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

• Published in: Research in transportation economics Vol. 93; p. 101137
• Main Authors: Nocera Alves Junior, Paulo, Costa Melo, Isotilia, de Moraes Santos, Rodrigo, da Rocha, Fernando Vinícius, Caixeta-Filho, José Vicente
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01-06-2022
• Subjects: Brazilian green-fuel; COVID-19 pandemic; Data envelopment analysis (DEA); Double frontier slack-based measure Malmquist productivity index (DF-SBM MPI); Ethanol supply chain; RenovaBio; Social isolation; Sugarcane; Brazilian green-fuel; C02; L91; Ethanol supply chain; Double frontier slack-based measure Malmquist productivity index (DF-SBM MPI); RenovaBio; Q42; O13; COVID-19 pandemic; Social isolation; Data envelopment analysis (DEA); Sugarcane; C61
• ISSN: 0739-8859; 1875-7979
• DOI: 10.1016/j.retrec.2021.101137

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.
•DEA applied to measure the impact of COVID-19 on Brazilian ethanol supply chain.•Double Frontier SBM Malmquist Index to evaluate the performance evolution.•RenovaBio and impact of social isolation on ethanol production, sales, and prices.•How the different Brazilian ethanol-producing states were affected by COVID-19.•Negative effects in efficiency changes and frontier shifts due to pandemics.