Even though, more than 90% of the Brazil’s power generation is produced from hydro-electric powers and more than 45% of the country’s energy matrix comes from renewable sources, the country is a GHG major emitter. Besides the efforts to reduce deforestation rates, the potential of future emissions in this sector remains large and could be increased with the projected expansion of bioenergy production. Brazil is the world’s largest producer of ethanol, with over half the cars sold in the country can using it as fuel. The country burns 4 billion gallons annually. Four in ten vehicles run entirely on ethanol and the remainder use blends of up to 24% ethanol and 76% petrol. The country now lives a new expansion of bioenergy feedstock plantations. The sugarcane plantations are expanding out of traditional areas, advancing into the Cerrado biome and possibly the Amazon rainforest. This new scaling is being promoted by the belief that ethanol, methanol and bio-diesel will have a greater role as fuel in Brazil and abroad as a “greener” option to consumers. Both global and internal demands for alternative fuels contribute to this disordered expansion. Until 2010 an additional demand for 10 billion liters of alcohol and 7 million tons of sugar will be created. Thus, another 180 million tones of sugarcane will need to be produced, with an expansion of 2.5 million hectares of sugarcane plantations until 2010. This is additional to the annual harvest production estimated around 17 billion of liters of alcohol and 26 million tons of sugar for 2007, which already takes an area of 6 million hectares. In addition, the Brazilian government has launched a biofuel policy by which 2% of bio-diesel (vegetal oils) is added in the composition of diesel, targeting an increase to 5% until 2010. This expansion counts with nearly 90 million hectares of new agricultural frontiers available and other 60 million hectares that can be converted from pasture to agriculture. The biofuel policy also has a poverty alleviation perspective, since the government considers that there should be participation of small farmers in their production, in particular at the semiarid regions of the Northeast with 2 million families living in extreme poverty. The use of non-renewable sources of energy for urban activities represents a significant percentage of overall energy demand in the country (at about 55%). The use of domestic firewood increased in recent years and has reached 40% of the overall residential energy matrix - it amounts to 8.2% at the industry. In the Northeast of Brazil alone an average of 6 thousand tons of firewood are used daily at residences. Another major use of bioenergy is industrial charcoal for the processing of iron ore. In the Carajás region alone 14 million cubic meters of charcoal are used annually, requiring about 30 million cubic meters of wood as raw material. Currently, some 70 percent of this charcoal comes from illegal and non-sustainable sources. This is one of the reasons why the Carajás region is witnessing accelerated deforestation against the national trend. Bioenergy has become one of the most dynamic sectors of the Brazilian economy, experiencing very rapid growth through expansion into new areas and new producer groups as well as diversification of feedstock and evolution of endogenous technology, which may be extremely valuable for other developing countries. These benefits however will hardly materialize and be distributed without concerted efforts and in the absence of integrated and comprehensive assessment of the significant climate, environmental and social risks associated with the current use and expansion of bioenergy. Main concerns range from changes in land-use with further loss of natural vegetation and biodiversity, possible threats to food security, impacts on soils, water and air quality. While bioenergy has major potential to create employment and income for poorest groups in society in rural and urban areas, traditional development approaches have often excluded these groups.