FIPE explains low impact of biodiesel on inflation

President of APROBIO and economists of the Foundation show the impacts of biofuel on economy at Conference BiodieselBR

The impact of biodiesel production on the index of Brazilian inflation does not exceed 0.037 percentage (p.p.), when it is compared with the price of mineral diesel produced by Petrobras. When it is compared to the average price of the petroleum products imported by the company, the difference is even lower: 0.034 p.p.

The conclusion is of the Foundation Institute of Economic Researches (FIPE) study, of São Paulo University (USP), "Socioeconomic Impacts of Biodiesel Impacts in Brazil", presented yesterday (10/1) by the chief executive officer of BSBIOS and president of the Association of Biodiesel Producers of Brazil (APROBIO), Erasmo Battistella, at Conference BiodieselBR 2012, in São Paulo.

The work approaches aspects like the impact on the trade balance of the country with economy in diesel import, the volume of resources aggregated to Gross Domestic Product (GDP) of the country, job generation in the productive chain, the reduction of pollutant gases resulting from the use of biofuel, among other issues. The numbers of the inflating impact apply for the current mixture of biodiesel in diesel, that is, 5%. FIPE projected the same impact with the increase of the mixture to 7%, when it would be 0.053%; 10% (0.075%); and 20%, when the contribution of biofuel would not exceed 0.161%.

At the same mixture projection, with 7% of biodiesel in fossil diesel, the number of jobs generated may reach 132.642, aggregating R$ 13.4 billion per year to the GDP. With 10% of addition, the jobs must be 204.615 and R$ 20,7 billion wealth generated yearly. And, finally, with 20% of mixture, the scenario would be 459.660 job stations, with R$ 49,1 billion in the yearly GDP.

The president of APROBIO said that he expects that the study help to deconstruct the argument that biodiesel feeds inflation and compromises the goals set by the economic area of the government. "I believe that now we have, I mean, the country has a more accurate photography of the benefits of biodiesel".

The survey has already been shown last week by economists Joaquim Guilhoto and Marcelo Cunha, of FIPE, a team of technicians of the federal government in Brasília. Since the end of April, this inter-ministerial group concluded the proposal of the regulatory mark to the sector, predicting the steps of this market for the next years. Up until now, the report has not been issued to the National Congress for voting.

FIPE applied the methodology of theory input-product in the study, calculating costs, taxes and value aggregated of the productive chain to go from one end to another. According to Cunha, in the calculation of the inflation generated, the methodology applied compared the cost of production and average margin of biodiesel profit in comparison with the mean price of the product he replaces or complements, as it is the case of the imported and national fossil diesel. "Then, we have inflation without the presence of biodiesel in the energetic matrix of the country and the real, verified with the current mixture of 5% of biofuel with mineral diesel (B5, in technical terms)", said Cunha. Last year, the Extended Consumer Price Index (IPCA), measured by the Brazilian Institute of Geography and Statistics (IBGE) was 6.503%. Without biodiesel in the chain of fuels, it would be 6.467%. In the alternative scenario of the study, where FIPE simulated how the inflation would be in the Brazilian economy if the price of the national diesel were equal to the price of the imported diesel and compared the price of biodiesel with the imported diesel, verified that the inflation of 2011 would be 8.297% and without the green fuel it would be 8.263%. The history of the inflationary impact goes from 2008, when the presence of biodiesel in the mixture with diesel began to increase (2.43%) last year, when it was already 5% since 2010.

According to data from the Ministry of Mines and Energy of IBGE, used by FIPE in the survey, the need for diesel in the Brazilian market is 50 billion liters per year. From 15% to 20% of this volume was imported, until Petrobras announce it would double external purchases of gas and diesel. The study shows that biodiesel production generated, in four years (2008-2011), an increment of R$ 12 billion in the GDP and 86.112 jobs from family agriculture, which provides raw material to the industry, to the distribution of biofuel in the productive chain.

Last year only, according to the Ministry of Rural Development, more than 104 thousand families of small farmers receive around R$ 1,4 billion with the supply of raw material for biodiesel processing. It is the largest program of income transference to the man of the field, superior in 2011 to the budget directed to the agrarian reform. Biodiesel production, according to the work of FIPE, saved, in the same period, 2008 to 2011, R$ 11,5 billion in diesel import in the trade balance of payments and generated R$ 14,1 billion in the production of soybean meal, another important item on the agenda of Brazilian exports.

In the same years, 2008 to 2011, about 11,8 million ton of carbon dioxide were not released into the atmosphere because of the use of biodiesel together with fossil diesel.