Brazil to discuss federal bill aimed at developing the biofuel sector

Brazil’s President Luiz Inácio Lula da Silva, mines and energy minister Alexandre Silveira and other ministers have signed a fuel program bill, which will be sent to congress. 

The program, dubbed Combustível do Futuro, includes a set of initiatives to promote sustainable low-carbon mobility and would help Brazil meet international targets for reducing greenhouse gas emissions.

Rodolfo Taveira, director of the energy and natural resources area at consultancy Oliver Wyman, told BNamericas that the signing shows the government wants to encourage biofuel consumption and foster demand predictability, especially for sustainable aviation fuels (SAF) and renewable diesel.

The text proposes the integration of biofuel policy RenovaBio, the Rota 2030 mobility and logistics program and the Brazilian vehicle labeling program (PBE veicular).

The bill also establishes the national sustainable aviation fuel program (ProBioQAV) to encourage the production and use of SAF, obliging airline operators to reduce carbon dioxide emissions by 1% from 2027, reaching a 10% reduction by 2037. This reduction should be achieved by increasing the mixture of SAF with fossil aviation kerosene.

In addition, the proposal creates the national green diesel program (PNDV), which is part of the effort to reduce foreign dependence on petroleum-based diesel by gradually incorporating green diesel into the country's fuel matrix.

Another point is the increase in the maximum and minimum limits for blending anhydrous ethanol into gasoline. The text changes the minimum content to 22% and sets the maximum percentage at 30%, subject to technical feasibility. 

The proposal also defines the regulatory framework for synthetic fuels, which will be regulated by watchdog ANP. 

E-Fuels aim to contribute to better environmental performance of combustion engines in the context of the energy transition, without the need to modify parts or components.

The project also proposes a regulatory framework for carbon dioxide capture and geological storage activities.

Taveira said the country's SAF production capacity needs to be encouraged and made viable. "There are already some projects, but given the volume expected to be demanded in the coming years, these investments will undoubtedly not be enough," he said. 

Adequate credit lines and a good business environment must be guaranteed so that production can take place locally.

He highlighted the importance of the proposal to increase the ethanol blend in gasoline, which will utilize the country's capabilities and increase the potential to reduce carbon emissions.

Biofuel producers association Aprobio said the bill would help guarantee predictability and legal certainty to reinvigorate biofuels investments.

Aprobio highlighted Lula’s commitment to bring forward an increase in the biodiesel blend in fossil diesel. "The government's proposal is positive, but it will have to be complemented in congress. We're going to follow this development in the legislature with the possibility of seeking to merge bills that deal with the same or similar issues in the [lower] house," Aprobio managing director Julio Cesar Minelli said in a statement. 

Lawmaker Alceu Moreira, who is the head of biodiesel parliamentary group FPBio, authored a 10-year bill under which the biodiesel share in diesel would reach 15% earlier than currently planned and a proposal for staggered growth to 20% within three years.

Pictured: Luiz Inácio Lula da Silva and Alexandre Silveira after signing the bill.