The Brazilian government has proposed a scheme whereby it would offer an environmental seal of approval for its biofuel exports. While this is a response to possible punitive measures against current production methods, the certification scheme provides an innovative approach to the biofuels problem, and offers fuel retailers a means of differentiating themselves from their competitors.

In order to counter the dwindling support for biofuels, Brazil, the world’s largest exporter of the alternative fuel, has proposed the creation of an environmental seal of approval for its ethanol exports. The seal would provide importers with a guarantee that the biofuels have been produced in an ethical manner while following the strictest environmental regulations.
The government scheme is a response to criticism of biofuels, which has been mounting over the last few months. Indeed, a number of European countries have voiced concerns that rather than being an environmentally friendly policy, the EU’s target to raise the use of biofuels to account for 10% of road fuel use by 2020 could actually damage the environment.

The EU also seems uncertain of the long-term effects of the fuel, and has proposed that only biofuels that cut greenhouse gasses by at least 35% relative to fossil fuels should be sanctioned, thereby potentially outlawing certain corn-based ethanols.

Nevertheless, even if the EU or national governments decide against clamping down on current biofuels production methods, the Brazilian government’s seal scheme is likely to be popular. Despite consumer demand for biofuels, users have shown concerns about the potential damage to the environment caused by the fuel. As such, certified biofuels could be promoted in fuel retailers’ marketing campaigns.

Ultimately, the Brazilian government’s plans to provide an environmental guarantee on biofuel exports offers an innovative approach to concerns raised at both national and EU levels that biofuels are doing more damage than good. Furthermore, even if these concerns are not acted upon, selling ‘ethical’ biofuels provides fuel retailers with a means of differentiating themselves from their competitors.

Related Research: The Biofuels Market Outlook: Market drivers, growth opportunities and regulatory change