Brazil Weighs 32% Ethanol Blend in Gasoline

by Camila Souza Ramos (Globo Rural — São Paulo/Valor International) Brazil’s Ministry of Mines and Energy has indicated in recent days that it may recommend raising the share of anhydrous ethanol blended into gasoline to 32%, according to a senior source. The current level stands at 30%.

In recent meetings, Mines and Energy Minister Alexandre Silveira has signaled he may propose the increase at a meeting of the National Energy Policy Council (CNPE) expected at the end of April. Another meeting of the council is scheduled for this week, related to March, but the issue is unlikely to be ready for deliberation by then.

The measure would be part of a strategy to ensure fuel supply for Otto-cycle engines amid uncertainty stemming from the war in the Middle East. If adopted, the move would also help absorb an expected ethanol surplus in the 2025/26 harvest, with an additional 2 billion liters produced from sugarcane and another 2 billion liters from corn.

The 2024 Future Fuel Law allows the blend to reach up to 35%, subject to testing. In 2025, following official trials, the government raised the mandate from 27% to 30%.

According to a source familiar with the ministry, increasing the blend beyond 30% depends largely on consolidating data from tests that have already been carried out. A rise to 32% could displace 1.2 billion liters of gasoline consumption over 12 months, according to a recent estimate by Rabobank.

In a statement, the ministry said it has already begun work to assess the technical feasibility of higher blends, including E35. “The testing plan will be presented in due course and discussed with society within the framework of the Permanent Technical Committee on Future Fuels, ensuring transparency and stakeholder participation,” it said. The studies are coordinated by a research center of the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

The ministry added that any change in the blending mandate will be based on technical evidence and submitted to the appropriate authorities, ensuring regulatory predictability, energy security, and the sustainable advancement of Brazil’s biofuels policy.

Discussions around increasing the biodiesel blend face greater resistance within the ministry. Concerns center on fuel quality and potential damage to certain vehicles. Current legislation allows the blend to rise to as much as 20%, subject to prior testing.

To advance the biodiesel agenda, the Ministry of Mines and Energy has also advocated expanding the ANP’s oversight capacity. However, the regulator has faced budget constraints and limited operational tools in recent years. READ MORE

Excerpt from Valor International: Petrobras will evaluate whether it can supply 100% of Brazil’s diesel demand, according to CEO Magda Chambriard. This will be part of a review of the company’s business plan, which is scheduled to start in May. Petrobras usually releases a new plan each November, covering the next five years.

According to Chambriard, the company seeks to cushion international volatility to lessen its impact on the domestic market. “Statements by President Donald Trump have increased oil market volatility. We have observed that in the first 20 days of the war, Trump’s remarks caused $13 trillion to change hands.”

Chambriard said that Brazil, which exports most of its oil to Asia, has gained greater significance in this context. “We have grown in importance as an exporter of oil to Asia, with supply disruptions from the Middle East.” READ MORE

Excerpt from Associated Press/ABC News: Brazil is finding protection in a decades-old buffer against shocks that is both cheap and environmentally friendly as global oil markets tremble amid the escalating conflict in the Middle East -- As the war in Iran rattles global oil markets, Brazil is partially shielded by a decades-old buffer against shocks that is both cheap and environmentally friendly: Tens of millions of drivers here can choose between filling their tank with 100% sugarcane-based ethanol or a gasoline blend that contains 30% of biofuel.

Brazil’s massive dual-fuel fleet — consisting of vehicles capable of running on any combination of ethanol and gasoline — is unique in its scale. The program, launched in 1975 during the country's military dictatorship, has successfully evolved in democratic times to reduce dependency on foreign oil.

Today, as the latest conflict involving Iran, the United States and Israel enters its fifth week, nations like India and Mexico are looking at the Brazilian model as a blueprint for energy security.

While consumers worldwide face steep price hikes, Brazilian gasoline prices rose just 5% in March — compared to 30% in the United States. Analysts partially credit the stability to a mature domestic biofuels industry that allows the country to withstand geopolitical shocks with minimal risk of fuel shortages.

“Brazil is much better prepared than most countries because it has a viable alternative of this nature,” said Evandro Gussi, president of the Brazilian Sugarcane Industry Association, UNICA. READ MORE