Senate Committee Approves Fuel of the Future

The Senate Infrastructure Committee approved this Tuesday (September 3, 2024) the Fuel of the Future bill (Bill 528/2020) in a symbolic vote. The matter should be voted on in plenary by senators in the coming days. It will then return for a new vote in the Chamber, due to changes in the text during the processing in the Senate.

The rapporteur, Senator Veneziano Vital do Rêgo (MDB-PB), made some changes to the text, which had already been approved by the Chamber of Deputies. For the president of the Mixed Parliamentary Front for Biodiesel in the National Congress (FPBio), Deputy Alceu Moreira (MDB-RS), the approval of the PL shows “convergence between the various interests related to the expansion of production and use of biofuels in general”.

The rapporteur accepted several amendments (in part or in full) and vetoed proposals that, if approved, he justified, would harm the predictability of production for the biodiesel sector, stimulated by the gradual increase in the biodiesel blend content in diesel oil. The increase in biofuel consumption is the main point of the Fuel of the Future Bill.

Veneziano had made the report available on Wednesday (14 August), but the vote was postponed due to requests for more time for analysis, which were granted by the committee president, Confúcio Moura (MDB-RO).

One of the main discussions about the text, Petrobras’ co-processed diesel, was left out of the report. The product manufactured by the state-owned company from vegetable oils that are processed together with fossil diesel in refineries was not included in the mandate created for blending biodiesel.

Approved by the Chamber of Deputies on March 13 of this year, the Fuel of the Future bill was stalled in the Senate awaiting the report. Supported by the agribusiness sector, the government and, to a large extent, the energy sector, the main point of divergence in the text was whether or not to include co-processed products.

The product, created by Petrobras, is made from the processing of raw materials of plant origin, such as soybean oil. This renewable content is processed together with the petroleum derivative. The state-owned company and the IBP (Brazilian Institute of Oil and Gas) wanted the co-processed product to be included in the new minimum blend mandates created by the law.

Another topic that was discussed and maintained is the blending of biomethane with natural gas. According to the text, there will be an incentive to blend biomethane with commercialized natural gas, with targets to reduce GHG (Greenhouse Gas) emissions by 1% in 2026 and reach 10% in 2030.

Fuel of the Future Highlights

Veneziano also maintained the central points of the Fuel of the Future, sent by the government and attached to others that were already being processed in the Chamber. The text creates a new regulatory framework for biofuels, with incentives for the production of biodiesel, ethanol, green diesel, biomethane and sustainable aviation fuel.

• ethanol in gasoline – the mixture currently at 27% will increase to 30% and could reach 35%, provided that its “technical viability” is confirmed;
• biodiesel in diesel – addition will increase by 1 percentage point from 2025, starting at 15% and reaching 20% ​​in 2030;
  sustainable aviation fuel – to encourage the production and use of sustainable aviation fuel (SAF), airlines will be required to reduce carbon emissions by gradually implementing SAF. Domestic operators will have to reduce emissions by 1% per year from 2027, peaking in 2037 with a 10% reduction;
• green diesel – the program encourages the production of green diesel, produced from renewable raw materials, and provides for the gradual adoption of this sustainable fuel in the fleet of diesel-powered vehicles throughout the country. According to the text, the CNPE (National Energy Policy Council) will be responsible for establishing, each year (from 2027 to 2037), the mandatory minimum blend of green diesel in diesel, which will be limited to 3%;
• synthetic fuels – proposes the creation of a regulatory framework for synthetic fuels, known as e-Fuel. They are produced from the electrochemical reaction between hydrogen and carbon dioxide. The objective is to encourage domestic production, which could help reduce carbon dioxide emissions, as they are produced using renewable sources, such as biomass;
• carbon capture and storage – the proposal also creates a legal framework for the capture and storage of carbon dioxide. The action must be authorized by the ANP (National Petroleum and Natural Gas Agency). Petrobras will be authorized to carry out the activity.