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The Fuel That Was Once Synonymous with Economy in Brazil Lost Ground on the Streets. The Combination of Bureaucracy, Rising Costs, and New Technologies Changed the Scenario and Exposed How One of the Cheapest Alternatives Was Forgotten by the Country.
The CNG lost ground on Brazilian streets after a decade of expansion, pressured by regulatory requirements, increasing costs, and changes in the automotive market.
The fuel, which was once among the most economical alternatives in the country, saw its advantage diminish in light of the rise of flex engines, the reduction of state incentives, and new rules that increased the costs of conversion and maintenance.
The result is a fleet concentrated in professional niches and a refueling network that stopped growing at the same pace.
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From the Peak to the Decline of CNG in Brazil
The transformation began in the late 1990s when the Brazil-Bolivia gas pipeline, inaugurated in 1999, expanded the supply of natural gas.
According to a report published by the Mastery of Business channel, Petrobras, burdened by contracts that required payment for the input even without consumption, sought alternatives to increase internal use.
The transportation sector was identified as one of the main opportunities.
Between 2003 and 2005, the price ceiling policy for gas kept the fuel competitive.
Although the investment in the conversion kit was high, the return was quick for high-mileage drivers, such as taxi drivers and fleet operators.
In Rio de Janeiro, state measures reduced ICMS and IPVA, boosting the number of conversions and gas stations.
São Paulo and other states adopted smaller incentives, but also contributed to the growth of the market.
Industrial Expansion and Impact on Energy Infrastructure
The CNG began to be more widely incorporated.
Automakers tested factory versions, such as the Siena adapted for gas.
According to findings from the Mastery of Business channel, the expansion of the refueling network had an impact beyond mobility: each new station helped justify the expansion of the piped gas system to previously underserved regions.
By the mid-2000s, Brazil ranked among the largest global markets, with hundreds of thousands of converted vehicles, primarily in the Southeast.
According to industry experts, CNG consolidated during that period as one of the most accessible and sustainable alternatives for urban transport.
The Weight of Bureaucracy and Rising Costs
Starting in 2007, the scenario changed.
The Resolution 262 from Contran made annual safety inspections mandatory for converted vehicles.
The measure was created to prevent accidents but brought new costs and timelines for drivers.
Additionally, the requalification of the cylinder every five years, requiring removal of the equipment and inspection by accredited companies, increased maintenance costs.
The impact intensified in 2022, with the Portaria 133 from Inmetro, which established a validity period for cylinders based on the year of manufacture, even if approved in tests.
According to the Mastery of Business channel, the change raised expenses and reduced the economic attractiveness of the fuel, especially among drivers who relied on CNG to lower operational costs.
Market Reaction and Changes in Usage Profile
With the new requirements and rising costs, some drivers stopped keeping their registrations and inspections up to date.
Specialized workshops also faced difficulties in meeting the regulations, and many closed down.
The conversion kit price increased, while the price of gas per cubic meter rose in major capitals.
The Mastery of Business channel also noted that the use of CNG became concentrated among app drivers and corporate fleets, for whom the mileage still justified the investment.
According to industry entities, the decline in conversions reduced fleet renewal and directly impacted the opening of new stations.
The Advance of Flex Cars and the Decline of Vehicle Gas
While CNG faced regulatory obstacles, the automotive industry consolidated another trend.
The flex technology became standard starting in the 2010s, allowing users to choose between gasoline and ethanol without additional adaptation costs.
According to market analysts, this practicality made flex cars more attractive and reduced the demand for compressed natural gas.
Starting in 2015, state incentives for CNG lost strength, and the topic ceased to be a priority in national energy policy.
Automakers focused investments on hybrids and electrics, while vehicle gas lost prominence in long-term plans.
Experts point out that the lack of coordination between environmental and mobility policies contributed to the sector’s decline.
CNG Around the World and the Opportunity for Biogas
While Brazil reduced the space for CNG, according to the Mastery of Business channel, countries like Argentina and Italy maintained gas as a strategic component of their vehicle matrices, with robust refueling networks and active fleets.
In the national scenario, the recent highlight is biogas, gas equivalent to natural gas, but of renewable origin and produced from waste from urban and agricultural areas.
Distributors began to inject biogas into the network, but, according to industry technicians, the lack of a national plan that integrates CNG and biogas into incentive programs limits expansion to light vehicles.
The new investments planned in refueling infrastructure are likely to prioritize heavy transport and industrial use.
Costs, Economy, and the Reduction of Advantage
The cost of CNG depends on three main factors: initial investment, price per cubic meter, and expenses with inspections and certifications.
With the rise in gas prices and the increased frequency of mandatory checks, the price difference per kilometer driven decreased compared to gasoline and ethanol.
Experts state that, even when the advantage persists, the payback period has become lengthy for those who use the vehicle only moderately.
Yet, high-mileage drivers continue to find CNG advantageous, especially for short and predictable urban trips.
According to the sector, this persistence shows that the fuel remains relevant in specific niches, although far from the level it once held in the market.
Lack of Coordination and the Future of Vehicle Gas
At its peak, CNG connected industry, stations, distributors, and state governments.
Experts assert that over time, the lack of coordination between safety and competitiveness policies compromised the economic balance of the sector.
The absence of tax predictability and a clear strategy for the role of gas in the energy transition limited its expansion potential.
With the rise of biogas and alternative fuels, the key question now is whether the country can reintegrate vehicle gas into energy policy in a stable manner, with rules proportional to the risk and incentives capable of recovering its competitiveness.
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