The study highlights that sugar taxation has the potential to meet apparently competing objectives. The reason is that sugar is one of the worst foods to eat from a health perspective while especially sugarcane has great potential for biofuel production.
The starting point is that the EU implements a sugar tax to reduce EU-wide sugar use, both in consumption and production, such as of beverages. Three scenarios are then explored, namely the EU reforesting its existing sugar cropland, the EU switching its sugar beet crops to ethanol production, and the EU exporting its excess sugar production to meet worldwide demand while another main exporter, namely Brazil, switches its sugarcane crops from sugar to ethanol production.
As visualized in the figure, calculations indicate that emissions could fall by 20.9–54.3 MtCO2e per year under the latter scenario. These savings would be double to four times those from the other scenarios.
In line with these findings, the study recommends that the EU and Brazil strike an agreement in which the EU concentrates on sugar production from sugar beet for the global sugar market while Brazil focuses on producing ethanol from sugarcane. This would provide the greatest environmental benefits to society. Sugarcane ethanol production has already proved to be an economically viable alternative to sugar in Brazil and is more efficient than ethanol production from sugar beet. An additional advantage is that the economic impact on farmers in both the EU and Brazil would be minimal, limiting potential social resistance against the plan.