Opinion: Bioeconomy Gains Ground in Brazilian Agribusiness

RIO DE JANEIRO, BRAZIL – Several agendas that were slowly reaching Brazilian agribusiness will be virtually mandatory in this post-pandemic world: certification, traceability, e-commerce food sales, bio-economy, health, and sustainability. In a way, the agendas mentioned were more present in some sectors, in others less so.

According to the UN, by 2050 the world population will be close to ten billion people. And this will increase the pressure on agriculture and natural resources.

The transformation of the current economic development model – based both on the use of fossil sources (oil, gas, and coal) and on the degradation of the environment – is one of the main global challenges.

Bioeconomy offers a solution to this challenge and creates a new development paradigm. Its concept is broad: an economic activity that combines sectors that produce and use biological resources.

The need for this agenda is based on two pillars: pressure from society, particularly from the most attentive consumers, who turn trends into facts, and the very depletion of non-renewable resources.

The sector has the potential to attract US$400 million (R$2 billion) to Brazil in investments over the next 20 years and generate more than 200,000 jobs, according to the Brazilian Bioinnovation Association.

According to data from the Organization for Economic Cooperation and Development (OECD), bioeconomy generates approximately €2 trillion and 22 million jobs in the global market.

The planted forest segment in Brazil is fully linked to the bioeconomy and will take the lead in Brazil.

“The sector has its raw material (wood) used in the production of renewable, recyclable and often biodegradable products,” says Patricia Machado, bioeconomy coordinator at IBA – Brazilian Tree Industry.

And there is a plethora of research and products under development: resins, oils, bio-oils, nanofiber, nanocellulose, and nanocrystals that can be used in the food industry, automotive, cosmetics, medicines and textile products.

Nanocrystals, for instance, have a potential for application in sensors in the oil and gas industry, cosmetics, paints, and the electronics industry.

Suzano, a reference in the planted forest sector, projects the future with an eye on five main platforms, in addition to the products in the current portfolio (paper and pulp), according to Fernando Bertolucci, the company’s director of innovation: bio-oil, lignin (resins), nanocelluloses, biocomposites (a substitute for current plastics), and soluble cellulose.

Looking at the textile industry today, some of the figures are surprising: US$500 billion/year in lost revenue due to underutilization of clothing and lack of recycling and responsibility for eight to ten percent of greenhouse gas emissions.

But by 2023, according to the United Nations Alliance for Sustainable Fashion, 7.5 percent of textile production will be made from wood fibers.

Finnish startup Spinnova, which has Suzano as a partner, holds the technology to convert nanocellulose into textile yarns, a process that saves 90 percent of water and 90 percent of chemicals used in today’s traditional textile industry. “It is a revolution”, celebrates Bertolucci.

In two years, Spinnova’s first pre-commercial industrial plant is expected to go into operation – and in five years, the product should be fully commercial.

The consolidation of the bioeconomy should be celebrated, but we should not forget the life of the ethanol industry, the first Brazilian experiment in bioeconomy, which since its inception in the 1970s seems to be the industry of the future.

However, it moves in fits and starts, never fully establishing itself in Brazil, despite its gigantic potential. But some factors explain the successive crises of the sugar-alcohol sector (ethanol, sugar, and energy).

The direct relationship between the price of ethanol and the price of oil is a tremendous challenge. At the end of the day, the client will choose the cheapest product at the pump. Every time oil has dropped sharply over these 40/45 years, alcohol has been left with negative margins.

Whenever the federal government decides to adopt policies and artificially secure the price of gasoline, it generates a break in the sector. And this has been the case for the past ten years: more than 80 sugar mills have closed and 70 have filed for judicial reorganization.

Another challenge in the past decade was the excess supply of sugar in the international market.

RenovaBio (a policy that creates decarbonization credits), approved by the National Congress, may be the sector’s lifeline. The first steps have already been taken in the market.

The bioeconomy’s product portfolio has grown considerably. Far beyond ethanol and sugar. There are over 3,000 products developed or under development.

For all these reasons, the sector is gaining ground in Brazilian agribusiness. And it has everything to firmly establish itself alongside soy and animal protein, our national champions.