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How did COVID-19 affect green-fuel supply chain? - A performance analysis of Brazilian ethanol sector

Author

Listed:
  • Nocera Alves Junior, Paulo
  • Costa Melo, Isotilia
  • de Moraes Santos, Rodrigo
  • da Rocha, Fernando Vinícius
  • Caixeta-Filho, José Vicente

Abstract

The COVID-19 pandemic affected many supply chains worldwide, including the Brazilian green-fuel ethanol supply chain. Our analysis considered sustainability variables (social, environmental, and economic) to investigate the pandemic's effects on the ethanol industries of 15 ethanol producing Brazilian states, comparing data from 2020 to 2019 and applying a novel Data Envelopment Analysis (DEA): the Double Frontier Slack-Based Measure Malmquist Productivity Index (DF-SBM MPI). The findings show that all states suffered negative impacts from the pandemic and some incurred a risk of collapsing it. The least negatively impacted states were São Paulo and Mato Grosso. São Paulo's ethanol sector is a benchmark for income derived from trade in carbon-credits by RenovaBio certified mills, while Mato Grosso's sector is able to take advantage of the largest spread between ethanol and gasoline prices, certainly a competitive advantage for ethanol producers. We recommend the implementation of public policies to support, mainly, the most affected states by assisting their mills to become environmentally certified participants to take advantage of income opportunities available in the carbon-credit trading market. We recommend, among other actions, a temporary ethanol sales tax reduction, an extension of debt repayment schedules, and stimulating an increase in the fleet of flex-fuel vehicles.

Suggested Citation

  • Nocera Alves Junior, Paulo & Costa Melo, Isotilia & de Moraes Santos, Rodrigo & da Rocha, Fernando Vinícius & Caixeta-Filho, José Vicente, 2022. "How did COVID-19 affect green-fuel supply chain? - A performance analysis of Brazilian ethanol sector," Research in Transportation Economics, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:retrec:v:93:y:2022:i:c:s0739885921001098
    DOI: 10.1016/j.retrec.2021.101137
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    More about this item

    Keywords

    COVID-19 pandemic; Brazilian green-fuel; Ethanol supply chain; Data envelopment analysis (DEA); Double frontier slack-based measure Malmquist productivity index (DF-SBM MPI); RenovaBio; Social isolation; Sugarcane;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

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