Petrobras questions future fuel project – 03/19/2024 – Market

Petrobras will try to change the future fuel bill in the Senate, approved last week in the Chamber of Deputies. The company questions the legal definition of mandates for biodiesel and wants space for the renewable diesel it produces in its refineries.

The schedule for increasing the mixture of biodiesel in diesel is questioned by the oil sector. The approved text foresees an increase of one percentage point per year in the mixture, reaching 20% ​​in 2030. But it gives the CNPE (National Energy Policy Council) the responsibility of evaluating the feasibility of the increase.

“Quotas fixed by law are things that scare me a little”, said the president of the state-owned company, Jean Paul Prates, in an interview given on Monday night (19) to the EPBR agency in Houston, where he participated in an event about the market power.

He claims that the definition of mandates in law removes the government’s flexibility to adjust demand to possible product supply problems. The Chamber’s text also defines a floor of 13% and a ceiling of 25% for mandatory mixing.

Petrobras also complains that the law does not include renewable diesel technology produced in refineries from vegetable raw materials in the program to encourage the use of biodiesel. The technology is already tested by the company in some of its units.

Agribusiness argues that Petrobras’ diesel still contains oil and therefore cannot be compared to biodiesel made entirely from vegetable raw materials.

“Legislation cannot be transformed into an instrument to protect technological routes,” Prates told EPBR. “The whole story of the energy transition has one objective, which is to reduce emissions. And not take people out of the game.”

The president of Petrobras also questioned the goals for the use of biomethane, natural gas produced from vegetable waste or in landfills, a measure also criticized by the fuel-consuming industry.

The text approved by the Chamber provides that gas producers and importers will have to purchase up to 10% of their volumes from these sources, but has not yet established a deadline. Prates says there is a risk that the measure “will not stick”.

He argues that the law needs to be calibrated, under the risk of “getting there, the induction element doesn’t start and you’re stuck in the air, or there’s a shortage, or there’s a crisis, or there’s a supply problem.”

The biomethane banner has been strongly defended not only by agribusiness, but also by automotive manufacturers.

This Tuesday (19), for example, an event by Mcbc (Low Carbon Mobility for Brazil, which brings together a series of automakers) and Esfera Brasil released a study in which it prospected a series of solutions for the decarbonization of the sector and defends the advantages of hybrid vehicles over electric vehicles.

The document, which was also delivered to President Luiz Inácio Lula da Silva (PT), highlights the benefits of biomethane several times and highlights the growth of its production in Brazil.

The study advocates that the fuel be used both in the production of ethanol, but also for green hydrogen and as one of the main alternatives to replace diesel in trucks and machines, one of the main sources of greenhouse gas emissions.

Finally, the document makes a series of proposals for Brazil. The first explicitly defends the maintenance of biomethane within the biofuels bill.

“Ensure the approval of the amendments to PL 4,516/2023 relating to the National Biomethane Program, which are essential to provide the market with regulatory security and guarantee investments that increase supply concomitantly with the growth in demand”, says the text.

Names such as the Minister of Finance, Fernando Haddad, of Transport, Renan Filho, and the president of BNDES (National Bank for Economic and Social Development), Aloizio Mercadante, participated in the event.