election have put energy security and
climate change as priorities and even some saying climate change is the highest issue in their
agenda15. However, the president of the United States hasn’t expressed concern over the issue.
To many in the US, climate change shouldn’t be a government priority; instead, it should be
addressed by the private sector and citizens. However, it is still a big topic of discussion in
political discourse and debates. Meanwhile, in Brazil, Facebook published some statistics
regarding topics discussed before the 2018 election, and they found that the
environment/climate change was the 8th most discussed topic on Facebook 16. There is no
question that there is an overwhelming majority of people in the US who believe that climate
15
Irfan, Umair, and David Roberts. "How Climate Change Ranks As A Priority For 2020 Democratic Presidential
Contenders". Vox, 2020, https://www.vox.com/energy-and-environment/2019/10/14/20880675/2020-
democratic-debates-climate-change-priorities. Accessed 26 Jan 2020.
16
Valente, Jonas. "Saiba Quais São Os Temas Mais Debatidos Pelos Brasileiros No Facebook". Agência Brasil, 2020,
http://agenciabrasil.ebc.com.br/geral/noticia/2018-07/saiba-quais-sao-os-temas-mais-debatidos-pelos-brasileiros-
no-facebook. Accessed 26 Jan 2020.
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Conclusion and Evaluation
After a thorough investigation, I concluded that the ethanol industry in São Paulo faces
many obstacles. The Serra separating the coastline from the interior of the State presents
highly complex and expensive. This makes it extremely expensive to operate an ethanol
business in SP. Small companies and start-ups face obstacles to entry and competition in the
local ethanol industry, leaving production to very few big corporations. When there are few
firms competing in an industry, prices tend to be high because of the lack of incentives. The
energy source. The wet season in Brazil and in SP curtails sugarcane plantation and production;
sugarcane. Both of these factors contribute to the source’s inefficiency, which makes ethanol
less appealing as a major energy source. If ethanol is to compete with HEP and other energy
sources, it is paramount that the local industry finds ways of making production more efficient.
The Kuznets curve was an accurate predictor of people’s sentiment towards the urgency
for energy security and diversification. It stated that in less developed countries people were
less concerned and aware of the environment and issues about climate change and energy. This
proved to be correct. I found that subjects were generally unaware about the current reliance
on HEP, a renewable and non-pollutant energy source, and the need to supplement HEP with
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other energy sources. Furthermore, there was an overwhelming majority of subjects who didn’t
believe that the government should prioritise energy security and diversification. If ethanol is
going to succeed as an energy source, more people need to be concerned and aware of energy
security and climate change, which isn’t currently the case in Brazil.
The investigation was a success; however, the reliability and sufficiency of some of the
primary information used in the research can be questioned. The interview with Mariangela
Grola from Raizen featured only one perspective of the industry. Therefore, some of the
information might have been too one-sided or subjective, to the detriment of other possible
perspectives regarding the object of this investigation. That said, the majority of statements
and conclusions arrived at this investigation were backed by secondary sources, which provided
The questionnaire used in the investigation also presented some issues. A majority of
the subjects that were questioned has some type of connection with me. Many of them are
people who I know or people who know people who I know. This is slightly problematic for a
questionnaire trying to analyse the opinion of a whole a state of 44 million people. This sample
could not be representative of the general opinion of people in the state regarding climate
change and energy. The questionnaire can further be questioned for the limited number of
subjects questioned - totalling 100 people, which isn’t enough to represent the full scope of the
population of São Paulo. Lastly, subjects questioned only came from the city of São Paulo;
therefore, the questionnaire could have failed to represent the opinions of people living in rural
areas, which might have altered the results. However, the questionnaire was able to question
people from different cultural, financial and social backgrounds that approximated the diversity
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of the state of SP. Therefore, there isn’t a need to fully discard the interpretation and analysis
Appendix
http://www.saopauloglobal.sp.gov.br/frameSetores.aspx?gp=10&IdIdioma=2&IdTrad=76.
b=ad&id=293471&biblioteca=vazio&busca=autoria:%22HUECK,%20K.%22&qFacets=autoria:
20
Agarwal, Prateek. "The Environmental Kuznets Curve | Intelligent Economist". Intelligent
Rodrigue, Jean-Paul. "Rail Transportation And Pipelines". The Geography Of Transport Systems,
sa=i&source=images&cd=&ved=2ahUKEwiRgODWq7rmAhX0JLkGHfDfBmcQjRx6BAgBEAQ&url=
https%3A%2F%2Fbrainly.com.br%2Ftarefa
%2F12226171&psig=AOvVaw3lAug20bBnLi2GxgIg9cjU&ust=1576591603359697. Accessed 16
Dec 2019.
26 Jan 2020.
Brown, J. (2019). Is sugar really bad for you? [online] Bbc.com. Available at:
2019].
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Irfan, Umair, and David Roberts. "How Climate Change Ranks As A Priority For 2020 Democratic
https://www.vox.com/energy-and-environment/2019/10/14/20880675/2020-democratic-
Valente, Jonas. "Saiba Quais São Os Temas Mais Debatidos Pelos Brasileiros No
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