Brazil’s sugarcane embitters the EU-Mercosur trade talks

Abstract

The Brazilian government’s decision to open the Amazon biome to sugarcane expansion reignited EU concerns regarding the sustainability of Brazil’s sugar sector, hindering the ratification of the EU-Mercosur trade agreement. Meanwhile, in the EU, certain conventional biofuels face stricter controls, whilst uncertainty surrounding the commercialisation of more sustainable advanced-biofuels renders bioethanol as a short- to medium-term fix. This paper examines Brazil’s land-use changes and associated greenhouse gas emissions arising from an EU driven ethanol import policy and projections for other 13 biocommodities. Results suggest that Brazil’s sugarcane could satisfy growing ethanol demand and comply with EU environmental criteria, since almost all sugarcane expansion is expected to occur on long-established pasturelands in the South and Midwest. However, expansion of sugarcane is also driven by competition for viable lands with other relevant commodities, mainly soy and beef. As a result, deforestation trends in the Amazon and Cerrado biomes linked to soy and beef production could jeopardize Brazil’s contribution to the Paris agreement with an additional 1 ± 0.3 billion CO2eq tonnes above its First NDC target by 2030. Trade talks with a narrow focus on a single commodity could thus risk unsustainable outcomes, calling for systemic sustainability benchmarks, should the deal be ratified.