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With the approval of the 'Fuel of the Future' bill, Brazil stands out in the global clean energy market and drives the growth of biofuels.
Have you heard about biofuels? This is one of the sectors that is booming when it comes to clean energy, and Brazil is on its way to becoming a major global player in this market. The approval of the bill “Fuel of the Future” by the National Congress promises to revolutionize the Brazilian energy sector, creating a favorable environment for new investments. It is estimated that this approval will unlock around R$200 billion in investments in the country, according to the Ministry of Mines and Energy. But what are biofuels, how do they work and why are they so important for the future of clean energy? Let's take a closer look at this topic!
What are biofuels?
Biofuels are fuels produced from renewable raw materials, such as plants, agricultural waste, used cooking oil, animal fat and even sewage sludge. Unlike fossil fuels, which release large amounts of carbon into the atmosphere, biofuels are considered a more sustainable alternative, as they emit fewer greenhouse gases and can be reused.
O Brazil is already one of the largest producers of biofuels in the world, with emphasis on sugarcane ethanol and biodiesel. With the new legal framework, the country intends to expand this market even further, exploring new sources and technologies to boost the production of clean energy.
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Brazil's new frontier
With the world increasingly concerned about climate change, the search for clean energy sources is on the rise. Biofuels play a crucial role in this transition to a more sustainable future. And Brazil, with its vast expanse of arable land and its expertise in agribusiness, has everything it needs to lead this transformation.
The legal framework for biofuels, approved in September, not only provides legal certainty for companies in the sector, but also encourages the development of new technologies and businesses based on renewable raw materials. Highlights include the use of biomethane to replace natural gas, the increase in the blending of biodiesel in diesel and the advancement of sustainable aviation fuels, known as SAF (Sustainable Aviation Fuel).
Promising investments in the biofuels sector
With the approval of the “Fuel of the Future”, Brazil has attracted the attention of investors from all over the world. The estimated R$200 billion in new investments is a reflection of the confidence in the country's potential to lead the clean energy market.
According to Erasmo Carlos Battistella, CEO of Be8, one of the leading biodiesel companies in Brazil, “with the approval of the law, a new journey for bioenergy begins in Brazil.” The country has agricultural areas that can still be explored to increase the production of raw materials, and this will be essential to expand biofuel production.
New projects in progress
In addition to expanding ethanol and biodiesel production, Brazil is also developing second generation biofuels, which have a smaller carbon footprint and are even more efficient. One example of this is corn ethanol, which is becoming a viable alternative to sugarcane ethanol, especially in regions where sugarcane is not competitive, such as the North and Northeast.
Another highlight is the investment of R$500 million by the National Bank for Economic and Social Development (BNDES) in expanding the production capacity of corn ethanol in Mato Grosso. This financing is part of a larger strategy to encourage the use of renewable raw materials for the production of clean energy in Brazil.
The role of ethanol in decarbonization
Ethanol, which pioneered the introduction of biofuels in Brazil with the flex cars, continues to be one of the major players in clean energy in the country. In recent years, ethanol has played a crucial role in the decarbonization of several industrial sectors.
Ricardo Mussa, CEO of Raízen, one of the largest bioenergy producers in the world, highlights that sugarcane ethanol is increasingly being used for industrial purposes, such as in the chemical and polymer industries. Currently, 70% of the ethanol produced by Raízen is destined for export to the foreign market, where it has a high premium due to its ability to “break the carbon chain” of chemicals.
Biofuels in aviation, what to expect?
Another promising field in the biofuels sector is sustainable aviation fuel (SAF). SAF is an alternative to traditional jet fuel and can be produced from renewable raw materials such as used cooking oil, sugarcane bagasse and animal fat.
O Brazil is well positioned to become a global leader in SAF production, especially since the country has around 40 million hectares of degraded land that can be used for biomass production, without the need for deforestation. Brazil is already the second largest producer of SAF, behind only the United States.
Companies such as Acelen Renováveis, which belongs to the Mubadala fund in the United Arab Emirates, have already announced massive investments in the sector. The company plans to invest R$12 billion by 2033 in the Mataripe refinery in Bahia to produce 1 billion liters of SAF for aviation.
The need for public policies that encourage the production of biofuels
Although Brazil has enormous potential in the biofuels sector, there are still challenges to be faced. One of the main obstacles is the lack of public policies that further encourage the production of biofuels, such as SAF, in the country. Currently, the United States and the European Union offer considerable incentives for the production of biofuels, which has led Brazil to export ethanol to the USA, which in turn produces SAF and exports it to Europe.
For Brazil to be able to compete on equal terms in the global market, it will be necessary to create public policies that encourage local production of SAF and other biofuels.
Brazil has everything it needs to become a global powerhouse in biofuel production and lead the transition to cleaner energy. With major investments on the horizon and the support of a solid regulatory framework, the country is ready to take advantage of the full potential that bioenergy can offer.
