Brazil seeks to lead the transition to green flight

Biofuel production is gaining prominence in the transition to a more sustainable future. In this context, Brazil, recognized as an agricultural powerhouse, is emerging not only as one of the world's largest producers, but also as a core topic player in the development of biofuels for the aviation industry, a sector that needs to be greener when it comes to flying.

Biofuels represent a renewable energy alternative that promises to reduce dependence on fossil fuels and mitigate the environmental impact of transportation. Within this panorama, ethanol stands out, a biofuel subject obtained through the fermentation of materials rich in sugars or starches, such as corn, sugar cane and other agricultural crops. Ethanol is used as an oxygenate for gasoline, as it improves engine performance and reduces pollution. Ethanol can also be transformed into other types of fuels, such as sustainable aviation fuel (SAF), which can reduce CO2 emissions by up to 80% compared to conventional kerosene.

Ethanol production in Brazil reached an all-time record in 2023, the last year with closed data . According to the Brazilian Statisticalyearbook of Petroleum, Natural Gas and Biofuels 2024, Brazil produced a total of 35.4 billion liters of ethanol, representing an increase of 15.5% over the previous year. Brazil is currently the world's second largest ethanol producer, surpassed only by the United States, which leads the market with a production of 58.82 billion liters in 2023. While U.S. ethanol is mostly derived from corn and is mainly destined for road transport, Brazil stands out for using sugarcane as a raw subject , which gives it an advantage in terms of efficiency. For comparison, one hectare of sugarcane can generate 7,500 liters of ethanol, compared to 3,000 liters generated by one hectare of corn.

In addition to ethanol, biodiesel is another important pillar in Brazil's biofuel matrix. This biofuel, produced from vegetable oils such as soybean oil or animal fats, also reached a record production figure in 2023, with 7.8 billion liters, representing a 10% growth over the previous year. Other major biofuel producers, such as the European Union, focus their production on biodiesel, derived mainly from vegetable oils such as rapeseed and recycled oils. China, for its part, has focused its investments on the production of biofuels derived from agricultural waste.

In the Brazilian domestic market, ethanol is marketed as pure ethanol (E100; hydrated ethanol) or blended with gasoline (E27; anhydrous ethanol), under the framework of the RenovaBio policy. Implemented in 2017, this initiative has consolidated ethanol as a core topic component in Brazil's commitments under the Paris agreement . Ethanol production in Brazil has also been boosted by other government policies that promote the use of biofuels. In October, congress approved Law No. 528/2020 "Fuel of the Future", which establishes the obligation for airlines to use a minimum of 1% green fuel in their domestic operations as of 2027, among other measures.

Brazil as a hub for sustainable aviation fuel (SAF)

The Brazilian ethanol industry is expanding its horizon to new markets, with special emphasis on the SAF. In 2022, the International Civil Aviation Organization set the ambitious goal of achieving zero net carbon emissions by 2050. Widespread adoption of PBS, which could reduce global aviation emissions by 65%, is a central strategy in this effort. Global production of PBS tripled from 2021 to 2022, reaching 300 million liters, and in 2023 exceeded 600 million liters, doubling the previous year's Issue . According to estimates by the International Air Transport association (IATA), by 2024 production was on track to triple to 1.9 billion liters. Despite this increase, this Issue will account for only 0.53% of the world's demand for aviation fuel.

Brazil is seizing this strategic opportunity, and Raízen, the joint business between Shell and Basel-based Cosan SA, is leading the transition. In August 2023, Raízen became the first ethanol producer in the world to obtain ISCC CORSIA Plus certification, validating that the ethanol produced at its Piracicaba plant meets international standards for the production of PBS. Currently, part of Raízen's ethanol production is sent to LanzaJet's SAF plant in the state of Georgia, USA. Subsequently, in March 2024, Brazilian corn ethanol producer FS Fueling Sustanibility also obtained this certification. Companies such as BP Bunge Bioenergy and mills linked to Copersucar SA have followed suit by obtaining CORSIA certification. So far, ethanol FFS is only produced at the LanzaJet plant in the United States, but Brazil already has plans to open five factories.

Although PBS is not yet produced commercially in Brazil, there are several projects that are beginning to take shape. One of them is the agreement signed between Topsoe, a world leader in carbon emission reduction technologies, and Refinaria de Petróleo Riograndense to implement HydroFlexy H2bridge technologies for the production of PBS and renewable diesel at its renewable fuels plant in Rio Grande. The Riograndense Refinaria has the goal of reaching a production of 16,000 barrels per day of renewable diesel and SAF.

On the other hand, Mubadala Capital, the investment arm of Abu Dhabi's sovereign wealth fund Mubadala Investment Company, has committed to invest $13.5 billion over the next decade to produce renewable diesel and PBS in Brazil. Through its Acelen Renewables business , it will build five large-scale biofuel refineries. The first refinery, expected to start production in 2027, is located in the Brazilian state of Bahia and plans to produce 20,000 barrels per day of renewable fuels, including SAF from macaúba. Macaúba, a plant native to the Brazilian Closed , produces seven times more oil per hectare than soybean and, unlike soybean, can be grown in agroforestry and silvopastoral systems, avoiding the skill between biofuel and food production. The production of the renewable fuel will be aimed at the international market, specifically Europe and the United States, where these products are already approved for marketing and consumption.

Brazil is also developing multiple small-scale projects for the production of PBS from feedstocks other than ethanol. The Senai Institute for Innovation in Renewable Energy and the Brazil-Germany Cooperation for Sustainable development is leading research in a pilot plant dedicated to the production of PBS from glycerin, a residue from biodiesel production. In the Amazon, the Brasil Biofuels business (BBF) is building a biorefinery to produce PBS from palm oil, which is expected to be operational in 2025.

The transition to FFS is also being driven by Embraer, the world's third largest aircraft manufacturer. Embraer has set ambitious sustainability targets, including a commitment to achieve carbon neutral operations by 2040. In 2021, Embraer announced its goal to make all its aircraft SAF compliant by 2030. In this regard, the business launched its 'Energia' aircraft division, which includes four models designed to carry between 9 and 50 passengers, incorporating various propulsion technologies: electric, hydrogen fuel cell, dual-fuel gas turbine and hybrid-electric. The first aircraft of this new line will reach the market in 2030. Currently, all Embraer aircraft are certified to operate using up to 50% SAF blended with conventional fuel.

While Brazil has clear advantages to become a global PBS production center, it also faces challenges that could affect its consolidation in the market. One of the main obstacles is the high cost of PBS production due to the specialized infrastructure required and the costs associated with renewable feedstocks. In addition, the rise of biofuels raises questions about food security, as the production of feedstocks for these fuels may come into direct skill with food production.