Competing Decarbonization Pathways in Heavy-Duty Long-Distance Transport: A Comparative Total Cost of Ownership and Value Chain Analysis of Ethanol and Biomethane in Brazil

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Résumé:

The decarbonization of the transport sector has become a central pillar of global climate policy and industrial transformation. Within the automotive industry, electrification has rapidly emerged as a dominant technological pathway, supported by stricter emissions regulations, advances in battery technologies and large-scale industrial policies promoting electric vehicle deployment (IEA, 2025). These transformations are part of broader structural changes in the global automotive industry, whose technological and productive trajectories have historically evolved through successive shifts in production models and industrial organization (BOYER; FREYSSENET, 2002; FREYSSENET, 2009).
At the same time, the expansion of electrification is reshaping the structure of global automotive value chains. The transition toward battery-based mobility concentrates strategic technological capabilities in battery manufacturing, electrochemical component production and critical mineral processing. As a result, the governance and geography of automotive production networks are being reconfigured, shifting value capture toward upstream technological segments associated with energy storage and advanced materials (GEREFFI; HUMPHREY; STURGEON, 2005; STURGEON; VAN BIESEBROECK; GEREFFI, 2008).
These transformations raise important questions regarding technological sovereignty and industrial positioning in emerging economies. While electrification reduces dependence on fossil fuel imports, it simultaneously increases reliance on supply chains for lithium-ion batteries and critical minerals such as lithium, nickel and cobalt. These supply chains remain highly geographically concentrated, with China playing a dominant role in battery manufacturing capacity and mineral refining (KRZYWDZINSKI et al., 2025). The rapid rise of the Chinese automotive industry and its integration into global production networks has significantly altered competitive dynamics in the sector, creating new forms of technological dependence and strategic vulnerabilities (JETIN, 2025; HUMPHREY; MEMEDOVIC, 2003).
These dynamics are particularly relevant in heavy-duty transport, where long-haul freight systems require high energy density, long operational cycles and extensive infrastructure. In large territorial economies dependent on long-distance logistics, the feasibility of full electrification remains uncertain. At the same time, alternative energy resources may enable distinct decarbonization pathways in some emerging economies.
This paper investigates whether biofuel-based propulsion systems—specifically ethanol and biomethane—can represent a viable decarbonization pathway for heavy-duty long-distance transport while contributing to technological sovereignty in bioenergy-endowed economies. Using Brazil as an empirical case, the research examines how competing propulsion technologies reshape cost structures, value chain configurations and geopolitical exposure within the transport-energy nexus.
The research question guiding this study is:
How do alternative decarbonization technologies in heavy-duty transport reconfigure cost structures and value capture along transport-energy value chains, and to what extent can biofuel-based propulsion systems constitute a competitive and strategically autonomous pathway for emerging economies endowed with bioenergy resources?
To address this question, the paper combines a Global Value Chain (GVC) perspective with a comparative techno-economic assessment. The GVC framework analyzes decarbonization technologies not only as engineering solutions but also as institutional configurations that redistribute value capture across industrial systems. Changes in propulsion architectures alter the relative importance of upstream resource extraction, component manufacturing, fuel supply infrastructures and downstream logistics operations within global production networks (COE; YEUNG, 2015).
Empirically, the study focuses on Brazil, which presents a distinctive combination of structural characteristics relevant to this debate. The country possesses a consolidated bioenergy sector based on sugarcane ethanol and second-crop corn ethanol, significant potential for biomethane production derived from agricultural residues and urban waste streams, and a logistics system strongly dependent on heavy-duty road freight.
The empirical analysis compares propulsion technologies across three major transport modes: long-haul road freight, maritime cabotage and freight rail. Within each modal system, different technological configurations are assessed relative to the conventional diesel baseline, including battery-electric propulsion systems, ethanol-based compression ignition engines (ED95), biomethane-powered vehicles and alternative marine fuels derived from biomethane.
The comparison is conducted through a Total Cost of Ownership (TCO) modelling framework integrating capital expenditures, energy operating costs, maintenance costs and infrastructure requirements. Rather than treating TCO solely as a financial indicator, the analysis highlights how technological choices reshape cost structures and redistribute value capture across transport-energy value chains.
The modelling results draw on a comparative assessment developed in the study Sustainable Expansion of Ethanol and Biomethane Production and Consumption, conducted by Agroicone, Barassa & Cruz Consulting and Universidade Estadual de Campinas (UNICAMP) for the Instituto Clima e Sociedade (iCS) (CRUZ et al., 2026).
The techno-economic modelling results indicate that competing decarbonization pathways generate markedly different cost structures across technologies and transport modes.
In long-haul road freight, diesel remains the economic baseline with an estimated Total Cost of Ownership (TCO) of approximately US$0.83/km. Biodiesel blends (B15–B20) present marginally higher costs, ranging from US$0.84–0.86/km. Ethanol-based propulsion systems using ED95 engines show estimated costs between US$0.91–0.96/km, while biomethane-powered trucks display costs between US$0.83–0.92/km, depending largely on fuel supply conditions and infrastructure requirements. Battery-electric trucks present the lowest energy operating costs but higher capital intensity, with estimated TCO ranging from US$0.73–0.87/km, depending strongly on infrastructure investment and vehicle utilization rates.
In maritime cabotage, Marine Gas Oil (MGO) remains the baseline with an estimated TCO of approximately US$0.15/ton·km. Alternative fuels currently display higher costs, including liquefied biomethane (Bio-LNG), ethanol, methanol and ammonia pathways, reflecting both fuel production costs and the need for specialized bunkering infrastructure.
In freight rail systems, diesel-electric locomotives remain the baseline technology with estimated costs of approximately US$0.10/ton·km. Biodiesel blends introduce marginal increases, while biomethane in dual-fuel configurations presents a wider cost range but may approach cost parity with diesel in corridor-based operations where centralized fueling infrastructure can be deployed.
Taken together, the results indicate that electrification and biofuel-based propulsion systems correspond to structurally distinct decarbonization regimes. Electrification shifts cost structures toward capital-intensive assets such as batteries and charging infrastructure, concentrating value within global battery supply networks. In contrast, ethanol and biomethane pathways maintain fuel-dominated cost structures closer to those of conventional combustion technologies, reinforcing linkages with domestic agricultural systems, waste-to-energy infrastructures and regional fuel production chains.
These findings suggest that biofuel-based propulsion systems may represent a complementary and potentially strategic decarbonization pathway for emerging economies endowed with bioenergy resources, particularly in heavy-duty transport segments where electrification faces operational and infrastructure constraints.

Keywords: Heavy-duty transport; Decarbonization pathways; Biofuels; Electrification; Global value chains
Acknowledgements: This article is based on research developed within the project “Sustainable Expansion of Ethanol and Biomethane Production and Consumption.” The authors gratefully acknowledge the support of the Instituto Clima e Sociedade (iCS).
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