SCHOLARLY ARTICLE

Stéphani Cetimia Mariotti Ruiz, José Maria Ferreira Jardim da Silveira and Marcelo Marques de Magalhães | International Food and Agribusiness Management Review

The global energy transition has increased the demand for renewable feedstocks and circular business models, highlighting biomass supply chains as a strategic component of the emerging bioeconomy. In Brazil, sugarcane straw has become a promising yet complex residual biomass for the production of advanced biofuels. Despite its potential, the market remains fragmented, marked by high coordination costs, uncertainty, and institutional asymmetries that hinder efficiency and investment. This article analyses the dynamics of the residual biomass market from the perspective of the New Institutional Economics, focusing on governance structures and option costs. A theoretical–analytical approach, supported by empirical evidence from the Brazilian sugarcane sector, is employed to connect the heterogeneity of suppliers, the physicochemical specificity of the asset, and organizational and contractual arrangements between producers and biorefineries. The results indicate that hybrid governance structures, based on flexible contracts and cooperative arrangements, are the most effective in reducing transaction costs and ensuring supply stability. Information asymmetry and opportunistic behaviour remain critical challenges but can be mitigated through certification schemes, contract standardisation, and greater market transparency. The study concludes that efficient governance is a key condition for consolidating the bioeconomy, providing analytical foundations for dynamic modelling and for designing public–private coordination strategies in advanced biofuel markets.

Full article: https://brill.com/view/journals/ifam/aop/article-10.22434-ifamr.1460/article-10.22434-ifamr.1460.xml