For decades, Brazil has operated a model that combines multiple renewable energy pathways at scale to reduce transport emissions. The accumulated experience with ethanol, biodiesel and, more recently, biomethane has positioned the country as one of the international benchmarks in the practical adoption of low-carbon fuels.

This leadership stems from a trajectory that began in the 1970s, when the Brazilian government launched the National Alcohol Program (Proálcool) in response to the oil crisis. The program incentivized ethanol production from sugarcane and supported the development of ethanol-powered vehicles, establishing an industrial base that remains active to this day and has generated broad economic and social benefits. According to the Energy Research Office (EPE), Proálcool was a key driver in structuring Brazil’s ethanol value chain and consolidating a domestic biofuels market.

“While much of the world is still debating which technology will lead transport decarbonization, Brazil has effectively built a hybrid model in practice. Ethanol, biodiesel and now biomethane coexist within the same energy matrix. Few countries have had the opportunity to test so many pathways simultaneously,” says José Eduardo Luzzi, Chairman of the Board of the Instituto MBCBrasil.

Over time, this strategy evolved into an integrated production ecosystem connecting agriculture, the energy industry, the automotive sector and distribution infrastructure. Brazil’s biofuels value chain spans from agricultural feedstock production—such as sugarcane and oilseeds—to industrial processing and final fuel distribution. According to the Ministry of Science, Technology and Innovation, the country has developed a comprehensive value chain for ethanol and biodiesel, integrating agricultural production, industrial processing, logistics and technological development.

Scale as a Competitive Advantage

Today, biofuels play a significant role in Brazil’s transport energy matrix. In 2023, combined ethanol and biodiesel production exceeded 43 billion liters, according to the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis.

This scale is one of Brazil’s key differentiators globally. Unlike pilot-stage initiatives in other markets, Brazil has long implemented mandatory blending policies of biofuels into fossil fuels—an approach that reduces emissions without requiring structural changes to vehicle fleets or fueling infrastructure.

A clear example is the blending of anhydrous ethanol into gasoline, currently set at 30%, alongside the widespread use of hydrous ethanol in flex-fuel vehicles. This model enabled the rapid deployment of flex-fuel technology across the country. Data from Associação Nacional dos Fabricantes de Veículos Automotores indicate that flex-fuel vehicles have represented the majority of light-duty vehicle sales in Brazil since the mid-2000s.

Diversification of Decarbonization Pathways

Beyond ethanol, biodiesel also plays a key role in transport decarbonization, particularly in the heavy-duty segment. The renewable fuel is blended into diesel used by trucks and buses, reducing the carbon intensity of fleet operations.

According to the Ministry of Mines and Energy, Brazil adopts a gradual policy to increase biodiesel blending mandates, aiming to reduce emissions while strengthening the biofuel production chain.

In recent years, new pathways have also gained traction. Biomethane—produced through the purification of biogas from agricultural, industrial or urban waste—has emerged as a renewable alternative to replace fossil fuels in heavy transport. Although Brazil’s potential is significant, domestic production is still considered incipient compared to more mature markets, such as some European countries.

According to the study “Initiatives and Structural Challenges to Drive Low-Carbon Mobility in Brazil by 2040”, developed by LCA Consultores for the Instituto MBCBrasil, biomethane could replace up to 70% of diesel consumption in Brazil’s heavy transport sector by 2040.

The same study indicates that ethanol demand may grow significantly in the coming decades, driven by both domestic market expansion and increasing global demand for low-carbon fuels.

Brazil’s Experience Gains Global Relevance

Brazil’s experience has become increasingly relevant amid energy sector challenges faced by several countries. Oil price volatility and concerns over energy security have led governments to seek alternatives that reduce dependence on fossil fuels.

In the United States, for example, the federal government authorized the expansion of gasoline containing 15% ethanol (E15) during certain periods of the year, as a measure to reduce fuel costs and increase energy supply.

“In the United States, expanding E15 was an emergency measure to address fuel price and supply issues. In Brazil, higher biofuel blends have been part of energy policy for decades. The difference is that here, this is not the exception—it is the rule,” adds José Eduardo Luzzi.

Although still smaller in scale compared to Brazil, such measures illustrate how biofuels are increasingly used as tools to respond to both energy and climate pressures.

Emissions Reduction in Transport

Another factor driving international interest in Brazil’s model is the emissions reduction potential associated with biofuels.

Life-cycle assessment studies indicate that sugarcane ethanol can significantly reduce greenhouse gas emissions compared to gasoline. Research by “Etanol e Bioeletricidade” shows that sugarcane ethanol can reduce emissions by up to approximately 90% relative to fossil fuels. This helps explain why Brazil is often recognized as a reference in international discussions on transport energy transition.

Next Steps in the Energy Transition

Despite the progress achieved, experts highlight that the next phase of Brazil’s energy transition will depend on increased investment and regulatory predictability for emerging technological pathways.

The Instituto MBCBrasil study projects that ethanol production in Brazil could grow by up to 2.4 times by 2040, driven by the expansion of corn ethanol and new biofuel technologies.

At the same time, the development of biomethane and other renewable alternatives will depend on expanding production, transport and distribution infrastructure.

If these conditions are met, Brazil can strengthen its strategic position in the global energy transition—not only as a biofuel producer, but as a leading example of the practical implementation of transport decarbonization solutions.

About the MBCBrasil Institute

The MBCBrasil Institute is a multisectoral organization dedicated to accelerating the decarbonization of mobility in Brazil. Created through the union of companies, industry associations, research institutions, and workers, the Institute’s mission is to translate technical evidence into public policies and promote sustainable mobility solutions. Its work focuses on enabling a viable decarbonization pathway, advancing bioelectricity-related technologies, and supporting a just and inclusive energy transition.

Guided by technological neutrality, the Institute encourages the integration of biofuels, electrification, and new renewable sources—strengthening industrial competitiveness and driving job creation, income generation, and innovation while positioning Brazil as a global leader in the energy transition.

For more information, visit our website and follow the MBCBrasil Institute on LinkedIn and Instagram.

Press Contact

Adriana Monori
+55 61 99999-1900
mbcbrasil@maquinacw.com