Brazil biofuel plan stalled for impact assessments

A plan to boost biofuel use in Brazil has been put on hold, according to Reuters, as the government assesses the potential impact on the economy and industry.

Dubbed RenovaBio, the Brazilian government-led programme would boost the market share of renewable fuels such as ethanol and biodiesel. This would be achieved through mandates for fuel distributors which would obligate them to progressively up the volume of biofuels they sell.

Reuters cites an anonymous government source, who was apparently present at a recent meeting between biofuel producers, the president and others involved in the programme. According to the source, the programme is unlikely to be approved by the Brazilian Congress this year.

Apparently, impact studies still need to be completed before the plan can be put into action. A concern held by Brazil’s Finance Ministry, according to Reuters’ source, is that higher fuel prices as a result of increased biofuel blending could lead to inflation.

To boost the chances of biofuel producers competing with the petroleum industry, the new legislation would mandate increasing minimum volumes of biodiesel and ethanol for fuel distributors to sell. These volumes would be tracked by emissions reductions certificates that can be traded to meet quotas.

RenovaBio is supported by environmental groups in Brazil, but the country’s fuel distribution industry and state-controlled oil company Petrobras have criticised the plan.