Fuel of the Future will increase ethanol in gasoline to 30%

The percentage of ethanol blended in gasoline will increase. Today, it is at 27%. It will rise to 30% by 2030. The new proportion is contained in the PL report 4,516known as Fuel of the Future.

The project was sent by the Executive to Congress. Focuses on the energy transition. And it expands the use of biofuels. In addition to ethanol, there are new rules for biodiesel and SAF (Sustainable Air Fuel), an acronym in English that means sustainable air fuel.

According to the deputy Arnaldo Jardim (Cidadania-SP), rapporteur of the proposal, the text will be delivered to the Chamber at the beginning of February. The President of the Senate, Rodrigo Pacheco (PSD-MG), called the 1st session for February 5th, a Monday. According to the politician from São Paulo, he has the support of Arthur Lira (PP-AL), president of the Chamber.

Here is the interview (39min36s):

Another definition that will appear in the report is that the percentage of biodiesel will increase from the current 14% to 20% of the total. It is predicted that it could increase up to 25%. The definition of the pace of increase will be made by the CNPE (National Energy Policy Council).

Investment

Increasing the percentage of ethanol will require investment. Today, the industry does not have the installed capacity to increase the percentage in the defined volume. According to Arnaldo Jardim's calculations, an investment of R$200 billion will be required.

This value, he said, will all come from the private market. According to him, this is an investment that will have quick results. The expansion will have an immediate result in the sale of more ethanol, given the increase in the mixture.

“If the government needs to invest, something is wrong. Firstly, because today we live in a very tight fiscal situation. The government has priorities, the need to invest in issues that are more immediate, I'm talking from a social point of view, health, education, emergency issues”, said Arnaldo Jardim.

In the case of biodiesel, the industry already has the installed capacity to expand the mixture. There will be no immediate need for a large investment.

Jardim refutes the arguments that, with the increase in the percentage of biodiesel and ethanol, there will be inflationary pressure on the fuel.

For Arnaldo Jardim, there is no risk of the increase in the mixture of ethanol in gasoline and biodiesel in diesel putting pressure on inflation

“This analysis [de que aumentar a mistura de etanol na gasolina e no biodiesel pode impactar negativamente a inflação] can't stand the numbers. This was an argument used in the previous government, when the mixture was reduced from 13% to 10%. It did not result in any reduction in the price of diesel and now the growth in the mixture also did not impact the price of diesel. Then the account closes”he said.

Here are some excerpts from the interview:

• Lula 3 x Lula 2 – “We have a more empowered Legislature, with initiative, with the capacity to manage its own budget. This all requires accommodation. Every time there was dialogue, the relationship prospered. I think the government has a support base in the Federal Senate. In the Chamber, the year begins with a more constituted base. I don't see structural governance problems, but rather moments of tension. There is one now at the beginning of the year, which is the MP for re-encumbrance. The tax relief started under Dilma. And we express our desire to continue. The government preferred not to and said it would send a proposal. Did not come. He vetoed what we approved. And now he sent an MP that reinstates the burden. It is obvious that the government does not have a parliamentary majority for this. will be rejected“;
• SAF and inflation – “In the case of SAF (Sustainable Aviation Fuel), I recognize that the additional you will put in kerosene will initially be an additional cost. But then this gains scale, advances technologically and largely pays off”;
• Tax credits for energy transition – “[O projeto] It's going very well, it's had an extraordinary welcome. The president [Arthur] Lira has been an enthusiast of this project. He really encouraged me to study this subject, asking for several meetings to discuss the project. When it was ready, he invited minister Haddad, who listened and reacted very sympathetically”;
• Government and agriculture – “I think that [a relação do governo com o agro] needs to improve a lot. The issue of invasions […] It isI think that Brazil still has some regions where we need to carry out agrarian reform, although the dynamics itself has done this in several States, which are already small, differentiated properties. I think that for small children, it is not enough to just give the property, it is necessary to guarantee alternatives, support from the point of view of information, agronomic support and lines of financing”;
• Intrusion tolerance – “When the government appears tolerant or inactive, in some cases, regarding invasions, it is logical that this causes problems in the relationship with agriculture. I think the government has given contradictory signals about this”;
• Green economy – “I have no doubt that Brazil will be at the forefront of the new low-carbon economy, called the green economy”.