The New Era of Biofuels: Opportunities and Challenges

With increasing global concern about sustainability and the environmental impact of fossil fuels, the transition to biofuels is becoming fundamental.

In this context, the Minister of Mines and Energy emphasizes a fundamental point when he states that biofuels are essential for the energy transition of Brazil, which is described in the National Anthem as a “giant by nature”.

Biofuels not only represent a sustainable alternative to fossil fuels, but also play a crucial role in preserving the country's various biomes (which include the Amazon, Pantanal, Atlantic Forest, Cerrado and Caatinga) and reinforcing the self-esteem of the Brazilian people.

This new energy source aims to totally or partially replace the use of traditional energy sources with cleaner alternatives, such as green diesel, Sustainable Aviation Fuel (SAF) and biomethane.

What are biofuels?

Biofuels are derived from renewable sources such as plants and organic waste. In Brazil, ethanol and biodiesel are already widely used, and new technologies are emerging.

Main biofuels

1. Green Diesel: Produced from vegetable oils and fats, it can be used in conventional diesel engines and reduces GHG emissions by up to 90%. The National Green Diesel Program (PNDV) is due to start operations in 2025.

2. SAF (Sustainable Aviation Fuel): Created from renewable raw materials, it is essential for reducing emissions from the aviation sector, with targets of a 1% reduction per year from 2027.

3. Biomethane: Renewable gas from the decomposition of organic waste, it can replace natural gas and has low carbon emissions. The National Biomethane Incentive Program, sanctioned in 2024, aims to expand its use in Brazil.

Legislation and Incentives

Law 14.993 of 2024, recently passed, regulates and encourages the production of sustainable fuels, establishing clear targets for green diesel, SAF and biomethane. Companies can benefit from tax incentives and certifications, such as Biomethane Guarantee of Origin Certificates (CGOB).

Global context

The United States and Brazil are the world's largest biofuel producers, accounting for around 70% of global ethanol production.

In the US, ethanol production is mostly based on corn, with federal policies that encourage the use of biofuels as an alternative to oil. Programs such as the Renewable Fuel Standard (RFS) have played a crucial role in increasing the production and use of ethanol in vehicle fuels, as well as providing economic benefits for farmers and the biofuels industry.

Brazil, on the other hand, stands out for its production of ethanol from sugar cane, one of the most efficient sources for producing biofuels. The country has had an established program since the 1970s, known as Proálcool, which encouraged the use of ethanol as an automotive fuel. Currently, Brazil has an extensive ethanol distribution and marketing infrastructure, with flex-fuel vehicles that can use both gasoline and ethanol.

Conclusion

The new era of biofuels represents not only an opportunity for Brazil to reduce its GHG emissions, but also to boost economic development by creating new industries and jobs. Investing in this sector is key to ensuring a more sustainable and resilient future.

The combination of powers in ethanol production not only provides a viable alternative to fossil fuels, but also contributes significantly to the reduction of greenhouse gas (GHG) emissions and the diversification of energy matrices in both countries. In addition, the growing global demand for biofuels and sustainability policies are encouraging research and the development of new technologies in this sector.

If you are interested in opportunities in the sector, we are prepared to help companies and producers interested in exploring these opportunities, with legal certainty in the new regulatory environment for biofuels.