President Lula Signs the "Future Fuel" Law

October 10, 2024

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by Jefferson dos Santos Estevo* (Advanced Biofuels USA) On October 8, 2024, President Lula da Silva signed the "Future Fuel" Bill (PL 528/2020) into law at an event held at the Brasília Military Air Base. This legislation, which was introduced to the National Congress by the federal government in September 2023, was approved by both houses, Senate and Chamber of Deputies, with a strong majority after nearly a year of debate. The bill marks a significant step in Brazil’s energy transition, particularly in the transportation sector, and is critical for the country’s decarbonization goals and climate mitigation commitments.

The bill aims to position Brazil as a global leader in sustainable energy initiatives, unlocking investments and promoting the creation of biorefineries to produce sustainable fuels. It covers the entire lifecycle, from production to end-use, encouraging multiple economic sectors to adopt greener practices. A key aspect of the legislation is the integration or upgrading of sustainable fuels in transportation.

One of the main provisions includes increasing the blend of anhydrous ethanol in gasoline, setting the level at 27%, but allowing flexibility to reduce it to 22% or raise it to as much as 35%. Similarly, the blend of biodiesel with fossil diesel could increase to 20% by 2030, with an incremental rise of 1% per year starting in 2025. The National Energy Policy Council (CNPE) will be responsible for assessing the technical feasibility of this goal, and the variation could range between 13% and 25%. The CNPE will also evaluate the use of green diesel, and the bill establishes the National Green Diesel Program to foster research, production, and commercialization of this biofuel.

The bill also introduces the National Decarbonization Program for Natural Gas Producers and Importers, which focuses on reducing emissions in this sector through the increased use of biomethane. The target is for a minimum of 1% biomethane inclusion by 2026, reaching 10% by 2030, with annual benchmarks to be defined by the CNPE.

Another significant element of the legislation is the establishment of a regulatory framework for synthetic fuels in Brazil. The National Petroleum Agency (ANP) will oversee the regulation of these fuels and manage geological activities related to carbon capture and storage. Under the new rules, companies will be permitted to engage in the transportation, capture, and storage of carbon dioxide through contracts that can last up to 30 years, with an option for renewal.

A major advancement is the creation of the National Sustainable Aviation Fuel Program (Probioqav), which sets emission reduction targets for the aviation industry. Starting in 2027, airlines will be required to reduce emissions by 1%, increasing to 10% by 2037, primarily through the use of Sustainable Aviation Fuels (SAFs). Brazil plans to produce SAFs using various feedstocks such as agricultural residues, animal fat, vegetable oils, and sugarcane or corn-based ethanol.

The event was attended by key figures, including Dilma Rousseff, president of the New Development Bank, Arthur Lira (PP-AL), president of the Chamber of Deputies, John Rodgerson, CEO of Azul Airlines, and Alexandre Silveira, Minister of Mines and Energy. Representatives from various sectors, including agribusiness, biofuels, automakers, and airlines, were also present.

The ceremony took place alongside the Green Leadership Brazil Expo, which showcased the country’s leading decarbonization technologies. Aircraft from Brazil’s major airlines were on display, and President Lula symbolically signed one of Azul’s planes, underscoring the importance of Sustainable Aviation Fuel (SAF) and the aviation sector’s energy transition.

The "Future Fuel Law” is a landmark in Brazil’s journey toward a sustainable energy future, “Brazil is now a model for the world. Brazil will lead the largest energy revolution on planet Earth, and there is no one to compete with Brazil,” declared President Lula. Particularly within the transport sector, and is expected to drive innovation and investment across the country.

*Post-doctoral researcher in Political Science at the Federal University of Goiás, Brazil. Fellow of CNPQ and FAPEG jeffersonestevo@ufg.br

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“We have always heard that Brazil would be the country of the future. But today, with a lot of sweat and work, we are planting a new seed: the Fuel of the Future. A green economy that will expand national production from 34 to 50 billion liters per year. Inpasa demonstrated this today and will inaugurate the largest plant on the planet. This shows confidence in the Brazilian economy,” the minister pointed out.

At the ceremony, José Lopes, the company's president, signed the agreement that deals with the investment of R$3.4 billion for the expansion of the Sidrolândia (MS) plant and for the completion of the Balsas (MA) plant, which will begin operating in March 2025, in addition to the construction of the biorefinery in Luís Eduardo Magalhães (BA), with operations scheduled for March 2026. Lopes also highlighted the operation of the four phases of the Sinop biorefinery, which, with an investment of R$4.1 billion, is considered the largest producer of cereal ethanol in the world.

The Sinop plant has the capacity to produce 2.1 billion liters of ethanol per year, processing around 4.6 million tons of second-crop corn, in addition to generating 1 million tons of DDGS (high value-added protein), 105 thousand tons of oil and 804.1 GWh of bioelectricity.

“Receiving recognition as an example of technological and industrial innovation demonstrates the potential of the company and Brazil to lead the development of clean and renewable solutions that meet the growing global demand for low-carbon energy,” said José Lopes, highlighting the importance of Inpasa in the Brazilian bioeconomy scenario. READ MORE

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In addition, Grupo Potencial announced investments of $3 billion Brazilian reals (USD$540 million) in the biodiesel production chain, with emphasis on the expansion of the Lapa plant in Paraná, which will become the largest single-plant biodiesel producer in the world due to the investment, according to the Brazilian government.

Grupo FS will implement a carbon capture and storage (CCS) plant associated with ethanol in Lucas do Rio Verde, Mato Grosso.

Also investing in a biodiesel plant in Uberaba, Minas Gerias, Be8 has committed to investing $400 million Brazilian reals (USD$72 million) in the project.

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