This index measures the proportion represented by a fixed number of the largest companies of an industry when compared to the total of such an industry. Its cal­culation is as follows:

k

Cr (k) = Pi (1)

i=1

where к is the number of companies that are part of the calculation and Pi = participation of the ith company in the market. The index is easy to interpret, since it varies from 0 (zero) to 100. The closer it gets to 100, the higher the industry concentration is, i. e., if a small number of companies responsible for a big pro­portion of production, sales, or employment inside the industry, that means that the concentration will be higher. In this research, we will use the measure Cr(4), where the four largest companies will be considered in this analysis.

In this context, Bain and Qualls (1968) analyzes the market concentration clas­sifying markets into: Cr(4) equals or higher than 75 %: highly concentrated oli­gopoly; Cr(4) between 50 and 74 %: moderately concentrated oligopoly; Cr(4) between 25 and 49 %: weakly concentrated oligopoly; and Cr(4) lower than 25 %: atomistic.

As introduced above, a strong argument in favour of biofuels is that they emit less GHGs than fossil fuels when combusted (i. e. without taking into account emis­sions created during fuel extraction, growing, production and/or refining) and therefore mitigate a number of environmental issues associated with conventional fuels. Yet, it should be noted that all biofuels may not be equally environmentally friendly since the nature of the gases emitted depends on the specific composition of the biofuel in question, together with engine specifications. This section will provide a brief overview of bioethanol and biodiesel contents, the gases that they release and their respective health impacts.

Bioethanol contains oxygen, which helps create a more complete combustion of the fuel itself. An E10 blend of bioethanol (10 % bioethanol), for example, reduces the level of carbon monoxide produced by 30 % and particulate materials by 50 % in comparison with conventional gasoline (Whitten 2004). Benzene, which accounts for 70 % of toxic emissions from conventional gasoline, is also reduced by 25 % when E10 is combusted (EPA 2002). Furthermore, bioethanol contains no sulphur. As a result, there is no potential threat of sulphur emissions, which can contribute to the formation of acid rain. However, if the blended fuel contains a low percentage of bioethanol (e. g. less than 10 %), some low-level ozone could be emitted, though not to the extent of 100 % conventional gasoline (Natural Resources Defence Council 2006). In contrast to high-level ozone, which protects people from ultraviolet rays, low-level ozone can adversely affect the human respiratory system, together with plant life. By way of contrast, a higher percentage of conventional fuel in bioetha­nol blends produces carbon monoxide, unburned hydrocarbons, benzene and nitrous oxides (Demirbas 2009). When these combine with moisture and suspended air particulates, smog is formed. High-bioethanol-content fuels, such as E85, may also have negative effects on human health. They release aldehydes, such as acetalde­hyde, which causes nasal and eye irritation, and even breathing problems if the con­centration is high (McCarthy and Galvin 2006). Table 3 below presents a synopsis of the percentage variation of emissions from two blends of bioethanol in comparison with conventional gasoline.

Like bioethanol, the oxygen content in biodiesel is higher (usually 10-12 %) than for petroleum diesel. This reduces the emission of smog-forming particulate materi­als such as carbon monoxide by 11 % and unburned hydrocarbons by 21 % (EPA 2002). Though biodiesel may contain traces of sulphur, the risk of sulphur oxides and sulphate emissions is minimal. Some blends of biodiesel such as B20, however, could emit 2 % more nitrous oxide than conventional diesel (EPA 2002). This affects

the quality of air since nitrous oxide undergoes a chemical reaction in the presence of sunlight and causes smog formation. Table 4 above summarizes the findings of the US Environmental Protection Agency on the exhaust emissions from two vari­ants of biodiesel, viz. B100 and B20, compared to conventional diesel.

As mentioned earlier, emissions also vary by engine type. Vehicles with conven­tional catalytic converters are capable of minimizing the emission of aldehydes from bioethanol blends of up to 23 % ethanol. These engines can be easily adapted for using high-bioethanol-content fuels such as E85 (Greene 2004). More advanced engines were found to reduce formaldehyde emission by 85 % and acet­aldehyde by approximately 58 % (MECA 1999). With regard to biodiesel, Kousoulidou et al. (2008) concluded, from studies conducted in the USA, that pre — 1998 diesel engines emit less nitrous oxide than 2004 diesel engines equipped with exhaust gas recirculation (EGR) and that the percentage of emissions increases with the share of biodiesel in the fuel blend. 2Of particular concern is the high per­centage of nitrogen dioxide (NO2), the most harmful of all nitrous oxides, released when such blends are used in modern (e. g. Euro 4) engines (Kousoulidou et al. 2008). The emission of particulate matter is usually low for all types of engines, except for those which emit a high soluble fraction and consume more lube oil.3

From the above discussion, it appears that the combustion of biofuels, in gen­eral, affects the environment to a lesser extent than fossil fuels. However, tail­pipe emissions are only the end result and therefore do not really explain the

2 These assertions are based on the findings of EPA (2002) and Sze et al. (2007).

3 Refer to Dwivedi and Sharma (2013) for further details on emissions from the various varieties of biofuels, together with engine specifications.

net emission or absorption of GHGs throughout the life cycle of biofuels, which includes cultivation of feedstock, the processing of the biomass and, finally, its combustion for end use.

Domestic price of Brazilian ethanol is regulated by the government since the cre­ation of PROALCOOL. For this reason, domestic price is stable along the time (Fig. 4).

In Brazil, the prices of ethanol show relative stability despite the instability of prices in petroleum international market. This fact is due to economic policy in Brazil, especially the price policy, that is regulated by the government.

Aldara da Silva Cesar, Mario Otavio Batalha and Luiz Fernando de O. Paulillo

Abstract The national program for production and use of biodiesel (PNPB) intends to include family farming in this sector. Oil Palm cultivation was deemed as ideal for social inclusion in Brazil’s Northern region, and the social projects linked to this production are pilot projects, with about 185 families. This study, which can be classified as multi-case, uses exploratory bibliographic and documen­tal research techniques as well as interviews with the agents inserted in the chain. The study analyzes the governance structure of the biodiesel production chain in Brazil regarding the social link of palm oil. In light of the transaction cost econom­ics (TCE) theory, this chapter analyzes three key transaction attributes between family farmers and industry, namely frequency, uncertainty, and asset specificity, all classified in this study as high ranking. The institutional environment is decisive for the inclusion of palm oil farmers included by means of formal contracts. However, the biodiesel plants located in Brazil’s Northern region—as well as those planning to begin this business—show trends to verticalize their agricultural activities. Thus, the social fuel seal (SCF) assumes its influence in the operating dynamics of that chain’s social pillar.

Keywords Palm oil • Family farming • Social fuel seal • PNPB • Biodiesel

A. da Silva Cesar (H)

GASA—Grupo de Analise de Sistemas Agroindustriais Departamento de Engenharia de Agronegocios, Universidade Federal Fluminense, Niteroi, Brazil e-mail: aldaracesar@id. uff. br

M. O. Batalha • L. F. de O. Paulillo

GEPAI—Grupo de Estudos e Pesquisas Agroindustriais Departamento de Engenharia de Produfao, Universidade Federal de Sao Carlos, Sao Carlos, Brazil e-mail: dmob@ufscar. br

L. F. de O. Paulillo e-mail: dlfp@ufscar. br

A. Domingos Padula et al. (eds.), Liquid Biofuels: Emergence, Development and Prospects, Lecture Notes in Energy 27, DOI: 10.1007/978-1-4471-6482-1_6, © Springer-Verlag London 2014

1 Introduction

The national program for production and use of biodiesel (PNPB) created a strong domestic demand for biodiesel (Pousa et al. 2007). PNPB’s most important under­taking was the enactment of Law No. 11.097/2005, in which the compulsory addi­tion of biodiesel to petroleum diesel was decreed in 2008 in Brazil (Brazil 2005). Biodiesel was incorporated into the Brazilian energy matrix in 2007 on an optional basis and mandatory in 2008 with the addition of 2 % of biodiesel to petroleum diesel (B2)—this addition is currently set at 5 %. Since then, the sector has rapidly increased in the country.

Brazil produced 2.7 million liters in 2011 and has a twofold capacity for the mandatory requirement. The federal program also established a set of policies to encourage diversification of the energy matrix, promoting the inclusion of family farmers in this sector.

The social fuel seal (SFS) was created to focus on the regional development (Garcez and Vianna 2009), and according to this mechanism, companies must provide conditions (quantity, minimum price, and technical service) via contracts to foster the relationship with small farmers. In contrast, the seal has tributary advantages (tax exemption), allowing access to the ANP Auctions, favoring better financing terms with public banks, plus serving as a positive marketing tool for the companies that have the seal.

The diversification feasibility in the production of raw materials used to manu­facture biodiesel favors Brazilian competitiveness. However, the most widely used raw material for biodiesel production in the country has been soybean. In 2012, soybean oil accounted for 75.24 % of the raw materials used by the plants, while beef tallow and cotton oilseed accounted for 17.19 and 4.53 %, respectively (ANP 2012). However, in Brazil, palm oil for biodiesel production is still very small, accounting for 0.18 % in 2012.

In Brazil, despite its limited participation in the matrix, palm oil was chosen as the ideal oilseed for the north of the country since the beginning of PNPB. Palm oil plantations enable social inclusion due to its high employment rate (one direct job is generated for every 10 ha under oil palm cultivation), with gains such as income generation for farmers, workers’ improved quality of life, inserting man­power in the field, and the expansion of local businesses (Cesar et al. 2013). However, of the 100,371 family farming establishments participating in PNPB in 2011, only 246 are located in the north of the country (0.2 %). Of these, 185 farmers are assisted with palm oil and are heavily subsidized by public actions and partnership with the company that fosters such arrangements (Brazil 2011).

Thus, in 2004, the PNPB institution definitely promoted building a productive structure and an institutional framework for the production of biodiesel in Brazil. It is important to investigate the type of governance structure undertaken by the palm biodiesel supply chain some years after the implementation of PNPB, which is a key issue in order to study the oleaginous supply from family farming, given the importance assumed by the SFS seal in the operating dynamics of this sector. Within this scope, this chapter examines the governance structure of the biodiesel

production chain in Brazil. This work is divided into five sections, including the introduction. The second section presents the methodological procedures. The third section includes some considerations about the theoretical referential. Next, the fourth section provides the research results, which are divided in the description of the fomented arrangements related to oil palm.

Sugary biomass contains sucrose as a sugar source, a disaccharide consisting of glucose and fructose, which are both hexose monosaccharides (C6) (Fig. 2). Sucrose undergoes hydrolysis to release glucose to be converted into 1G ethanol via fermentation using a S. cerevisiae yeast (Oh et al. 2012).

Examples of sucrosic biomass include sugarcane and sweet sorghum, the lat­ter of which has a considerable concentration of free monosaccharide D-glucose when compared with sugarcane (Table 3). Sugarcane has a high content of sucrose which releases glucose after a hydrolysis step, and it is the most relevant feedstock for 1G ethanol production. However, sweet sorghum could be used as a comple­mentary crop during the sugarcane off season.

Analytical data are important for these feedstocks because we can obtain sugars content for bioethanol production. Then, we can monitor the process of conver­sion, their yields, and the product quality. It could be seen in the item 3.1.

The geographic distribution of the production and consumption of ethanol is related to many factors, such as production destinations, government policies, natural resources’ availability, and environmental regulations. Different world regions can be understood as distinct markets with diverse demands and supply possibilities (Jovanovic 1993). The production, consumption, exports, and imports of ethanol in major countries (including the European Union) that is estimated for 2013 and 2020 can be observed in Fig. 2.

Estimates indicate that the USA is clearly the largest producer and consumer of ethanol and it is followed by Brazil. Upon analyzing these main producers, a difference from the perspective of the increase in production by 2020 is observed. According to the estimate, the increase in consumption will be greater than the increase in production in the USA. Therefore, even though the USA is the world’s greatest ethanol producer, it will eventually have a need for ethanol imports. Because the Brazilian capacity of production by 2020 will be higher than the domestic demand, the surplus of ethanol could be redirected to supply the needs of international markets.

The great potential for production in Brazil might be related to the favorable climate conditions and the appropriate areas for agriculture, which are currently abandoned, uncultivated, or used as extensive pasture. Another contributing fac­tor is the improvement in technology in recent years, which has particularly been applied to feedstock.

Brazil plans to expand the area for sugarcane cultivation from approximately 4.4 Mha (2008) to 8 Mha (2017) by occupying the currently extensive area that is devoted to cultivating pasture (IEA 2010). Today, 50 % of the produced sug­arcane is used for biofuel production. Another destination of the produced sugar­cane includes its use as feedstock and to supply the (domestic and international) sugar market. Furthermore, the Brazilian sugar mill sector can sell bioelectricity produced from bagasse (IEA 2011).

Feedstock is the main cost of conventional biofuels, which accounts for 45-70 % of the total production costs. In contrast, for advanced biofuels, the main factor is the capital costs (35-50 %), which is followed by the feedstock cost (25-40 %) (IEA 2009). In the USA, ethanol is mainly produced from corn. In certain areas, sorghum grain, wheat, and barley are also used as feedstock.

Another important producer and consumer of ethanol is the European Union. The EU is a net importer; and in 2013, estimative indicates it exhibit consump­tion that should be 27 % higher than the production. This perspective indicates a similar condition by 2020 (24 % more imports than what should be produced).

Because the land availability is a potential limiting factor for the production, the improvement of the waste and residues that are produced would play an important role in enabling further development of the biofuel sector (IEA 2011).

The fast growth of the Chinese economy and its potential for maintaining this behavior has led to rising demand for energy. In response to this demand, the search for alternative sources of energy has become a priority for the Chinese gov­ernment (Qiu et al. 2010). Oil deficits and an increasing dependence on oil imports have exposed China to risks due to its reliance on the international oil markets, which has motivated the development of ethanol production (Tao et al. 2011).

In 2013, China presented a domestic demand for ethanol that was higher than its production. Although the ethanol production is expected to increase, this situ­ation would remain in future years. In 2003, the trade of bioethanol and a gaso­line blend (with 10 % ethanol that is known as E10) was initiated in China (Qiu et al. 2010). According to the Medium — and Long-Term Development Plan for Renewable Energy, which was issued in 2007, China aims to increase the produc­tion of ethanol from non-food-grain feedstock. The predominant feedstock used was corn, which was followed by wheat, but the government committee incentiv — ized ethanol production from a diversity of feedstocks including cassava, sweet potatoes, sugarcane, and sweet sorghum (Tao et al. 2011). Currently, E10 is used in the transport sector in the five provinces (Heilongjiang, Jilin, Liaoning, Anhui, and Henan) and 27 cities in Jiangsu, Shandong, Hubei and Hebei (Qiu et al. 2010).

Similar to China, India is one of the fastest growing economies of the world. Thus, the energy input is a strategic component of the national economic activity in India. To study the financial and operational aspects of E5, the local govern­ment presented three projects in 2003. In 2008, the national biofuel policy made the use of E5 mandatory, and it set a target of E20 for 2017. Today, the production of ethanol amounts to 549 million gallons (which is mainly produced from sug­arcane), but the domestic demand is greater. However, despite the projected increases in the domestic demand by 2020, the amount of ethanol production is expected to fulfill this demand.

As in other countries, the diversification of energy sources is an important objective of Canada. The ethanol feedstock source was 70 % corn and 30 % wheat in 2007. According to Balat and Balat (2009), the country reported the seri­ous intention of increasing the development of corn-based ethanol. In 2008, the Canadian government amended the Environmental Protection Act to require the use of E5 in all ground transportation fuels, which naturally increased the demand for it. Canadian ethanol production represented 74 % of the domestic demand in 2013. The current projection indicates the maintenance of these levels of produc­tion, and therefore, Canada would remain a net importer in 2020.

In general, the estimates show increase in the production and consumption of eth­anol. National biofuel policies tend to vary according to both the availability of feed­stock for fuel production and national agricultural policies. With the introduction of new government policies in America, Asia and Europe, the total biofuel (mainly eth­anol) demand could grow to 33 billion gallons by 2020 (Demirbas 2007).

Due to this increasing demand, fluctuations in prices can be expected. Figure 3 shows the ethanol prices and the global ethanol fuel production in recent years. From 2006, when production reached more than 10 million gallons, to 2012, an increase of 119 % was observed in the total production. During the same period, ethanol prices increased 60 % worldwide. From 2006 to 2009, the ethanol prices oscillated at a low rate, namely, between $1.60 and $1.80 per gallon. The ethanol price reached its highest cost in 2011 ($3.33 per gallon), and then it declined until 2012. The local price (in US dollars) for ethanol, which is presented in Fig. 3, showed a similar trend during this period.

New technologies offer considerable potential growth over the coming decades. However, traditional biofuels are expected to play a key role in ramping up the production in many developing countries. Thus, the associated technology is cost — effective and less complex than is the case for advanced biofuels.

Agriculture and the science community today are actively pursuing renewable energy production. Many research and implementation efforts involve producing ethanol or other liquid biofuels from nonfood agricultural feedstocks in a cost- efficient manner. Various feedstocks are being considered including crop residues,

M. Wlodarz (*)

Department of Management, Technology and Economics, Center for Energy Policy and Economics, ETH Zurich, 8032 Zurich, Switzerland e-mail: marta. wlodarz@gmail. com; wlodarzm@ethz. ch

B. A. McCarl

Department of Agricultural Economics, Texas A&M University, College Station, TX 77843-2124, USA e-mail: mccarl@tamu. edu

A. Domingos Padula et al. (eds.), Liquid Biofuels: Emergence, Development and Prospects, Lecture Notes in Energy 27, DOI: 10.1007/978-1-4471-6482-1_7, © Springer-Verlag London 2014

energy crops (e. g., switchgrass, miscanthus, hybrid poplar, willow, and others), logging residues, and agriculture/forest processing by-products. At the same time, current market penetration barriers (like car capabilities, service stations, and pipe­lines) pose a significant barrier to further ethanol market expansion (Szulczyk et al. 2010; Wlodarz and McCarl 2013).

The main purpose of this chapter is to report on an economic investigation of current and future prospects for agricultural feedstock-based liquid biofuels expansion developing information on:

• Needed cost reductions in cellulosic biofeedstock-based liquid fuels production to make them competitive.

• The effects of renewable fuel mandates and carbon dioxide credit prices.

• The effect of infrastructure barriers on market penetration.

• Tipping points that stimulate cellulosic ethanol.

• Impact of carbon pricing on bioethanol production.

1 Literature Review

The possibility of second-generation biofuels production from agricultural materials has been explored by many (Tyner 1979; Apland et al. 1982; McCarl and Schneider 2000). Bioethanol from crop residues, wood residues, and energy grasses can pro­vide GHG offsets with potentially lower demand shocks in the food commodity markets. Farrell et al. (2006) found that bioethanol production on the large indus­trial scale will definitely require further development of the lignocellulosic etha­nol production technology. The need for further improvements in the biochemistry of reactions and cheaper enzymes is recognized by many (EPA 2009; Dwivedi et al. 2009; Babcock et al. 2011; Lau and Dale 2009). Wlodarz and McCarl (2013) showed that processing costs need to decrease by at least 25 % to make cellu­losic ethanol production economically viable. Chovau et al. (2013) analyzed the cost of cellulosic ethanol production and they claim that lignocellulosic ethanol will become more economical and environmentally attractive than corn ethanol. Littlewood et al. (2013) indicate production modes utilizing less costly agricultural residues, e. g., sugarcane bagasse (Alonso-Pippo et al. 2013), are preferred from an economic standpoint. Governmental subsidies or carbon emission pricing mecha­nisms (Schneider and McCarl 2003) also increase the viability of lignocellulosic bioethanol production.

There are some studies which investigate the possibility of drop-in liquid fuels such as butanol or methanol (Lee et al. 2008; Green 2011; Qureshi and Blaschek 2000; Ezeji et al. 2007). Drop-in fuels do not have corrosive characteristics so they do not require major infrastructure adjustments. Both service points and distribu­tion networks are appropriate for drop-in fuels dissemination.

The thermochemical conversion route is largely based on existing technologies that are in operation for several decades (IEA 2008). In the past, the focus was on conversion of coal to liquid fuels and chemicals; however, in the recent years, the focus has also been on the conversion of natural gas resources into fuels. The thermochemical route basically involves the production of syngas (synthesis gas), which should be purified before it can go into the Fischer-Tropsch (FT) process to synthesize liquid fuels for application in aviation and marine industries, and chem­icals chiefly synthetic diesel. Syngas (mix of CO and H2 with some CO2, meth­ane, and higher carbon compounds) is produced by a severe heat treatment process of dry lignocellulosic feedstock in a controlled atmosphere, so that gasification is
initiated. The main stages of thermochemical route involve: (1) biomass fuel con­ditioning, (2) gasification process, (3) gas purification, and (4) FT conversion.

The thermochemical route can provide a number of additional co-products in addition to biofuels. These co-products can be exploited as a feedstock for produc­tion of value-added chemicals. The products profile from FT conversion can vary significantly depending on the synthesis temperature. High temperature leads to production of synthetic gasoline and chemicals, whereas low temperature produces waxy products that can be further cracked to make naphtha, kerosene, or diesel fuel (Griffin and Schultz 2012). The advantage of thermochemical route over biochemi­cal route is that the former can essentially convert all organic component of the bio­mass into products. However, the major limitation of thermochemical route is the need of high-temperature gasifier that imparts high cost to the process.

The biofuel industry has experienced remarkable growth over the last decade. Global production has tripled from about 18 billion litres in 2000 to about 60 billion litres in 2008 and has continued to grow after a slight pause in 2007-2008 (Kristoufek et al. 2012; Mandil and Shihab-Eldin 2010). However, production and consump­tion of biofuels worldwide returned to growth in 2010. According to US Energy Information Agency (EIA) data, total world biofuel production increased nearly six­fold over the 2000-2010 period, that is, from about 18 billion litres to about 104 billion litres. Supply is currently dominated by bioethanol, which accounted for approximately 75 % of total biofuel production in 2010 (Mandil and Shihab-Eldin 2010; Moschini et al. 2012). Similar figures are also reported for biofuel demand. Despite the growth in the biofuel industry, global consumption of biofuels in 2012 represented 3 % of total fuel consumption (IFPEN 2012), i. e. 55 million tons oil equivalent, of which 73 % is bioethanol consumption. Global production and con­sumption of biofuels, over the 2000-2011 period, are presented in Fig. 1.

At present, biofuel production and consumption are concentrated in a small number of countries or regions, with the United States, Brazil and the EU being particularly salient. Bioethanol has been the leading biofuel in the United States (from corn) and in Brazil (from sugarcane), whereas biodiesel is the preferred biofuel in Europe (from [1]

bioethanol production (thousand barrels per day) bioethanol consumption (thousand barrels per day) biodiesel production (thousand barrels per day) biodiesel consumption (thousand barrels per day)

Fig. 1 Global biofuels production and consumption (2000-2011) (US EIA 2013)

rapeseed oil) (Moschini et al. 2012). In 2006, the United States surpassed Brazil as the world’s largest bioethanol producer and consumer and, by 2010, was producing 57 % of the world’s bioethanol output. The EU follows as the third major producer (Mandil and Shihab-Eldin 2010; Moschini et al. 2012). By way of contrast, the EU is the largest producer and consumer of biodiesel. Over the period of 2009-2011, the EU accounted for about 60 % of global biodiesel production and about 70 % of global biodiesel consumption. The production and consumption levels in these three regions over the 2009-2011 period are summarized in Tables 1 and 2.

Of particular importance is that the industry is very much reliant on first — generation fuels (explained in Sect. 2 in chapter “Environmental Issues in the Liquid Biofuels Industry”). While these are generally produced from food crops (such as sugar cane, sugar beet or corn in the case of bioethanol, and vegetable oil derived from oleaginous crops in the case of biodiesel), they also have a variety of other commercial applications (such as stock feed in the case of corn, or use in industrial products such as cosmetics and engine lubricants, in the case of vegeta­ble oils). The cost-effectiveness of first-generation fuels is therefore closely tied to the global price of the feedstock used—a price set not only by demand for these feedstocks for energy, but also for other purposes.

HHI is defined by the sum of squares of the participation of each company when compared to the industry’s total size. This index considers all the companies in the industry and is calculated as follows:

N

HHI = £ Pi2 (2)

i=1

where P is the market share of firm i in the market and n is the number of firms. The Herfindahl-Index (H) ranges from 1/N to one, where N is the number of firms in the market. Equivalently, if percents are used as whole numbers, as in 75 instead of 0.75, the index can range from 10,000/n, when companies have an equalitarian participation in the market, up to 10,000 (monopoly). The HHI increases according to the increase of inequality among the companies belong­ing to the industry, thus being a good indicator of the market situation. Do note that the company size is considered by its squared participation (Pi), i. e., smaller companies have a smaller role in this index. Thus, the higher the index, the more concentrated the market is, and, as a consequence, smaller the competition among companies is.

According to Usdoj (1997), the market is not concentrated when the HHI value is under 1,000, it is moderately concentrated between 1,000 and 1,800, and it is highly concentrated when it reaches a value higher than 1,800. This research sought to use the companies’ integrality, where we used secondary data regarding the biodiesel production in m3 from January 2005 to December 2012.