Lula sanctions Fuel of the Future, which promises to unlock R$260 billion in investments

SÃO PAULO (Reuters) – President Luiz Inácio Lula da Silva sanctions this Tuesday the law for the Fuel of the Future project, which promises to unlock investments worth 260 billion reais and avoid emissions of 705 million tons of carbon dioxide by 2037, according to an assessment by the Ministry of Mines and Energy released before the ceremony.

The program approved by the National Congress creates new green industries in Brazil, being considered by the government as the “largest” decarbonization project in the transport sector.

“The advances we will make as a result of this law are unprecedented, introducing sustainable aviation fuel (SAF) and green diesel to the energy matrix, and decarbonizing sectors that contribute significantly to the planet’s pollution”, said the Minister of Mines and Energy, Alexandre Silveira, in a statement.

The project approved by the Chamber, in addition to encouraging the production of new fuels, such as SAF and biogas, should facilitate an increase in the mixture of ethanol in gasoline and biodiesel in diesel, boosting industries such as sugar cane, corn and soy, which already account for a significant portion of biofuel consumption in Brazil.

The increase in the mixture of biodiesel in diesel to 25% by 2035, compared to the current 14%, as foreseen by the Future Fuel Law, will require a volume of soybean oil 296% greater than the 4.8 million tons that the country used to manufacture biofuel in 2023, when the mixture was 12%, according to calculations by the Brazilian Association of Vegetable Oil Industries (Abiove).

In Brazil, biodiesel production is mostly made from soybean oil, which accounts for more than 70% of the total raw materials used.

In order to reach that level of production that the increase in mixing may require by 2035, investments of 52.5 billion reais will be necessary in new plants and soybean crushers, said Abiove, an entity that brings together oilseed trading companies and processors. .

In this scenario, biodiesel production would consume 19 million tons of soybean oil per year by 2035, compared to 5.9 million tons estimated by Abiove in 2024.
To reach this volume, it will be necessary to install 47 new crushers and another 33 biodiesel plants. The country currently has 132 crushing units and 57 soybean oil refining and packaging factories, according to data from Abiove.

“The sanction of the PL dos Combustíveis do Futuro is a milestone in the fight against climate change…, the decarbonization of the transport matrix in Brazil is a decisive step towards reducing greenhouse gas emissions”, said CEO of biodiesel producer Binatural Energy, André Lavor.

According to him, the biodiesel sector will contribute to the reduction of more than 320 million tons of CO2 over the next 10 years, with the progressive increase in the mixture of biodiesel in diesel to 25%.

He also cited the addition of 412 billion reais to the GDP and a saving of 10.5 billion dollars in imports of fossil fuels, such as diesel, as biodiesel will make up a larger portion of the product sold at gas stations.

Furthermore, according to the text approved in Congress, the new percentage of anhydrous ethanol mixture in gasoline may vary between 22% and 35%. Currently, the mixture can reach 27.5%, with at least 18% ethanol.

The project will be sanctioned this morning during the Liderança Verde Brasil Expo fair, at the Brasília Air Base, which hosts an exhibition of equipment and vehicles that will use biofuels such as SAF and BioGLP.

At the exhibition, visitors will be able to see aircraft from the main companies and manufacturers operating in the country. Trucks, tractors, excavators, harvesters, buses and passenger vehicles that can use renewable fuels will also be on display.