Biofuel Dynamics in Brazil: Ethanol–Gasoline Price Threshold Analysis for Consumer Preference

Biofuel Dynamics in Brazil: Ethanol–Gasoline Price Threshold Analysis for Consumer Preference

The global transition towards environmentally friendly energy sources plays a major role in addressing both energy security and climate change. Brazil is at the forefront of this transition due to its rich natural resources and increasing investments in biofuels. Therefore, this investigation examin...

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Bibliographic Details
Published in:Energies (Basel) Vol. 17; no. 21; p. 5265
Main Authors: Mosquéra, Letícia Rezende, de Oliveira, Matheus Noschang, Martins, Patricia Helena dos Santos, Bispo, Guilherme Dantas, Borges, Raquel Valadares, Serrano, André Luiz Marques, Pompermayer, Fabiano Mezadre, Neumann, Clovis, Gonçalves, Vinícius Pereira, Bork, Carlos Alberto Schuch
Format: Journal Article
Language:English
Published: Basel MDPI AG 01-11-2024
Subjects:
Acetaldehyde
Alcohol
Alcohol, Denatured
Biodiesel fuels
Biomass energy
Brazil
Climatic changes
Combustion
Consumer behavior
Consumer preferences
Emissions
Energy minerals
Ethanol
Fossil fuels
gasoline
Gasoline prices
Marketing research
Natural resources
price ratio
Sugarcane
threshold
Brazil
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Summary:The global transition towards environmentally friendly energy sources plays a major role in addressing both energy security and climate change. Brazil is at the forefront of this transition due to its rich natural resources and increasing investments in biofuels. Therefore, this investigation examines the consumption patterns and interactions between ethanol, primarily sourced from sugarcane, and gasoline within Brazil’s energy framework. Ethanol’s renewability, reduced environmental impact, and superior combustion characteristics position it as a feasible substitute for traditional fossil fuels. Nonetheless, obstacles like competition for land use and inadequate distribution infrastructure impede its widespread acceptance. This study explores the economic interaction between ethanol and gasoline, focusing on pricing dynamics and regional influences. Using consumer preferences and the accessibility of ethanol, this research identifies a range of price ratios within which consumer preferences shift from gasoline to ethanol in various Brazilian regions. The study also classifies Brazilian states into three distinct ranges based on the ethanol-to-gasoline price ratio in 2023 for a granular analysis of the economic dynamics influencing fuel choice. The research identifies states with competitive and dominant ethanol markets by examining the interplay between ethanol market share, fuel prices, and the adoption of flex-fuel vehicles (FFVs) in the country. Lastly, the findings support the importance of regional economic conditions and the influence of price ratios on consumer behavior, highlighting that ethanol’s market share does not always correlate with favorable pricing.
ISSN:1996-1073
1996-1073
DOI:10.3390/en17215265