Natural Gas as a Pillar of Brazil’s Energy Security: Insights from Gas Week 2026

A comprehensive panel discussion on the impact of Brazil's Capacity Reserve Auction (LRCAP) on the natural gas market, recorded on the second day of the Gas Week 2026, organized by Eixos, highlighted the pivotal role of natural gas in the nation's energy matrix. With 90 projects and 15 GW of gas thermal plants contracted, the panel brought together key players including Eneva, Petrobras, Origem Energia, Cocal, and ED, alongside regulators EPE and ANP, to debate critical issues such as tariffs, LNG, storage, biomethane, and the future steps for the post-auction gas market.

Brazil’s recent capacity reserve auction has solidified the role of natural gas as a critical pillar for the country’s energy security, with major industry players securing key contracts to provide dispatchable power to a grid increasingly reliant on intermittent renewable sources.

The auction, held in March and conducted by ANEEL, MME, and CCEE, successfully contracted 18.97 GW of capacity — primarily from gas-fired thermal plants. The projects represent R$ 64.5 billion in total investments with delivery dates ranging from 2026 to 2031. The auction achieved a 5.52% discount, resulting in estimated savings of R$ 33.64 billion.

The results were the focus of intense discussion at the Gas Week 2026 conference in Brasília, where executives and regulators analyzed the long-term impacts on the nation’s energy and gas markets.

Eneva and Petrobras Secure Dominance

Eneva, the largest private natural gas producer in Brazil, emerged as a protagonist in the auction. Despite legal challenges and scrutiny from the Federal Audit Court (TCU), Executive Director of Marketing, Sales and New Business at Eneva, Marcelo Lopes, expressed confidence in the process.

"The auction was not designed to favor specific agents, but to contract the energy security the system needs," Marcelo stated during a panel. He noted that national energy planners (EPE) and the grid operator (ONS) have signaled the need for dispatchable power since 2021.

State-run oil giant Petrobras also secured significant re-contracting for its existing thermal fleet. Leonardo Santos Ferreira, a Petrobras Gas and Energy Marketing Manager, highlighted that the new contracts provide the fixed revenue necessary for infrastructure investments, with a renewed focus on "operational flexibility." This allows plants to be dispatched up to twice a day to balance the grid.

Market Volatility and New Frontiers

The auction is expected to transform the Brazilian gas market by treating gas as a "flexibility fuel." Flávia Barros, director of Origem Energia, noted that the intermittent demand from thermal plants would likely increase short-term price volatility, creating both risks and opportunities for traders.

"The winners in the post-auction market will be those capable of coordinating infrastructure and operating in a regionally fragmented environment," Flávia said, highlighting Origem’s strategy of integrating upstream production with strategic gas storage.

In a first for Brazil’s capacity auctions, Cocal successfully negotiated thermal projects powered by biomethane, signaling a shift toward replacing fossil fuels with renewable gas in the industrial and power sectors.

Regulatory and Infrastructure Outlook

The National Petroleum Agency (ANP) estimates that the auction results could lead to the contracting of 49 million cubic meters of gas per day. Pietro Mendes, an ANP director, emphasized that this volume is crucial for maintaining the financial health of the gas transport system and could help lower transport tariffs in the long run.

Heloisa Borges, Director at the Energy Research Office (EPE), concluded that the Brazilian gas industry has reached a level of maturity capable of delivering diversified solutions, including LNG, domestic gas, and pipeline imports.

"We saw a robust industry capable of responding to the different needs of various actors," Borges said, pointing to the upcoming Integrated National Infrastructure Plan as the next step in supporting Brazil's growing gas production.

From Landfills to Legislation: The Expansion of Brazil’s Biomethane Market

Brazil’s biomethane industry is gaining momentum as pioneering production projects converge with a new regulatory framework designed to expand the market and attract investment.

One of the sector’s landmark initiatives is located at the Dois Arcos sanitary landfill in São Pedro da Aldeia, Rio de Janeiro state. Operational since 2014, the facility became the first landfill in Brazil authorized to commercialize biomethane, receiving regulatory approval in 2017 from ANP, the National Agency of Petroleum, Natural Gas and Biofuels. Initially designed to produce around 16,000 cubic meters of biomethane per day, the plant has increased capacity to 18,480 m³/day through operational efficiency gains.

The landfill receives roughly 900 tons of municipal waste per day from eight municipalities, generating biogas through the anaerobic decomposition of organic material. The gas is captured through a network of more than 300 wells, about half of which remain active. Technicians continuously monitor methane concentrations and pressure levels to maximize gas recovery.

A key innovation at the site is its hybrid system, which allows biogas to be directed either to biomethane upgrading or to electricity generation. Higher-quality methane streams are routed to the biomethane plant, while lower-grade gas is used to produce power.

Beyond production, Brazil is also developing a regulatory ecosystem to support the biomethane market. Certification company, the Instituto Totum, founded in 2004, operates as a third-party agent providing verification, validation and certification services in various sectors, including biomethane.

A major regulatory milestone is the Fuel of the Future Law, whose discussions began in 2024 and which aims to expand biomethane use through the creation of the Biomethane Origin Guarantee Certificate (CGOB). The certificate separates the physical biomethane molecule from its environmental attribute, allowing producers to sell the fuel locally while trading the environmental credit independently. This mechanism is seen as particularly important in Brazil, where transporting biomethane over long distances can be logistically challenging.

The CGOB differs from the existing Gasc certification program, which primarily serves the voluntary market for biogas and biomethane. While Gasc uses a simpler purchasing process and measures gas in calorific value (millions of BTUs), CGOB focuses on biomethane that meets national fuel standards and measures volumes in cubic meters. The new system also requires buyers to participate directly in the registration and retirement of certificates, reflecting its more regulated structure.

Industry participants expect the new framework to stimulate investment and encourage biomethane production across the country. As the market expands, certification firms such as Toton are preparing to operate within the new system, ensuring transparency and preventing double counting between certification schemes while offering producers greater flexibility in how they commercialize their biomethane and associated environmental attributes.

The biomethane sector in Brazil is now poised for significant growth, driven by new policies aimed at increasing the share of renewable natural gas in the energy matrix. 

Although biomethane has been blended in places like Ceará into the gas network since 2018, the current production from 11 plants (840,000 m³/day) is minimal compared to Brazil's natural gas demand, which is 61 million m³/day. 

The main consumers include thermoelectric power plants, industrial users, and residential networks. The sector is expected to experience significant growth after 2026, when the Future Fuel Act will require gas distributors to blend biomethane with natural gas, starting at 1% this year and reaching 10% by 2035, with the goal of reducing fossil fuel consumption and greenhouse gas emissions.

Thus, under Brazil’s new regulatory framework, demand for biomethane is expected to rise sharply. Petrobras alone may require around 700,000 cubic meters of biomethane per day to comfortably meet its mandated blending quota, an amount that is nearly equal to the country’s current total biomethane production capacity.

Other distributors are also increasing their use of the renewable gas. São Paulo-based distributor Comgás already injects about 71,000 cubic meters of biomethane per day into its network, primarily supplied by a project in the city of Piracicaba. The company is now pursuing additional supply agreements as it prepares to expand biomethane use under the new regulations.

Cost of living in Brazil: domestic gas prices, gasoline, and ethanol rise and affect the income of Brazilian citizens

According to the newspaper Folha de S.Paulo, Petrobras readjusted today "the price of cooking gas by about 5%". According to the newspaper, the price increase is valid for all types of LPG (liquefied petroleum gas), which includes domestic (for cooking) and industrial gas.

This is the fifth increase in domestic gas in 2019. The last was on November 25, when Petrobras (PETR3; PETR4) readjusted the domestic gas cylinder price by 4%.

According to a survey by the National Agency of Petroleum, Natural Gas and Biofuels (ANP), in the early days of December, in Belo Horizonte, Minas Gerais, the price of cooking gas rose twice the inflation measured by the IPCA.

Already the price of ethanol in the pumps of gas stations in Brazil is the highest in the last six years. To make matters worse, the price of gasoline has also skyrocketed. Thus, fuel readjustments make life harder for Brazilians this holiday season.