Brazilian government to introduce ethanol regulations

The Brazilian government says it will implement new regulations on its ethanol market next month, which will require producers and distributors to implement supply contracts lasting at least one year, in order to avoid shortages and prevent price spikes.

The new regulations are expected to help the government to plan the supply and demand for sugarcane-based fuel and therefore stop ethanol shortages in the future.

The first regulations are expected to relate to anhydrous ethanol – the petrol blend – before other regulations are implemented.

The regulations come after a government legislation introduced in April which changed ethanol’s status from being an agricultural product to a ‘strategic fuel’, which meant the industry would now be monitored by ANP, the Brazilian petrol watchdog.