Raízen’s Vision for SAF Could Transform Brazil into an Aviation Fuel Superpower

In the 1970s, reeling from a global oil crisis, Brazil launched Pro-Álcool, a pioneering program that turned sugarcane into a national fuel staple. Today, as the world faces a dual crisis of geopolitical instability and climate breakdown, Brazil is dusting off its energy-sovereignty playbook for a new, high-stakes arena: the skies.

Sustainable Aviation Fuel (SAF) is no longer a distant green dream; it is becoming a geopolitical and economic imperative. As airlines grapple with the volatility of jet fuel prices, recently underscored by the bankruptcy filing of US-based Spirit Airlines, and stringent new mandates from the EU and UK, the search for a scalable, low-carbon alternative has reached a fever pitch.

A Sleeping Energy Giant

"We often suffer from 'stray dog syndrome' in Brazil," says Raphaella Gomes, CEO of Raízen-Geo Biogás S.A. and one of the country's most influential voices in energy. "We talk too little about our strengths. We treat biofuels as a 'green agenda' item, but it is actually a strategic pillar for industrial development and international trade."

Gomes argues that Brazil is uniquely positioned to fill a massive global supply gap. By 2035, global demand for SAF is expected to hit 50 billion liters. While the US market is likely to be served by domestic production incentivized by protectionist policies, the European and Asian markets are looking for suppliers. Experts predict a 15-billion-liter shortfall in a decade, a gap Brazil is eager to close.

Why Brazil?

The secret lies in what Gomes calls an "integrated agro-energy chain." Brazil isn't just producing fuel; it’s producing it with a carbon intensity that is hard to beat. Brazilian sugarcane ethanol, for instance, has a carbon footprint significantly lower than its international competitors.

But the revolution goes beyond sugarcane. The state of São Paulo has seen its biomethane production skyrocket, reaching 42.7 million cubic meters in 2025—a third of the national total. This "green gas," derived from agricultural waste and urban landfills, can be converted into SAF via "power-to-liquid" pathways.

"Aviation accounts for 2.5% of global CO2 emissions," Gomes explains. "Unlike cars, you can’t easily put a heavy battery on a plane. SAF is the only viable alternative for long-haul flights."

From Necessity to Opportunity

Brazil’s energy journey has always been driven by necessity. Today, the country still imports nearly 90% of its fertilizers and a significant portion of its diesel and liquefied natural gas (LNG). Recent disruptions produced by the US-Iran War and attacks on refineries in Qatar have only highlighted this vulnerability.

However, the same agricultural prowess that makes Brazil dependent on imported fertilizers also provides the "feedstock" for the future. From corn ethanol in the Mato Grosso heartland to biomethane in the outskirts of Campinas, the raw materials for a cleaner sky are already being harvested.

As the Pro-BioQAV (Programa Nacional de Combustível Sustentável de Aviação, in english "National Sustainable Aviation Fuel Program") mandate kicks in 2027, requiring a 1% reduction in aviation emissions, Brazil is moving from intention to action. The goal is to produce 2 billion liters of SAF by 2030. In a world hungry for energy security and decarbonization, Brazil’s "green pre-salt" might just be the fuel that keeps the global economy aloft.

Volkswagen also bets on Brazilian biomethane 

Ricardo Alouche, Vice President of Sales at Volkswagen Trucks and Buses, believes Brazil’s truck market will remain resilient throughout 2026 despite high interest rates, restricted credit conditions, and broader economic uncertainties.

According to Alouche, the federal government's Move Brasil financing program has been a key factor supporting truck sales. 

Looking ahead, Volkswagen is preparing several product launches for Fenatran 2026, Brazil’s largest commercial vehicle exhibition. The company also expects the event to focus more on technology, products, and customer relationships than on discounts and sales promotions, as many buyers are already bringing forward purchasing decisions due to favorable financing conditions.

On alternative propulsion technologies, Alouche highlighted growing interest in electric trucks, biomethane-powered vehicles, and hybrid solutions. All of this is an effort by the automaker to try to find solutions for the fluctuations in the fuel market, which affect those who work in the transportation sector. However, Alouche emphasized that adoption will occur gradually due to infrastructure limitations and cost considerations. Volkswagen is currently testing biomethane trucks in urban sanitation operations and advancing development of its hybrid Meteor truck, which is undergoing advanced testing.

Inpasa Secures R$1 Billion to Expand Corn Ethanol Production in Brazil

Inpasa, one of Brazil’s larger players in corn and sorghum based ethanol, has managed to pull in 1 billion reais (about $173 million) via its sixth debenture issue to help bankroll a big expansion of its industrial complex in Sinop, Mato Grosso.  

The plan is to more or less double the present production ability in Sinop, and, per a filing submitted to the Brazilian Securities and Exchange Commission (CVM), turn the area into the biggest ethanol production hub on Earth. This stretch project is set to add two new units, each one able to produce 1,350 cubic meters of ethanol every day.

SCALING UP RENEWABLES

The total investment for the new facilities is estimated at 1.64 billion reais. Inpasa plans to fund 97.3% of this amount through securities issuances, with the current 1 billion reais debenture offering covering approximately 60.8% of the total project cost.

Beyond biofuel, the new units will also produce corn oil and Distillers Dried Grains (DDGs), a high-protein byproduct used extensively in animal feed. This diversification allows Inpasa to maximize revenue from the grain processing chain in Brazil’s primary agricultural heartland.

FINANCIAL STRUCTURE

The debentures, coordinated by Itaú BBA, were offered exclusively to professional investors. The securities are simple, non-convertible, and unsecured (chirographic), but carry a guarantee provided by JOL Investimentos e Participações — Inpasa paid 3.1 billion reais ($538 million) in dividends in 2025 to JOL Investimentos e Participações, with its primary operational units located in Sinop and Nova Mutum (MT), and Dourados and Sidrolândia (MS).

Following the bookbuilding process, the final interest rate was set at 7.93% per year.

STRATEGIC GROWTH

Founded in Paraguay in 2006, Inpasa entered the Brazilian market in 2018 with its first plant in Sinop. Since then, it has rapidly expanded across the country, with operational units in the states of Mato Grosso, Mato Grosso do Sul, Goiás, Bahia, and Maranhão.

The expansion comes as Brazil sees a surge in corn-based ethanol production, driven by growing global demand for renewable energy and the increasing industrialization of the country’s record corn harvests. If successful, the Sinop complex will consolidate Mato Grosso's position as a global leader in the grain-to-fuel industry.

Why Eduardo Bolsonaro Was Sentenced to Prison by Brazil’s Supreme Court

Brazil’s Supreme Court on Wednesday sentenced former lawmaker Eduardo Bolsonaro, the son of former President Jair Bolsonaro — who is also imprisoned for attempted coup d'état —, to four years and two months in prison for attempting to coerce the judiciary through international pressure.

The 4-0 ruling by the court's first chamber found that Eduardo Bolsonaro used his personal ties with the administration of U.S. President Donald Trump to lobby for sanctions against Brazilian officials, specifically targeting Supreme Court Justice Alexandre de Moraes. The court characterized his actions as "coercion in the course of judicial proceedings," a crime involving the use of grave threats to favor the interests of a defendant, in this case, his father.

LOBBYING FOR SANCTIONS

The prosecution argued that Eduardo Bolsonaro, who moved to the United States in early 2025 and later had his congressional mandate revoked for absenteeism, actively sought to sabotage the Brazilian state. Evidence presented during the trial included his public boasts about influencing the Trump administration's decision to impose 50% tariffs on Brazilian exports and the revocation of visas for several Brazilian authorities.

"It is not the function of a Brazilian federal deputy to lobby abroad against their own country," the court noted, rejecting the defense's claim that his statements were merely "political alerts" rather than threats.

POLITICAL FALLOUT

The sentence, to be served in a semi-open regime, carries significant political consequences. Eduardo Bolsonaro has been declared ineligible for public office until 2038, effectively ending his aspirations to succeed his father as the leader of Brazil's conservative movement in the 2026 presidential race.

Eduardo Bolsonaro, who did not appoint a lawyer and was represented by a public defender, has dismissed the trial as a "political sham" and claimed the court failed to follow due process by notifying him via public notice instead of international legal instruments.

BROADER IMPACT

The conviction marks another blow to the political future of the Bolsonaro family and the Brazilian far-right. Jair Bolsonaro himself was recently placed on trial for an alleged coup attempt following his 2022 election loss. Analysts suggest that Eduardo's removal from the electoral field shifts the spotlight to his brother, Senator Flávio Bolsonaro, as the family’s primary political heir — Flávio's name, in turn, has already been linked to him in the Banco Master scandal, which donated millions of reais to the film Dark Horse, regarding Jair Bolsonaro.

The U.S. government’s use of the Magnitsky Act to sanction the Supreme Court minister Alexandre de Moraes, a move Eduardo claimed credit for, has created unprecedented diplomatic friction between Brasília and Washington, as the Brazilian government views the sanctions as an interference in its internal judicial affairs.

Brazil’s Pragmatic Path to Decarbonization: Beyond the Electric Bus Hype

In the global race to decarbonize urban fleets, the narrative is often dominated by a single, sleek solution: the electric bus. From London to Shenzhen, cities are betting billions on batteries. But in the bustling streets of Goiânia and the industrial heartland of São Paulo, a more "eclectic" and distinctly Brazilian revolution is taking hold. It is a story of pragmatism over dogma, where cow manure and sugarcane waste are challenging the supremacy of the charging plug.

At the end of March, Goiânia launched Brazil’s first fleet of articulated buses powered by biomethane, a renewable version of natural gas. Unlike fossil fuels extracted from deep underground, this "green gas" is harvested from urban waste, livestock manure, and vinasse, a pungent byproduct of ethanol production. It is what local industry insiders humorously call the "redneck pre-salt" (pré-sal caipira), a nod to Brazil’s vast offshore oil reserves, but found instead in the country's agricultural interior.

The ‘Real Brazil’ Reality Check

The shift toward biomethane isn't just about environmental idealism; it’s a response to the "Real Brazil." In São Paulo, the city with the country's largest electric fleet, ambitious electrification targets for 2028 are unlikely to be met. The hurdles are stubbornly concrete: an electric bus costs up to three times more than its diesel counterpart, credit for operators is scarce, and the electrical grid, managed by the embattled utility Enel, a company that is suffering from blackouts and a backlog of complaints, which have fueled pressure for the energy company to lose its concession, especially after blackouts affected thousands of people in São Paulo and caused losses in the billions of reais.

While an electric bus can cost 3 million reais, a biomethane version costs about 1.5 million. For cash-strapped operators still reeling from the pandemic’s impact on passenger demand, this price difference is the deciding factor. Furthermore, while an electric bus requires four hours to recharge and offers a reliable range of 200km, a biomethane bus can be refueled in 15 minutes and travel over 400km, more than enough for a full day’s service.

A Circular Revolution in Goiânia

Goiânia’s case is particularly striking. The state of Goiás does not have a single kilometer of natural gas pipeline. Yet, it is home to 30 major ethanol plants and a massive livestock industry.

By partnering with local producers to build a dedicated biomethane plant, the city has created a circular economy. The buses provide the guaranteed demand that makes the plant viable; the plant, in turn, provides the fuel that keeps the city moving.

The goal is to reach 500 biomethane vehicles by 2027, a 2.5-billion-reais investment that signals a major shift in how Brazilian cities view sustainability.

The ‘Eclectic’ Future

The consensus among manufacturers like Scania and Marcopolo, as well as industry bodies like ANFAVEA, is that the future of Brazilian mobility is not a "silver bullet" solution. Instead, it is "eclectic."

"There is no technology that will dominate," says Igor Calvet, president of ANFAVEA. "Brazil is surprisingly competitive because we have an incredibly renewable energy matrix, 90% of our electricity is clean. The ideal is to unite biofuels and electrification."

This hybrid approach allows for regional specialization. In the Amazon, where the grid is weak, biofuels might lead. In dense urban centers with shorter routes, electric buses remain the long-term gold standard due to their lower daily operating costs, roughly 5,000 reais a month in energy versus 25,000 reais for diesel.

The Certification Bridge

For companies that cannot yet physically access biomethane due to logistical gaps, a new market for "Biomethane Guarantee of Origin" certificates is emerging. Similar to carbon credits, these allow firms to neutralize their emissions by proving an equivalent volume of renewable gas was produced elsewhere in the country.

As Brazil navigates its transition, it is proving that decarbonization doesn't have to be a one-size-fits-all story. It is a mosaic of choices made city by city, route by route, and garage by garage. In the land of the "redneck pre-salt," the path to a greener future is being paved with a healthy dose of Brazilian ingenuity and a lot of agricultural waste.

85% Renewable and Rising: Brazil’s Rio Grande do Sul Unveils a Bold Energy Transition Strategy

Rio Grande do Sul, Brazil’s southernmost state, is positioning itself as a vanguard in the global energy transition, leveraging a highly renewable power grid and a strategic focus on domestic green hydrogen consumption to drive industrial decarbonization.

Speaking at the 6th Renewable Energy Forum in Porto Alegre, Rodrigo Huguenim, Energy Director at the State Secretariat for Environment and Infrastructure (SEMA), highlighted that 85% of the state's electricity matrix is already renewable, led by hydro, solar, and wind power.

GREEN HYDROGEN: THE "MISSING LINK"

The state is betting heavily on green hydrogen as a catalyst for sustainable industrial growth. Unlike other regions focusing primarily on exports, Rio Grande do Sul’s strategy centers on establishing a robust domestic market first.

"Our goal isn't just to export hydrogen as a commodity," Huguenim said. "We want to use it to decarbonize our local industry, such as our massive agribusiness and biodiesel sectors, adding value to our products before they reach international markets with a 'green' seal of approval."

In 2025, the state launched a 100 million reais ($17.3 million) tender to support private-sector green hydrogen projects. Four major companies — Be8, Rodoplast, Tramontina, and Âmbar Sul Energia — were selected to spearhead the state’s first production plants.

STRATEGIC PLANNING AND RESILIENCE

Rio Grande do Sul remains the only Brazilian state with comprehensive energy atlas, mapping all its renewable resources, including wind, biomass, solar, and a newly updated hydro-energy atlas released in 2024.

This data-driven approach is coupled with a renewed focus on infrastructure resilience following the catastrophic floods of May 2024. The state has commissioned a specialized study on energy transmission to identify "neuralgic points" and ensure the grid can support the influx of new data centers, battery storage, and hydrogen projects.

"There is no energy transition without transmission," Huguenim emphasized, noting that the state is working closely with federal agencies like the EPE (Energy Research Office) to coordinate long-term grid stability.

BIOMETHANE AND THE "GAS ERA"

The state also sees biomethane as a critical component of its "energy addition" strategy. Rather than simply replacing fossil fuels, Huguenim argues that the world is entering an era of gases where biomethane and hydrogen will complement existing sources to ensure energy security and cost-effectiveness.

With 40% of its GDP tied to agribusiness, Rio Grande do Sul has a ready-made market for green fertilizers produced via hydrogen and biomethane, potentially reducing the state’s dependence on imported methanol and nitrogen-based inputs.

IBGE Reports Strong Brazil Services Growth as Unemployment Remains Low

Brazil’s service sector output grew by a stronger-than-expected 1.2% in April, fully recovering from the previous month’s decline and signaling robust domestic demand in Latin America’s largest economy.

The result, released on today by the Brazilian Institute of Geography and Statistics (IBGE), significantly outperformed the 0.6% growth forecast as predicted by the Brazilian financial market. On a year-over-year basis, service volume expanded by 1.9%, marking the 25th consecutive month of positive growth.

DISSEMINATED GROWTH ACROSS SECTORS

All five major activities surveyed by the IBGE showed gains in April. The transport sector, which rose 0.9%, was the primary driver of the index. This growth was largely attributed to a 7.0% surge in air passenger transport, which rebounded following a sharp drop in ticket prices (down 14.45% in April after double-digit hikes in previous months).

"April brought a full recovery from the setback observed in March," said Rodrigo Lobo, research manager at the IBGE. "The movement was widespread; while all five sectors retreated in March, they all moved in the opposite direction and grew in April."

Other key sectoral highlights include:

• Tourism: Grew 4.1% in April, recovering a significant portion of the losses from the prior two months. The segment is now 11.2% above its pre-pandemic levels;
• Information and Communication: Rose 6.3% year-over-year, bolstered by strong revenues in software development, IT consulting, and internet hosting services;
• Passenger Transport: Advanced 2.6% month-over-month, though cargo transport saw a slight retreat of 0.9%.

REGIONAL DYNAMICS

From a regional perspective, 14 of Brazil's 27 federative units recorded growth. São Paulo, the country's industrial and financial heartland, was the most significant positive contributor with a 1.4% increase, driven by legal activities, air transport, and auxiliary financial services. Conversely, Rio de Janeiro (-3.6%) and the Federal District (-5.5%) saw the sharpest declines.

ECONOMIC OUTLOOK

The service sector, which accounts for approximately 70% of Brazil’s GDP, is currently operating just 0.3% below its historic peak reached in October 2025.

While the sector remains at an elevated level, economists note that its trajectory lacks a definitive trend, as it navigates a landscape of strong labor market conditions balanced against high interest rates. The accumulated growth for the first four months of 2026 stands at 2.2% compared to the same period last year.

Ibovespa Drops 15% After Hitting an All-Time High in Mid-April

Brazil’s benchmark stock index, the Ibovespa, is undergoing one of its most intense corrections in recent history, completing a record eight consecutive weeks of losses after hitting an all-time high in mid-April.

The index has retreated more than 15% since reaching its historic peak of 199,354 points on April 14. The widespread sell-off has seen the Ibovespa slip below the 170,000-point mark, erasing a significant portion of the gains achieved during a robust first-quarter rally. Despite the recent turbulence, the index remains up 4.68% for the year 2026.

DOMESTIC SECTORS HIT HARDEST

The correction has been broad-based, affecting almost every sector, but companies tied to the domestic economy have borne the brunt of the selling pressure. Retail, construction, and education stocks were among the worst performers as investors fled to more defensive assets amid rising risk aversion.

• Magazine Luiza (MGLU3): The retail giant saw its shares plunge 42.27% since the April peak;
• CSN Mineração (CMIN3): Dropped 37.64%;
• MRV (MRVE3): Fell 32.49%.

In total, 25 stocks within the Ibovespa index have recorded losses exceeding 20% since the record high.

STEEL AND ENERGY SHOW RESILIENCE

In stark contrast to the broader market, a handful of companies in the steel, mining, and energy sectors managed to stay in the green. Only six stocks out of the entire index have posted gains since April 14.

• Usiminas (USIM5): The absolute standout, surging 59.03% during the correction period;
• Gerdau (GGBR4): Rose 9.63%;
• Metalúrgica Gerdau (GOAU4): Gained 7.97%;
• Ambev (ABEV3): Up 1.20%.

The resilience of these heavy industries highlights a significant shift in market dynamics, with commodity-linked stocks decoupling from the domestic downturn.

FISCAL AND INFLATION ALARMS

Market analysts have raised Brazil’s year-end inflation forecast (IPCA) for the 12th consecutive week, according to the latest Focus bulletin. The persistent rise is driven by high oil prices and ongoing geopolitical conflicts involving Iran, Israel, and the United States, which threaten global energy stability.

Of particular concern to investors is the record-high yield on Brazil’s inflation-linked treasury bonds (Tesouro IPCA+).

SECTORAL PERFORMANCE AND GLOBAL CUES

The high-interest-rate environment continues to batter interest-sensitive sectors:

• Real Estate: Shares of homebuilder MRV (MRVE3) plunged 4.64%, leading the market’s declines as the sector "melts" under the weight of soaring borrowing costs.
• Banking: Most major Brazilian lenders traded in the red, with Banco do Brasil (BBAS3) falling 1.84% and Bradesco (BBDC4) dropping 1.55%. Nubank (NU), trading in New York, saw a significant 3.1% decline.
• Tech & Innovation: WEG (WEGE3) was a rare bright spot, rising 3.63% to lead the Ibovespa’s gains.

In the United States, markets showed a slight recovery after recent losses triggered by stronger-than-expected employment data (Payroll), which has cooled expectations for near-term interest rate cuts by the Federal Reserve. The S&P 500 rose 0.30% and the Nasdaq gained 0.86%, supported by a 4.59% surge in Tesla (TSLA.O) and a 1.76% rise in Nvidia (NVDA.O).

Therefore, outside of Brazil, major international indices showed mixed but stable signals:

• NASDAQ: Maintaining key levels at 2,875 and 3,060 points.
• German DAX: Trading within ranges of 24,350 and 25,050 points.
• China: Market activity is expected to pick up during the Asian evening session following recent trade updates.

The continued divergence between the domestic Brazilian market, weighed down by institutional and geopolitical uncertainty, and a more stable global environment remains the central theme for traders as the second quarter of 2026 progresses.

US ECONOMIC AGENDA IN FOCUS

Investors are now shifting their attention to the United States, where the release of existing home sales data is expected to drive further volatility. The U.S. economic calendar also includes trade balance figures and the weekly ADP employment report, which could influence the Federal Reserve's interest rate outlook and, consequently, capital flows to emerging markets like Brazil.

TECHNICAL OUTLOOK

Technical analysts note that the Ibovespa is currently trading below its 9-week and 21-week moving averages, signaling that the selling pressure remains dominant. The Relative Strength Index (RSI) currently stands at 43.61, indicating a neutral zone that has yet to reach oversold conditions on a weekly timeframe.

The challenge now is to regain buyer flow to push the index back toward the 200,000-point mark. But, if the pressure continues, mainly due to the uncertainties (US and Iran war) and scandals involving the far-right presidential candidate Flávio Bolsonaro, who has broad support from the financial market in Brazil — yesterday, the president of the TSE (Superior Electoral Court), Kassio Nunes Marques, appointed to the position by Jair Bolsonaro, suspended an electoral poll that indicated losses for pre-candidate Flávio Bolsonaro after the revelation of audios between him and former banker Daniel Vorcaro, alleging that the poll had manipulated respondents to produce a result unfavorable to Flávio —, the index could test supports at 160,000 or even 150,000 points in the coming weeks.

The market's next major support level is identified at 164,780 points. A break below this could open the door for further declines toward 153,570 points.