Brazil advances with a new regulatory framework for biofuels
On 8 October 2024, Brazil passed legislation representing a significant milestone for the biofuels sector in Brazil, including biogas and biomethane – a gaseous biofuel primarily composed of methane derived from the purification of biogas. Known as the Future Fuels Law (“Lei dos Combustíveis do Futuro”), the new legislation aims to promote the decarbonisation of the country’s energy matrix, focusing on sectors such as transportation and mobility.
The legislation includes programmes like the National Programme for the Decarbonisation of Natural Gas Producers and Importers and Incentives for Biomethane, which are essential to reducing greenhouse gas emissions and fostering sustainable development in the gas sector. The programme aims to:
- Stimulate the production and consumption of biomethane and biogas by promoting new projects across the production chain and requiring the adoption of these biofuels through blending mandates.
- Encourage the manufacture, sale, purchase, and use of methane-powered vehicles, the conversion of vehicles running on other fuels to methane, and the replacement of diesel engines used in vehicles with new methane-powered engines approved by certifying bodies.
- Foster infrastructure projects that allow biomethane production plants to be connected to natural gas distribution and transport networks as long as they are economically viable.
The law also sets annual greenhouse gas (GHG) emission reduction targets for natural gas producers and importers, which will be established by the National Energy Policy Council (CNPE) starting on 1 January 2026. These targets involve increasing the share of biomethane in natural gas consumption, beginning with a 1% reduction and potentially reaching up to 10%. Compliance with these targets can be demonstrated through using biomethane or acquiring Biomethane Guarantee of Origin Certificates (CGOB in Portuguese), which certify the use of biomethane to offset emissions. Failure to meet these targets will result in fines ranging from R$ 100,000 to R$ 50,000,000, depending on the severity and benefits gained by the violator.
The Future Fuels Law aims to attract significant investments to the sector, with estimates of over R$ 260 billion in areas such as biomethane, ethanol, and sustainable aviation fuels (Source: Agência gov)
During the ceremony to enact the legislation, President Lula emphasised that Brazil has the potential to lead a global energy revolution. Minister of Mines and Energy Alexandre Silveira also highlighted that the law marks an “agroenergy revolution”, positioning Brazil at the forefront of the green economy, combining the strength of Brazilian agriculture with the country’s ability to produce biofuels.
Charlotte Morton OBE, Chief Executive of the World Biogas Association, stated in response to this development: “I am delighted to hear that Brazil’s ambitious new regulatory framework for biofuels includes biogas and biomethane, particularly following the World Biogas Association BRAZIL Congress 2024 held on 1 October. At the event, international and Brazilian leaders in the biogas and biomethane sectors came together to explore market conditions, discuss new opportunities for investment and growth, and identify the immediate and long-term challenges we must address to ensure a successful scale-up of biogas technologies. I look forward to building on the Brazilian Government’s commitment to scaling biomethane use nationwide. With the release of our best practice guidance, we see real opportunities to collaborate closely with the government and industry to grow this sector sustainably. Together, we can accelerate Brazil’s energy transition, strengthen its bioeconomy, and support global climate targets.”
Renata Isfer, president of the Brazilian Biogas Association (ABiogás), highlighted the importance of this legislation for the biomethane market, which is finally receiving a dedicated biomethane policy after many years. She predicts that biomethane could replace diesel in trucks, promoting both economic and environmental sustainability, as this fuel emits up to 89% fewer greenhouse gases compared to natural gas and is cheaper than fossil diesel. According to Isfer, injecting biomethane into existing pipelines will also be allowed, facilitating its commercialisation and large-scale use. (Source: CanalEnergia)
Through this programme, Brazil aims to strengthen its leadership in the biofuels sector. Supported by the complementary RenovaBio initiative and its role in the Global Biofuels Alliance, Brazil is set to reinforce its strategic position in the global renewable energy market.
