Is it possible to avoid bad impacts by using good fuel ethanol?

Preface Much of the global production of biofuels is considered to be non-sustainable. Brazilian sugarcane ethanol, on the other hand, is normally judged to be “good”. Swedes are anxious only to use fuel ethanol with the best climate characteristics in a life-cycle perspective, and the bulk of ethanol used in Sweden comes from Brazil. The Swedish Environmental Protection Agency has identified some crucial issues which often are left out from discussions. These might be of extra importance for the Swedish ethanol use: - Might Swedish demand for good ethanol indirectly raise the demand for “bad” ethanol, such as US maize ethanol with fossil energy input? Or is it possible to encourage the production of exclusively “good” ethanol by choosing such (certified) ethanol? This depends on how the international market for fuel ethanol works. - To what extent does increased Swedish, or European, demand encourage the long-term supply of ethanol? What supply elasticities are there in Brazil and globally? If increased European use only means that we take hold of a fixed supply, the climate benefit compared to fossil fuels will not occur. The analyses are further complicated by the fact that there might be land-use competition between fuel, feedstuffs and food. When available land becomes more limited, increased production might necessitate breaking new soil, which could lead to emissions of climate-changing gases elsewhere. Consequently it is not only the fuel market itself that needs to be analysed. The Swedish Environmental Protection Agency asked the Chalmers University of Technology in Gothenburg, Sweden to study these issues in a comprehensive context. Chalmers jointly performed the study with researchers in Sao Paulo, Brazil. Authors are Göran Berndes and David Bryngelsson at Chalmers and Gerd Sparovek at University of Sao Paulo/ESALQ. The authors alone are responsible for the contents of the report, which should not be regarded as necessarily reflecting the views of the Swedish Environmental Protection Agency. The contact at the Swedish EPA was Mats Björsell.