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Sale of ethanol by mill owners directly to gas stations could become the 'solution' to contain and curb the rise in gasoline prices
In order to try to curb the increase in the price of gasoline and diesel at gas stations, the Draft Legislative Decree (PDC 916/2018), which deals with the direct sale of ethanol by plants – without going through distributors, has gained momentum in recent weeks with government support. Ethanol and gasoline prices soar, Petrobras increases CNG by 39% and readjustment could further impact Brazilians' pockets in the coming weeks
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Last Tuesday (06/04), the director general of the ANP, Rodolfo Saboia, stated that the creation of the so-called tied distributor – a regulatory alternative to enable the sale of ethanol by mill owners directly to gas stations, was delayed due to the delay on the part of the Ministry of Economy in presenting a tax solution.
He participated in a remote public hearing of the Economic Affairs Commission (CAE), chaired by Senator Otto Alencar (PSD), to discuss the fuel distribution system in Brazil and the existence of a possible cartel in the segment.
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“We hope that this project will continue as soon as possible. The CCJ does not analyze the merits, but the constitutional precepts, if it is not harming the nation in financial terms. I think this month it will be voted on”, says José Ricardo Sévero, technical director of the Federation of Cane Planters in Brazil (Feplana).
“Technically, the ANP is in favor of the direct sale of ethanol. However, she bumps into some demands that she needs to comply with. Today it is not possible to implement direct sales”, declared Saboia. According to the director general of the agency, a resolution of the National Energy Policy Council (CNPE) establishes that the commercialization of the so-called “fuel alcohol” without an intermediary between the producer and the reseller will be regulated by the ANP considering competitive equality in the tax aspect and preservation of the collection of taxes at a specific rate.
Direct sale of ethanol from plants will stimulate competitiveness with gasoline
It is still not possible to know exactly how much impact the direct sale of ethanol would generate on the price of biofuel in Brazil, since there is a lot of dependence on industrial logistics in each state. However, a study by Esalq-Log in 2019 showed that the average cost of transporting ethanol in the state of São Paulo would drop by around 30% with direct sales.
There are also estimates that the concentration of production and distribution margins in the producer and increased competition between mill owners and distributors in the supply of fuel in the market could reduce prices of hydrous ethanol for the final consumer by up to 20 cents per liter.
“The big gain is the appreciation of renewable fuel. It will be more competitive compared to fossil fuel, gasoline, and it will be more appetizing for the consumer to fill up”, points out Sévero.
Raízen of the Shell Group wants to build three plants producing ethanol made from sugarcane bagasse and straw
Raízen, the global giant producing ethanol together with Shell, intends to build three more cellulosic ethanol plants — or second generation. The good news was announced by businessman Rubens Ometto, from Cosan, last Monday (15/03)
The technology for producing cellulosic ethanol emerged from a partnership between Shell and the Canadian company Logen, specialized in biotechnology. In the past harvest (2019/20), the Piracicaba unit produced 226 liters of ethanol for each ton of dry biomass.
