The "Fuel of the Future" Bill and the Opportunity for Sustainable Aviation Fuels

April 16, 2024

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by Jefferson dos Santos Estevo[*1], Amanda Duarte Gondim [*2] and Laís Forti Thomaz[*3] (Advanced Biofuels USA) On March 13th, the Brazilian Chamber of Deputies approved Bill 4516/23, known as the "Fuel of the Future" Bill, which was sent to Congress by President Luiz Inácio Lula da Silva and Alexandre Silveira, Minister of Mines and Energy, in late 2023 (MME, 2023; Câmara dos Deputados, 2024a). The approval was achieved with an excellent margin, with 429 favorable votes, 3 abstentions, and 19 against, out of 513 federal deputies (Câmara dos Deputados, 2024b).

Brazil Chamber of Deputies votes on
Fuel of the Future bill.

Of the 19 opposing votes, 3 came from the Novo Party, which was the only one dissenting. According to Gilson Marques (Novo-SC) "We cannot force the consumer, mostly the poor, to finance a product they do not want voluntarily. If the idea was good, it wouldn't be forced" (Câmara dos Deputados, 2024a).

The majority of the remaining votes against the bill were from deputies close to former President Jair Bolsonaro, such as Bia Kicks, Captain Alden, Delegate Bilynskyj, General Girão, and Zé Trovão, all from the Liberal Party. The remaining opposing votes came from other Parties, including the Progressive, the Democratic Renewal, and the Union, all of which have good relations with Bolsonaro. An intriguing instance occurred with Deputy Valter Loubet from the Workers' Party of Mato Grosso, the very same party as President Lula da Silva. Loubet cast his vote against the bill (Câmara dos Deputados, 2024b).

The bill's rapporteur in the Chamber was Federal Deputy Arnaldo Jardim from São Paulo, representing the Citizenship Party. He is a seasoned politician with expertise in energy transition, environmental issues, and agribusiness. His extensive experience proved crucial in negotiating with various deputies and parties representing diverse ideologies and interests, ultimately leading to the bill's approval (Câmara dos Deputados, 2024a).

The President Luis Lula da Silva
and the Minister of Mines and Energy
Alexandre Silveira sign the
Fuel of the Future Bill.

Purpose

The Fuel of the Future Bill effectively bridged the gap between opposition and government, further backed by the commitment for approval from the Chamber's President, Arthur Lira. It is now slated for analysis and voting in the Senate, with Veneziano Vital do Rêgo serving as the rapporteur.

In essence, it represents a significant initiative for the country, echoing the sentiments of Lula da Silva who emphasized its importance."This production of biofuels, this global energy transition that everyone is calling for, is an opportunity for this country. A chance to transform Brazil into something much more important than the Middle East is to the world with oil; we can be for renewable fuels”(MME, 2023,n.p).

Initiatives aimed at integrating sustainable fuels into the transportation sector are delineated into six key areas (MME, 2023):

Mandating ethanol content in gasoline to range from 22% to 30%, contingent upon technical feasibility;
Fostering the alignment of the National Biofuels Policy, the Route 2030 Program, and the Brazilian Labeling Program;
Formalizing the National Green Diesel Program to progressively incorporate this fuel into the national energy matrix;
Outlining the regulatory framework for synthetic fuels in Brazil, with regulatory oversight entrusted to the National Agency of Petroleum, Natural Gas, and Biofuels (ANP);
Establishing the regulatory scenario for the geological activities of carbon dioxide capture and storage; and
Creating a National Sustainable Aviation Fuel (SAF^{^[1]}) Program

Creating a National Sustainable Aviation Fuel (SAF) Program

The sixth axis of the Bill, the creation of the National Sustainable Aviation Fuel (SAF) Program (ProBioQAV), is an initial measure to promote emissions reduction in the aviation sector (MME, 2023) which accounts for 0.67% of national CO² emissions (ANAC, 2024). Globally, the aviation sector is responsible for about 2% of emissions, still a low figure, but expected to increase globally as well as in Brazil. The best alternative lies in energy transition through SAF.

According to the new policy, airlines must reduce greenhouse gas emissions by 1% from 2027, increasing to 10% by 2037, through the gradual rise in the blend of sustainable fuels (MME, 2023). Therefore, the country needs to advance in the development of SAF. It has great potential in the sector due to a variety of production routes.

The HEFA (Hydro-processed esters and fatty acids) route is currently the most widely utilized, "considered the one with the greatest potential for large-scale production worldwide, given the consolidation of its market and its lower technological and production costs" (Thomaz, Pimental, 2022, p.102). According to a study by Malina et al (2022), announcements of SAF production up to 2025 are concentrated in the HEFA routes of SAF, with 62%, followed by FT (Fischer-Tropsch) (23%) and ATJ (Alcohol-to-Jet) (5%), due to technological advancements and the availability of raw materials.

Brazil, with its robust agricultural production capacity, stands as one of the foremost biofuels producers globally. The country holds significant promise particularly with HEFA, utilizing soy oil and animal fat.

Furthermore,Brazil has a prominent position as a major sugarcane producer, positioning it to excel in the ATJ pathway, consequently granting it a competitive advantage with SIP (Renewable Synthesized Iso-Paraffinic Fuels). Additionally, Brazil boasts ample opportunities for leveraging agricultural, forestry, and urban biomass in the FT process (RBS, 2021;Thomaz, Pimental, 2022; Estevo,2023).

According to an RBS (2021) study, Brazil has the potential to produce up to 9 billion liters of SAF, with the majority in the ATJ and FT pathways. This amount will be more than enough to meet domestic demand, with the potential for the country to become an exporter, making it a powerhouse in the sector, as is already the case with other biofuels.

Essential for Defossilization

Senate approval of this Bill is essential for the development and advancement of SAF in the country. The voting data in the Chamber indicates the importance of the project, connecting both ruling and opposition parties, highlighting the relevance of the issue, both environmentally and economically, with emissions reductions and fuel production.

In the civil aviation sector, the establishment of laws and regulations is essential for defossilizing the industry. In Brazil, this marks a significant initial step, originating from the federal government, with promising progress in Congress.

The proposed Bill could serve as a catalyst, incentivizing the sector and companies to further develop SAF in the country, following as observed in the United States and some European nations.The Bill Fuel of the Future is an important initial step, but much progress is needed by 2027, to begin reductions in the sector.

References:

ANAC (2024).Inventário Nacional de Emissões Atmosféricas da Aviação Civil. Agência Nacional de Aviação Civil (ANAC). Available at: https://www.gov.br/ana
c/pt-br/assuntos/meio-ambiente/inventario-nacional-de-emissoes-atmosfericas-da-aviacao-civil

Câmara dos Deputados (2024a). Câmara aprova projeto dos “combustíveis do futuro”. Câmara dos Deputados do Brasil. Available at:https://www.camara.leg.br/n
oticias/1043361-camara-aprova-projeto-dos-combustiveis-do-futuro/#:~:text=A%20C%C3%A2mara%20dos%20Deputados%20aprovou,proposta%20ser%C3%A1%20enviada%20ao%20Senado.

Câmara dos Deputados (2024b). Resultado das votações e lista de presença - Proposição: PL Nº 528/2020. Câmara dos Deputados do Brasil. Available at: https://www2.camara.leg.br/atividade-legislativa/plenario/resultadoVotacao 13/04/2024.

Estevo,J.(2023). Os avanços do Brasil no âmbito dos Combustíveis Sustentáveis de Aviação (SAF). E a participação do estado de Goiás. Anais do 13º Workshop Empresa, Empresários e Sociedade “Fronteiras do desenvolvimento: inovação, sustentabilidade e democracia”. Available at: https://files.cercomp.ufg
.br/weby/up/1354/o/WESS_%281%29-81-103.pdf

MALINA, R; ABATE, M; SCHLUMBERGER ; PINEDA,F.(2022). The Role of Sustainable Aviation Fuels in Decarbonizing Air Transport. World Bank Group. Available at: https://documents1.worldbank.org/curated/en/099845010172249006/p
df/P17486308a996a08b098a10d078d421c6a3.pdf

MME (2023). Governo entrega Projeto de Lei do Combustível do Futuro. Ministério de Minas e Energia do Brasil. Available at:https://www.gov.br/mme/pt-br/assuntos

/noticias/governo-entrega-projeto-de-lei-do-combustivel-do-futuro

RSB & Agroicone (2021). Feedstock Availability for Sustainable Aviation Fuel in Brazil: Challenges and Opportunities. Roundtable on Sustainable Biomaterials, Available at:https://www.agroicone.com.br/wp-content/uploads/2021/06/RSB_Agroi
cone_Feedstock_availability_2021.pdf

THOMAZ, L.; PIMENTEL, C (2022). Estudo sobre governança e políticas públicas de incentivo à produção de combustíveis sustentáveis de aviação. ProQR Combustíveis Alternativos sem Impactos Climáticos. Available At: https://p
tx-hub.org/wp-content/uploads/2022/04/Governanca-e-Politicas-Publicas-para-SAF-3.pdf

^{^[1]} The main SAF pathways are: Fischer-Tropsch hydroprocessed synthesized paraffinic kerosene( FT) from Coal, natural gas, biomass; Synthesized paraffinic kerosene from hydroprocessed esters and fatty acids (HEFA) Bio-oils, animal fat, recycled oils;Synthesized iso-paraffins from hydroprocessed fermented sugars (SIP) Biomass used for sugar production; Alcohol to jet synthetic paraffinic kerosene (ATJ-SPK) Biomass from ethanol, isobutanol or isobuthene; and Catalytic hydrothermolysis jet fuel (CHJ) Triglycerides such as soybean oil, jatropha oil, camelina oil, carinata oil, and tung oil

^{^[*1]} Post-doctoral researcher in Political Science at the Federal University of Goias, Brazil. Fellow of CNPQ and FAPEG jeffersonestevo@ufg.br.

^{^[*2]} Professor of Petroleum Chemistry at the Federal University of Rio Grande do Norte, Brazil. amandagondim.ufrn@gmail.com.

^{^[*3]} Professor of International Relations at Federal University of Goias and Adviser at the National Secretariat of Oil, Gas and Biofuels at the Ministry of Mines and Energy of Brazil. laisthomaz@ufg.br.