Brazil’s Top University Proposes ‘Pocket Fabs’ to Reduce Reliance on Global Semiconductor Supply Chains

The University of São Paulo researchers developed a semiconductor manufacturing model which helps Brazil decrease its risks from international political conflicts and worldwide supply chain dependencies. 

The project, created through collaboration with important Brazilian industrial federations, like Fiesp, focuses on developing Pocket Fabs, which are compact automated manufacturing facilities that produce specific products for local markets. The proposal seeks to offer an alternative to the traditional multibillion-dollar “megafab” model that dominates the global chip industry, and creates cartels, as is the case in the US.

Rethinking Scale in Chip Production

The researchers at USP show that semiconductor processing costs remain constant across all plant sizes for each square millimeter of semiconductor processing. The assessment establishes the framework for implementing right-sizing through which manufacturers adjust their production capacity according to specific regional and sector requirements instead of matching their output to compete with major Asian and American manufacturers.

Pocket Fabs will operate under its plan to deliver services mainly to the automotive and aerospace sectors of Brazil which use established certified chip designs that worldwide manufacturers no longer develop.

The project targets a daily production goal between 200 thousand and million chips which researchers consider sufficient to fulfill, for example, the needs of Brazil's automotive industry. The same strategy would be applied to other sectors such as aviation and clean energy generation companies that also need a certain number of chips per year.

Reducing External Dependence

Brazil maintains an annual electronics trade deficit of about $50 billion which matches its expenses for imported chemical materials. Project leaders like Marcelo Knorich Zuffo describe the Pocket Fab strategy as a move toward greater technological autonomy.

"The researchers stated that we reached a point in human development where chip technology now serves as an essential component for global economic progress. The nations that maintain control over this technology will obtain economic advantages during trade disputes which will leave less powerful countries vulnerable", said Zuffo.

According to him, the USP team can develop adaptable production systems for specific industrial sectors by choosing to focus on "additive micromanufacturing" and "heterogeneous packaging" methods.

Automation and Environmental Efficiency

The proposed facilities would also emphasize automation and environmental efficiency. The plants operate as "Green Fabs" because advanced robotics and artificial intelligence systems will handle most of the work in cleanroom settings. The approach enables energy savings through its design which reduces requirements for extensive climate control equipment.

Intel and Samsung Electronics continue to build semiconductor manufacturing plants in the United States and China which creates a framework for this initiative to work within its global industrial context. 

The Pocket Fab model from USP provides decentralized manufacturing through its distributed production network which proponents believe will help developing countries build domestic chip manufacturing capabilities while decreasing their dependence on centralized global supply systems.

Brazil and Biomethane: Renewable Gas Gains Strategic Ground as Minas Gerais Advances Regulation and Industry Scales Up

Brazil's biomethane industry is poised for significant growth, driven by increasing decarbonization pressures and recent regulatory advancements, particularly in the state of Minas Gerais. The renewable gas, produced from organic waste, is emerging as a strategic asset in the country's industrial decarbonization efforts, offering a pragmatic solution for sectors heavily reliant on fossil natural gas.

Biomethane's compatibility with existing gas infrastructure presents a decisive advantage for hard-to-electrify industries such as ceramics, glass, food processing, paper, and chemicals, allowing them to cut emissions without immediate equipment replacement.

Several factors are accelerating the biomethane market in Brazil, including growing pressure for decarbonization targets, rising demand for circular economy solutions, energy security concerns, and the volatility and higher costs of fossil gas. Unlike other clean energy alternatives, biomethane can often be injected directly into existing gas grids, reducing transition costs and operational disruption.

Brazil possesses significant structural advantages for biomethane production, combining large-scale agribusiness, a robust sugarcane industry, extensive urban waste generation, and an expanding gas market. Feedstocks like vinasse, filter cake from sugar-energy operations, livestock waste, industrial effluents, and municipal solid waste offer substantial technical potential, though current production remains below estimated capacity.

Despite a growing pipeline of projects, the sector faces challenges, including limited connection to gas distribution networks in some producing regions, high upgrading and purification costs for small-scale plants, and the need for long-term supply contracts to ensure price predictability. Regulatory fragmentation at the state level also poses a hurdle, risking isolated development rather than systemic scale.

A major step forward occurred on February 9, 2026, with the publication of Decree No. 49,172 by the Minas Gerais government. This regulation establishes operational guidelines for biogas, biomethane, and low-carbon hydrogen policies, alongside rules for sharing and integrating gas infrastructure. The decree implements State Laws 24,396/2023 and 24,940/2024, providing clearer frameworks for licensing, commercialization, certification, environmental standards, and economic incentives.

Minas Gerais currently boasts 453 million Nm³ per year of installed biogas capacity across 359 operational facilities, representing approximately 10% of national production. In 2025, the state inaugurated its first biomethane plant, operated by Zeg Biogás in Tupaciguara, with an investment of BRL 78.6 million. Two additional biomethane units are under authorization in Sabará, with a combined capacity of 108,000 Nm³ per day.

The decree also advances low-carbon hydrogen policy, detailing technical standards, certification mechanisms, and economic incentives to expand hydrogen's role in heavy industry, mobility, and energy storage.

Industrial investment is also expanding. MAT, a Brazilian manufacturer of gas cylinders and trailers, reported record revenues exceeding BRL 30 million last year from compression systems and accessories. Approximately 70% of the equipment sold in 2025 was for biomethane compression, storage, and transport. According to data from the International Center for Renewable Energy (CIBiogás), Brazil had 79 biomethane plants in 2025 (54 operational, 25 under implementation), with biomethane supply expanding 107% during the year.

MAT is now considering local production of compressors, currently imported from Italy, which could facilitate financing through Brazil’s Finame machinery credit program.

Biomethane's appeal in Brazil rests on three strategic pillars: immediate emissions reductions using available technology, valorization of environmental liabilities through waste recovery, and lower operational disruption compared to alternative decarbonization pathways. If infrastructure gaps and regulatory harmonization challenges are addressed, Brazil could become a global leader in renewable gas production. The market's maturation speed will be crucial, but the convergence of industrial competitiveness, circular economy, and energy transition suggests that renewable gas is moving to the core of Brazil’s low-carbon strategy.

Brazil Expands Biomethane Trucks as Renewable Gas Production Surges

Brazil is rapidly expanding its biomethane-powered heavy-duty vehicle fleet and production capacity, positioning the renewable gas as a key component in its energy transition and transport decarbonization strategy.

Biomethane output in São Paulo state alone is projected to surge by 50% in 2026 with the launch of seven new biogas plants, according to industry projections. This expansion is bolstering Brazil's renewable natural gas (RNG) infrastructure and aims to reduce reliance on diesel in freight transportation.

Swedish manufacturer Scania, an early entrant, is now facing competition from Chinese automaker JAC Motors, which is introducing new gas-powered heavy trucks. Brazilian logistics firm Green Cargo plans to deploy between 150 and 200 biomethane trucks over the next 12 months, partnering with major corporations including JBS, Suzano, Veracel, and Eldorado for vehicle validation.

Volkswagen Caminhões e Ônibus is also contributing, with its new Constellation Biomethane model joining the fleet of EcoUrbis, a São Paulo waste management concessionaire. The vehicle, customized for solid waste collection, can cut CO2 emissions by up to 90% compared to diesel models, the manufacturer stated.

In a significant investment, Brazilian engine maker MWM and Vamos Group, a leading truck and machinery rental company, are jointly investing 150 million Brazilian reais ($30 million) in a project to convert diesel trucks to operate on biogas. Vamos plans to deliver the first 100 converted units to Rio de Janeiro's municipal sanitation company, Comlurb, in the first quarter.

Experts highlight biomethane's strategic role in energy security, as it is domestically produced from local waste streams, offering stability against geopolitical factors affecting fossil natural gas. Academic research is focusing on upgrading biogas to biomethane and integrating plants into circular bio-refineries, further supporting technological development and sustainability standards.

Strategic Benefits of Biomethane

• Energy Security: Biomethane is domestically produced from local waste, reducing dependence on imports and geopolitical factors
• Economic Impact: Stabilizes energy prices, supports rural development, and creates qualified jobs
• Environmental: Reduces nitrate pollution, minimizes odors, and provides biofertilizer from digestate

Scale Considerations: Medium-sized biomethane plants offer the optimal balance between efficiency and environmental management. Small plants in small cities sometimes lack technical expertise or lack of qualified professionals in Brazil, while very large facilities face logistical challenges.

Transportation Applications: Biomethane trucks reduce greenhouse gas emissions while maintaining performance comparable to diesel vehicles. When produced at scale, biomethane can be price-competitive with fossil natural gas.

Brazil's Strategy

As Brazil expands biomethane production, renewable gas is becoming central to the country's decarbonization strategy, connecting waste management, energy independence, and sustainable freight transport.

US-Argentina Beef Deal Sparks Mercosur Tensions, Trade Bloc's Future Uncertain

A recent decree signed by former U.S. President Donald Trump, increasing Argentina's beef import quota with reduced tariffs, has ignited a diplomatic firestorm, raising questions about the future of the Mercosur trade bloc and drawing sharp criticism from Brazil and U.S. agricultural sectors.

The decree, part of a broader trade and investment agreement inked on February 5 between the United States and Argentina, will see the U.S. import 80,000 tons of Argentine beef by 2026. The stated aim is to lower meat prices for American consumers amidst persistent food inflation, a sensitive political issue in the U.S.

However, the measure has been met with skepticism regarding its economic impact. Analysts suggest the gains might primarily benefit food companies and processors, with limited effect on final consumer prices. Last year, U.S. imports of Argentine beef totaled 33,000 tons, representing only 2% of total U.S. beef imports, indicating a potentially minor inflationary impact.

Domestically, the U.S. livestock sector has voiced strong opposition. Senator Deb Fischer of Nebraska, for instance, criticized the Trump administration for not focusing on reducing bureaucracy and internal costs to expand the national herd as an alternative to increased imports.

Mercosur's Integrity Challenged

The agreement's most significant repercussions are felt within Mercosur, the South American trade bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Bolivia. Critics argue that Argentina's bilateral deal with the U.S. violates Mercosur's foundational rules, which typically require member states to negotiate trade agreements collectively.

José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), condemned the agreement, stating it “encourages a lack of legal norms in the international market and, above all, commits an illegality.” He warned that such an agreement could effectively dismantle Mercosur and jeopardize the recently approved Mercosur-European Union trade deal.

De Castro further elaborated that if Argentina and potentially Uruguay (with China) pursue individual trade agreements, Brazil might follow suit, leading to the fragmentation of Mercosur markets. He highlighted that Argentina is Brazil’s second-largest market for manufactured goods, and this agreement could divert that market to the U.S.

Brazilian diplomats are currently assessing whether the U.S.-Argentina pact exceeds Mercosur’s limits for bilateral agreements with third countries. Brazilian media have already reported anout Brazil’s concerns regarding the scope of the deal. Mercosur rules restrict individual trade agreements to preserve the bloc’s collective bargaining power, though exceptions are granted. Argentina claims its tariff reductions with the U.S. fall within these exceptions, a stance disputed by Brazilian officials who suspect the agreement’s scope is broader than permitted.

Milei’s U.S. Alignment and Mercosur’s Future

Argentine President Javier Milei’s government has consistently signaled a strong alignment with the United States, prioritizing this relationship even if it creates friction within Mercosur. This approach echoes historical debates within Argentina, dating back to the Menem and Macri administrations, about balancing Mercosur commitments with closer ties to the U.S.

Despite the controversy, the Argentine Chamber of Deputies recently approved the Mercosur-European Union free trade agreement, sending it to the Senate for ratification. This agreement, negotiated for over 25 years, still requires ratification from all Mercosur member parliaments and the European Parliament.

The next Mercosur summit, scheduled for late June in Asunción, is expected to be a critical juncture where Brazil may formally raise its concerns about the U.S.-Argentina deal. The outcome of these discussions will likely determine the extent of the impact on Mercosur’s cohesion and its future as a unified trade bloc.

Brazil's Agro-Industrial Leap: Sugarcane, Bio-Inputs & EU Trade Fuel Economic Diversification

Brazil, a dominant force in global agriculture, is strategically pivoting to elevate its agro-industrial sector beyond raw commodity exports. The nation is drawing on its deep-rooted experience with sugarcane, particularly the public-private collaborations that propelled its 1970s ethanol program (Proálcool - Programa Nacional do Álcool), as a model for this sophisticated economic transformation.

Sugarcane cultivation, a cornerstone of Brazil's economy since colonial times, fostered extensive technical expertise. This culminated in the federal Proálcool program, initiated during the 1970s oil crisis. The government-backed initiative, embraced by private producers, scaled up sugar production into a robust ethanol manufacturing industry.

Today, advanced sugarcane mills, notably in São Paulo's Ribeirão Preto region, operate as integrated industrial hubs. Now, the sugarcane fields in São Paulo are harvested through a mechanized process, using leading edge technologies such as high-tech machinery, ultra-precision GPS etc. 

Beyond sugar and first-generation ethanol, these facilities now produce second-generation ethanol and various byproducts. Operations are highly automated, featuring advanced milling systems, industrial motor reducers, distillation units, laboratory controls, and digital monitoring. This technological sophistication has fueled demand for domestic machinery, engineering services, and specialized industrial equipment, reinforcing a broad national supply chain.

Brazil’s biological crop input sector, for example, is expanding rapidly, with annual growth rates far outpacing the global average, positioning the country as a leader in adoption and innovation, industry representatives said.

According to data from CropLife Brasil, Brazil’s market for biological inputs, including biofertilizers and biopesticides, has been growing at roughly 22% per year as of 2025, four times the global rate. Treated crop area increased 15% in the latest harvest season, with adoption rates reaching about 35%, compared with around 10% in many other countries.

Unlike Europe and the United States, where biologicals are often concentrated in protected crops, Brazil deploys these products across large-scale open-field farming, including grains, sugarcane and cotton. While Europe remains the largest market by revenue, followed by the United States, Brazil ranks third globally in sales but leads in field-level adoption and tropicalized technology, industry officials said.

Brazilian companies have developed formulations adapted to high temperatures and environmental pressure, giving them a competitive edge in tropical agriculture. Through a partnership with ApexBrasil, CropLife Brasil has launched an initiative to promote Brazilian bioinput technology abroad. The project, approved by the federal government, earmarks 5 million reais over 18 months to strengthen the country’s image as a technology exporter, not just a commodity supplier. Target markets include the United States, Chile, Argentina and Mexico, with promotional activities set to expand in 2026.

The surge in adoption was initially driven by pest outbreaks such as Helicoverpa armigera, which prompted farmers to integrate biologicals into resistance management strategies. Environmental concerns and demand for regenerative agriculture have since reinforced the trend.

Industry-wide agricultural input revenue in Brazil totaled 114 billion reais in the latest annual survey, including chemicals, seeds and biologicals. Of that, biologicals accounted for 4.5 billion reais in 2024, representing a small but fast-growing share of the market. The segment expanded 30% over the past two years, even as the broader input industry contracted.

CropLife Brasil recently launched “Crop Data,” a public online platform consolidating information on revenue, credit, taxation, research investment, employment and product registrations. The portal shows that 135 biological products had been registered in 2025, up from 114 a year earlier. Approval timelines for new biological products range from 18 months to two years.

Rural credit under specific financing modalities linked to sustainable practices rose about 70%, offering farmers greater planning stability amid broader credit constraints. More than 60% of workers in the agricultural input industry hold university degrees and earn, on average, three times Brazil’s national income level, according to sector data.

Executives expect continued growth into 2026, supported by 133 million reais in recent sector investments and a pipeline of new product launches. They emphasize that biological inputs are science-based technologies comparable in infrastructure and quality standards to pharmaceutical manufacturing, and urge farmers to use registered products and follow agronomic recommendations to ensure effectiveness.

Economists suggest the technological advancements within Brazil's sugar-energy and biological crop industries offer a scalable blueprint for other agribusiness segments, including soybeans and corn. Rather than solely exporting raw commodities, Brazil could expand domestic processing into higher-value products such as prepared animal feed, plant-based proteins, and nutraceutical ingredients. This shift promises to boost export revenues and enhance income elasticity in international markets.

Industry stakeholders also identify significant opportunities in agricultural machinery and precision agriculture services. While Brazil hosts companies like Jacto, analysts contend the country could significantly expand its footprint in farm equipment and components, intensifying competition with global manufacturers such as John Deere.

Given current economic realities, advocates for agro-industrialization assert that Brazil should prioritize sectors where it holds inherent comparative advantages. The success of sugarcane ethanol serves as a compelling precedent, demonstrating how coordinated state action and private enterprise can transform a primary commodity into a high-value industrial ecosystem. 

Beyond that, the landmark trade agreement between Mercosur and the European Union is being hailed as a "win-win" scenario that promises significant benefits for both blocs, according to Caio Carvalho, vice-president of the Brazilian Agribusiness Association (ABAG).

The deal, encompassing a market of 720 million people and a combined GDP of $22 trillion, is more than a commercial pact; it is a geopolitical and economic milestone. For the EU, it offers a strategic partnership amid rising tensions between the U.S. and China. For Mercosur, particularly Brazil, it marks a crucial step away from economic isolation, opening up new avenues for trade and investment.

Key Brazilian agricultural products poised to benefit include beef, soy, ethanol, and biofuels. The agreement is also seen as a strategic hedge for Brazil against geopolitical risks and trade dependencies on single partners like China or the United States. By aligning with the EU, a global standard-setter, Mercosur can enhance its competitive edge and play a more prominent role in shaping global trade rules.

Brazil’s Energy Plan: Biofuels Supply to Surge by 2035

Brazil expects significant growth in biofuel production over the next decade, which will occur because of regulatory requirements and technological advancements and increasing demand from both local and international markets. The Brazilian government issued its 2035 Ten-Year Energy Expansion Plan (PDE 2035) through the Energy Research Company (EPE), which shows that biofuel production will increase because of three driving forces: regulatory requirements and technological advancements and increasing local and international market demand.

The report outlines projections for ethanol, biodiesel, sustainable aviation fuel (SAF), renewable diesel, biogas, biomethane and sugarcane-based bioelectricity through 2035, positioning biofuels as a central pillar of Brazil’s low-carbon transition strategy.

Ethanol Output to Reach 50.5 Billion Liters

The total ethanol supply is expected to increase at an annual rate of 2.9% from 2025 until 2035, which will lead to a total supply of 50.5 billion liters at the end of that time period.

Sugarcane ethanol will remain the main fuel source While corn ethanol is projected to produce more than 30% of total fuel production by 2035. Second-generation ethanol (E2G) production is forecast to reach 1 billion liters annually.

Ethanol demand within the United States will grow at 2.9% annual growth rate because of the following factors:

• Greater competitiveness of hydrous ethanol versus gasoline
• RenovaBio decarbonization credits (CBIOs)
• Increased flex-fuel vehicle consumption

The market share of hydrous ethanol in flex-fuel vehicles will increase to 52% by 2035, which represents a growth from 39% that was recorded in 2025.

Brazil will boost its net ethanol exports from 1.2 billion liters in 2025 to 1.84 billion liters in 2035, which will happen because of decarbonization policies established by the United States and European Union and Asian countries.

The "Fuel of the Future" law permits gasoline ethanol blending to occur between 22% and 35% while the law includes scenarios that assess the possibility of increasing the blends to E30 and E35.

Biodiesel Mandates Drive 40% Demand Growth

The biodiesel market will require 13.9 billion liters of fuel by 2035, which includes maritime shipping, and this figure represents a 40% increase compared to 2025 numbers. 

Brazil currently requires a 15% biodiesel blend in diesel fuel (B15), while the National Energy Policy Council (CNPE) has the authority to increase blending requirements up to 25% through existing legislation. 

The installed production capacity will reach 16.2 billion liters by 2035, which exceeds mandatory requirements and creates possibilities for freight and agriculture and shipping to use extra volume. 

Soybean oil will continue to serve as the main feedstock, while efforts to diversify feedstock sources will begin  through the development of new oilseeds and support of family farming through Brazil's Social Biofuel Seal (SBS) program.

Biodiesel Mandates Drive 40% Demand Growth

Biodiesel demand is projected to reach 13.9 billion liters by 2035 when including its use in maritime transport which represents a 40% increase from 2025 levels.

Brazil requires a 15% biodiesel blend for diesel fuel which is known as B15 but its legislation permits the National Energy Policy Council to increase blending requirements up to 25%.

The installed production capacity is expected to achieve 16.2 billion liters by 2035 which creates excess supply beyond mandatory requirements and enables potential growth for voluntary usage throughout freight operations and agricultural activities and maritime shipping.

Soybean oil will continue to serve as the main feedstock while efforts to diversify feedstock sources will proceed through the introduction of additional oilseeds and the development of family farming initiatives under Brazil's Social Biofuel Seal program.

Biomethane Emerges as Major Decarbonization Vector

Biomethane is identified as one of the fastest-growing segments in Brazil’s bioenergy matrix.

The report estimates that biomethane production from sugarcane residues alone could reach 3.3 billion cubic meters annually by 2035, covering up to 30% of diesel consumption in Brazil’s agricultural sector.

When broader agricultural, livestock and urban waste residues are included, technical potential exceeds 170 billion cubic meters annually. A more conservative estimate suggests 35 billion cubic meters could be viable by 2035 — enough to replace roughly 50% of Brazil’s fossil diesel consumption.

Government incentives, including tax exemptions under REIDI and CBIO generation under RenovaBio, are expected to improve project economics.

Bioelectricity and Advanced Fuels

Installed sugarcane biomass power capacity reached 12.7 GW in mid-2025, with further export potential to the national grid.

The plan also highlights expansion prospects for:

• Sustainable Aviation Fuel (SAF)

• Renewable diesel (including co-processing routes)

• Carbon capture and storage (Bio-CCS)

• Low-carbon hydrogen

Brazil’s new “Fuel of the Future” law mandates up to 3% renewable diesel blending, with voluntary higher participation allowed upon regulatory notification.

Strategic Role in Energy Transition

EPE states that biofuels are critical to Brazil’s strategy for reducing greenhouse gas emissions, enhancing energy security and maintaining leadership in global renewable energy markets.

The country already supplies approximately 50% of internationally traded sugar and remains one of the world’s largest ethanol producers.

Investment in bio-refineries, feedstock diversification and integration with carbon markets are expected to define the next phase of Brazil’s bioenergy expansion.

Petrobras (PETR3; PETR4) Hits Record Output in 2025, Boosts Exports 27% as Pre-Salt Drives Growth

Petrobras (PETR3; PETR4) reached its highest oil and gas production levels in 2025 when the company produced almost 3 million barrels of oil equivalent every day because it expanded its pre-salt field operations and started using new offshore platforms. 

The company reported average annual operated production of 2.99 million boed in 2025, which represented an 11 percent increase from the previous year. Total production reached 3.081 million boed in the fourth quarter, which marked an 18.6 percent year-on-year increase but experienced a 1.1 percent decline from the third quarter because of planned maintenance work at Campos Basin platforms including Marlim and Voador.

The fourth quarter production report showed that pre-salt output contributed 82 percent of total production, which highlighted the deepwater assets of Santos Basin as a critical operational resource. The full-year pre-salt production increased 11.4 percent from the previous year to reach 2.45 million boed.

Petrobras' flagship deepwater project in Búzios, Rio de Janeiro, reached a production level of 1 million barrels per day in October, which increased its installed capacity to approximately 1.15 million bpd. The newly installed FPSO Almirante Tamandaré platform, which holds the record as the largest platform to operate in Brazil, generates approximately 240,000 bpd while P-79 unit is projected to produce an additional 180,000 bpd of capacity.

Reserve Replacement at 10-Year High

Petrobras achieved its best reserve replacement results during the past ten years, while the company produced its highest operational output. In 2025, the company expanded its proven reserves by 1.7 billion barrels of oil equivalent, which resulted in a reserve replacement ratio (RRR) of 175%. The reserve life index stands at 12.5 years.

The production gains resulted from the installation of eight new offshore wells and enhanced operational efficiency, which increased by 3.6 percentage points compared to 2024.

Oil Exports Surge, China Leads Demand

The country achieved its highest export record through increased oil production. The country exported 765000 barrels per day of crude oil during 2025 which represented a 27 percent increase from the previous year. The exports in the fourth quarter reached 1.236 million barrels per day which represented a 78.6 percent increase compared to the same period last year with China accounting for 52 percent of total shipments.

Petrobras established extended supply agreements with Indian state refiners which will remain active until March 2027 and allow for the delivery of 60 million barrels of crude oil.

Refining Output Falls

Refining output decreased by 6.4% to reach 1.702 million bpd in the fourth quarter because upstream production experienced growth. The total utilization rate of refineries fell to 89% down from 95% a year earlier because maintenance stoppages and expansion works at the Henrique Lage refinery (Revap) in São Paulo which will increase distillation capacity by 19,000 bpd once completed.

Shares Rise as Ibovespa Hits Record

The Brazilian stock market reached its highest point in history as Petrobras achieved exceptional operational results which brought the Ibovespa index to 189400 points during morning trading. This increase of 1.87 percent resulted in both common and preferred shares of the company reaching an increase of more than 2 percent.

The Citi analysts found that fourth-quarter operational results met their expectations despite the decline in international oil prices and the minor production decrease during that quarter. The bank maintains a neutral rating on Petrobras ADRs with a $12.50 price target, projecting lower short-term EBITDA and more modest ordinary dividends.

Banco Safra and Itaú BBA expect fourth-quarter EBITDA to decline 9% and 12%, respectively, citing a 7% drop in oil prices during the period.

Concerns Over Exploration Slowdown

The industry groups point out that Brazil needs to speed up its exploration activities because the country relies on both its current output and its reserve increases to safeguard its energy supply for future needs. The Institute for Strategic Studies of Oil Gas and Biofuels (INEEP) reported that the period from 2016 to 2025 saw the drilling of 203 wells whereas the time between 2006 and 2015 produced 936 wells. 

The United Federation of Oil Workers (FUP) stated that Brazil requires urgent expansion of its oil reserves to maintain its position as a global leader in oil and gas markets which they believe requires increased funding for exploration of new frontier regions while the nation moves forward with its energy transition plans.

Energy Transition: Natura (NATU3) Embraces Biomethane Amidst Brazil's New Regulations

The new Brazilian rules for biomethane implementation which various industries now use as a replacement for natural gas fossil fuels will drive both energy transition progress and business carbon reduction activities.

The Brazilian federal government completed its biomethane policy regulations through the Fuel of the Future program in September 2025, which will enable the country to increase its renewable gas production for domestic use. The policy establishes an initial requirement for 1% biomethane blending in 2026, which can increase to 10% through future regulations that will apply to both natural gas producers and importers. 

Biomethane is a renewable energy produced from organic waste such as agricultural residues, food waste and animal manure. The materials are processed through anaerobic digestion, in which microorganisms break down organic matter in oxygen-free tanks, generating biogas composed mainly of methane and carbon dioxide. This biogas is then purified, or upgraded, to produce biomethane suitable for energy use.

It produces energy with the same efficiency as natural gas while emitting virtually no carbon emissions because its combustion emissions get canceled out by the carbon dioxide which plants capture during photosynthesis.

With this new regulatory framework, Brazil will establish yearly decarbonization benchmarks which will transform the country energy system by increasing renewable gas usage throughout transportation systems industrial operations and electricity production sectors.

One example of thar is the Brazilian cosmetics company Natura (NATU3) which opened a biomethane refueling station at its Cajamar industrial site located near São Paulo through its collaboration with Ultragaz. The project aims to cut logistics-related emissions, particularly Scope 3 emissions generated by outsourced transport operations.

The initiative operates 28 trucks that move goods between the Cajamar plant which generates 90 percent of Natura's domestic production and regional distribution centers using only biomethane as fuel. The fleet is operated by logistics companies Coopercarga and Reiterlog.

Natura plans to achieve a 42 percent reduction of its Scope 3 emissions by the year 2030. The biomethane system operates at a refueling rate of 2,000 cubic meters per hour. The company plans to receive returns on its investment within two years although it has not released specific investment amounts.

Ultragaz will supply 3.5 million cubic meters of biomethane per year to Natura, enough to power roughly 17,500 households. The project benefits the environment by decreasing the company carbon emissions which leads to lower business expenses according to Angela Pinhati who is the sustainability director at Natura.

The initiative has the potential to motivate companies to start investing in biomethane although the absence of a national distribution system which connects production areas to customers presents infrastructure problems.

The biomethane which Natura receives comes from the Caieiras landfill, which stands as the biggest landfill in Latin America because it receives organic material from the Cajamar waste processing center. The facility generates approximately 350,000 cubic meters of biomethane each day, with Ultragaz distributing 67,000 cubic meters of this total daily.

The current production of biomethane in São Paulo state results in 16% of its total output coming from landfills according to state authorities, which demonstrates how this fuel supports circular economy systems while helping to decrease greenhouse gas emissions throughout Brazil.

Pump action: Brazil’s green-fuelled ambitions

Brazil has established itself as a global leader in renewable energy production. The country’s energy system, which includes massive hydroelectric dams as well as wind and solar power, along with extensive sugarcane and corn ethanol production and soybean-based biodiesel, serves as a model for nations that still rely heavily on carbon-based fuels. As the global race to decarbonize reaches a critical stage, Brazil continues to achieve new milestones. This week, the National Congress formed a “Coalition for Biofuels” aimed at turning energy transition goals from political discourse into concrete public policies.

The Brazilian Congress chose to pass its decision at the week Toyota announced its first global research center about biofuels which will be established in Sorocaba, São Paulo. The automaker plans to invest BRL 11.5 billion in the country until 2030 through this initiative which will create 40 engineering positions to develop technologies that will decrease vehicle greenhouse gas emissions. Toyota has selected a hybrid flex-fuel engine strategy which combines ethanol and biomethane because the company believes these two technologies will provide environmentally friendly solutions in agricultural and industrial applications while its competitors pursue complete electrification.

The environmental advocacy group 

The coalition which received support from multiple parliamentary organizations and leading agricultural companies functions as more than a discussion platform. The organization needs to manage the "Future Fuel Law" (Combustível do Futuro) which serves as Brazil's main environmental legislation for the transportation sector. The coalition's leader Arnaldo Jardim who has worked in agribusiness advocacy describes the current situation as an emergency situation which needs immediate treatment. For Mr Jardim and his colleagues, biofuels are not merely an environmental boon but a "strategic vector" for national development.

Street driving regulations

Investors consider predictable results to be their most important requirement. The coalition wants to establish a "growth curve" for renewable energy sources through its long-term plan which will gradually decrease fossil fuel usage. The process involves more than just establishing objectives. The Future Fuel Law aims to ensure that the transition is not subject to the whims of changing administrations, providing the legal security needed to unlock long-term capital in the agro-industrial sector.

Protecting the patch

The coalition’s agenda is as much about protectionism as it is about the planet. The organization intends to prohibit or considerably decrease biodiesel imports as its first task because this measure will create a market where only domestic manufacturers can sell their products. The group aims to establish a self-sustaining system through its efforts to connect energy production with industrial activities and agricultural practices. The environmental case is compelling, biodiesel can cut greenhouse-gas emissions by almost 80% compared with its fossil-fuelled cousin, but the economic logic of supporting a homegrown industry is equally persuasive in the halls of Congress.

Global ambitions

Brazil also aims to become a worldwide leader in the green-fuel revolution by establishing a strong regulatory framework. The proposed creation of a National Fund for Energy Transition suggests that the government is willing to put its money where its mouth is. Brazil will establish itself as a pioneer in sustainable development instead of following global sustainability trends if the coalition achieves its objectives. Brasília is making a significant investment in pump technology because it sees this as a crucial element in the worldwide energy transition process.

BNDES Approves BRL 148.5 Million for Biomethane Plant in Paraná, Boosting Brazil’s Energy Transition

Brazil's National Development Bank (BNDES) granted Bioo Paraná Holding BRL 148.5 million to construct a biomethane facility in Toledo Paraná which will enhance Brazil's renewable energy initiatives and circular economy development. The total project cost is estimated at BRL 196 million, with BRL 101.5 million from the Climate Fund and BRL 47.1 million through BNDES's Finem credit line.

Biomethane Production and Emissions Reduction

The facility will produce 11 million cubic meters of biomethane annually, equivalent to natural gas, and is expected to avoid about 80,000 tons of CO₂ emissions each year, aiding Brazil's decarbonization goals. The facility will produce organic fertilizer which will benefit local agricultural operations, while it will also create biogenic CO₂ which can be used by industries such as beverages to decrease their need for fossil-based CO₂.

Jobs and Regional Development

The project will create approximately 210 construction jobs and 90 permanent positions which will help western Paraná develop because it serves as an essential agribusiness and animal protein center. Bioo uses its circular economy initiative to convert animal protein supply chain organic waste into valuable bioproducts which reduce environmental harm while returning waste to productive use. The BNDES President Aloizio Mercadante declared that "this project minimizes the negative impacts of organic waste by converting it into renewable energy and high-value products," which supports the energy transition policy of the federal government.

Circular Economy and Energy Policy Alignment

Bioo Paraná Holding S.A. operates as a subsidiary of Bioo Investimentos e Participações S.A. which Cótica Energia and the eB BIP investment fund managed by Flying Rivers Capital control. The BNDES support enables the company to advance its strategy which converts organic waste into renewable energy and bioproducts according to CEO Maurício Cótica. The BNDES support enables the company to advance its strategy which converts organic waste into renewable energy and bioproducts according to CEO Maurício Cótica.

Paraná to Host Its First Corn Ethanol Plant as Coamo Invests R$1.7 Billion

Paraná is poised to enter Brazil's burgeoning corn ethanol sector in 2026, with Coamo Agroindustrial Cooperative spearheading the establishment of the state's first corn-based ethanol facility. Located in Campo Mourão, about 90 kilometers from Maringá, this R$1.7 billion project is currently in the land preparation stage, with completion expected in the latter half of 2026.

Job Creation and Production Capacity

During construction, the plant is projected to create approximately 2,200 direct jobs, transitioning to about 250 permanent positions once operational. Coamo sources around 3 million metric tons of corn annually, dedicating 500,000 to 600,000 tons for ethanol production. The facility will process 1,700 tons of corn daily, yielding around 765,000 liters of ethanol.

Byproducts and Renewable Energy

In addition to ethanol, the plant will produce valuable byproducts, including:

• 510 tons/day of DDGS (Distillers Dried Grains with Solubles) for animal feed.
• 34 tons/day of corn oil for biodiesel and industrial applications.

The ethanol complex will utilize thermal power generated from eucalyptus sourced from Coamo’s 5,000-hectare reforestation areas, achieving self-sufficiency by generating 30 megawatts of electricity to meet its energy needs.

Context of Corn Ethanol in Brazil

With 24 corn ethanol plants currently operational in Brazil (11 exclusively dedicated to corn) the sector plays a vital role in stabilizing fuel supply, especially during the sugarcane off-season in the Center-South region.

Recent Trends in Ethanol Production

Data from UNICA indicated that the Center-South processed 605,090 tons of raw material in early January, with total sugarcane crushing reaching 601.04 million tons, reflecting a slight decline from the previous year. Ethanol production saw 427.42 million liters in the first half of January, with corn ethanol accounting for nearly 90% of this output.

Strengthening Agribusiness Infrastructure

Coamo has also enhanced its infrastructure in the Center-West region with a R$191 million investment in two new grain receiving units in Mato Grosso do Sul. These facilities aim to improve logistics and boost farmers' competitiveness through modern infrastructure and efficient storage solutions.

Coamo’s strategic investments in renewable energy and logistics underscore its commitment to advancing Brazil's agribusiness sector, positioning itself as a leader in sustainable agricultural practices.