Integrated production of sugarcane ethanol and soybean biodiesel: Environmental and economic implications of fossil diesel displacement

• Sugarcane sector is responsible for around 4% of the diesel consumption in Brazil.
• Soybean biodiesel can reduce the fossil diesel demand in the sugarcane sector.
• The local use of biodiesel could reduce logistic problems and environmental burdens.
• The sugarcane–soybean integration is likely to improve ethanol life cycle performance.
• Fiscal incentives could reduce the economic uncertainties of the integration.

The sugarcane industry in Brazil has been considered promising for the production of advanced fuels and bio-based products. However, the sugarcane crop requires high volumes of fossil fuel for cultivation and transport. The use of biodiesel as a diesel substitute could reduce the environmental burdens associated with this high consumption. This work performed a stochastic evaluation of the environmental and economic implications of the integrated production of sugarcane bioethanol and soybean biodiesel, in comparison with the traditional sugarcane-to-ethanol process. The analysis was focused on the states of Goiás, Mato Grosso and São Paulo, where this integration would be particularly attractive. The environmental aspects addressed were the fossil energy use and the GHG emissions in a cradle-to-gate approach. The economic analysis comprised the evaluation of the net present value of an incremental cash flow generated by the soybean production and by the adjacent plants of oil extraction and biodiesel. Results indicate that the integrated system is likely to improve the ethanol environmental performance, especially with regard to the fossil energy use. The integration is economically feasible but highly uncertain; however, it could be significantly improved through fiscal incentives to biodiesel producers, founded on the reduction of fossil energy use and on improvements in logistics. In addition, the proposed model may also assist in the design of other integrated systems applied to the sugarcane sector in Brazil.