Brazil’s state-controlled oil giant expands investments in green fuels, positioning HVO as a key pillar of its long-term decarbonization strategy
The global energy transition has become a central concern for governments and corporations worldwide, and Brazil is increasingly positioning itself as a relevant player in the low-carbon fuels market. At the heart of this strategy is Petrobras, which has stepped up investments in renewable diesel and Hydrotreated Vegetable Oil (HVO) as part of its broader plan to reduce emissions while maintaining compatibility with the country’s existing vehicle fleet.
Petrobras’ flagship initiative in this segment is Diesel R, a renewable diesel produced through the coprocessing of fossil diesel with vegetable oils, primarily soybean oil, widely used as cooking oil in Brazil. This new technique, called biorefining, uses advanced hydrotreating technology. The result is a fuel chemically indistinguishable from conventional S10 diesel, requiring no engine modifications and delivering significant emissions reductions.
Diesel R: Petrobras’ Drop-In Renewable Fuel That Cuts Carbon Emissions Without Engine Modifications
Diesel R, a renewable diesel developed by Petrobras, represents a practical step forward in Brazil’s energy transition. The main message is that the fuel significantly reduces carbon emissions compared to conventional fossil diesel, while still being fully compatible with existing diesel engines, meaning no mechanical adaptations are required.
Diesel R is produced by combining traditional mineral diesel with renewable vegetable oils, which undergo a refining process that removes impurities and results in a fuel that is chemically very similar to fossil diesel. Because of this similarity, drivers and fleet operators can use it in trucks and other vehicles exactly as they do today.
With Diesel R, the carbon released during combustion was previously absorbed by plants through photosynthesis, which helps lower net greenhouse gas emissions. This makes Diesel R an effective way to reduce emissions immediately, without waiting for large-scale changes in vehicle technology or infrastructure.
Overall, Diesel R is a low-carbon, drop-in solution that allows Brazil to cut emissions in the transport sector while leveraging its existing fleet and strong biofuel supply chain, reinforcing Petrobras’ role in advancing more sustainable fuels.
HVO-Compatible Fuel Without Changes to Vehicles
At Petrobras’ Cubatão refinery, renewable feedstock is blended with mineral diesel and processed in hydrotreatment units, where hydrogen removes impurities such as sulfur and oxygen. This process produces a paraffinic fuel virtually identical to fossil diesel in performance and stability.
According to Petrobras, the key advantage lies in reducing fossil fuel content without altering Brazil’s current vehicle fleet, enabling immediate decarbonization gains. The company reports that the renewable portion of Diesel R can cut lifecycle greenhouse gas emissions by up to 87% compared to traditional diesel.
Petrobras technicians explain that almost Ten percent of this fuel comes directly from vegetable oil, because the carbon released during combustion was previously absorbed by plants through photosynthesis. Therefore, the fuel operates in a near-closed carbon cycle.
Diesel R Is Not Biodiesel
Despite sharing a renewable origin, Diesel R and HVO differ fundamentally from conventional biodiesel (FAME). While biodiesel is produced through transesterification, HVO and renewable diesel undergo hydrotreatment, resulting in a cleaner, more stable fuel with superior oxidation resistance and cold-flow performance.
This chemical similarity to fossil diesel makes HVO particularly attractive to automakers and heavy transport operators. Global manufacturers such as Volvo, Scania, MAN and Mercedes-Benz already approve the use of HVO 100, reinforcing its role as a drop-in solution for decarbonizing logistics and industry.
Corporate Demand and Voluntary Climate Targets
Petrobras’ initial commercial focus is on large corporate consumers seeking to reduce their carbon footprint and meet voluntary ESG commitments. Early adopters report that the additional cost of renewable diesel is modest compared to the environmental benefits.
One industrial client estimates emissions reductions of around 400 tons of CO₂ per year, calling the cost-benefit ratio “fully satisfactory.”
Scaling Up: From 10% Renewable Content to 100% Biofuels
Currently, Petrobras produces renewable diesel with up to 10% renewable content, with plans to reach 20% in the coming years. Looking further ahead, the company is preparing for a future in which fuels could be 100% renewable from 2030 onward.
Central to this vision is Petrobras’ investment in Brazil’s first fully renewable biorefinery, located in Rio Grande do Sul. The project involves converting the Refinaria Riograndense (RPR) into a facility capable of processing 100% renewable feedstock by 2028. The biorefinery is expected to produce HVO (green diesel), sustainable aviation fuel (SAF), green naphtha and other bioproducts, strengthening Brazil’s bioeconomy.
“This project is already underway and represents a strategic priority for Petrobras over the next decade,” the company states.
Brazil’s Biofuel Advantage and Market Outlook
Brazil has a long-standing tradition in biofuels, supported by public policies such as RenovaBio, which allows renewable diesel producers to generate and trade CBIO carbon credits. Each CBIO corresponds to one ton of avoided CO₂ emissions, traded on Brazil’s B3 stock exchange.
According to studies by the Energy Research Office (EPE), renewable diesel, particularly HVO, is already one of the fastest-growing biofuels globally. Between 2011 and 2018, HVO production expanded at an annual rate of over 37%, far outpacing traditional biodiesel growth in Europe.
Once produced at scale, Brazilian HVO has strong potential to compete in international markets, especially as regulations tighten emissions standards in Europe and other regions.
Challenges Remain, but Direction Is Clear
Despite its advantages, HVO production requires complex refinery infrastructure, high-pressure hydrogenation units and significant hydrogen supply, still largely derived from natural gas. The availability and cost of sustainable feedstocks also remain key challenges.
Even so, Petrobras sees renewable diesel and HVO as essential to staying relevant in a decarbonizing global energy market.
By investing simultaneously in oil exploration and next-generation fuels, Petrobras aims to balance energy security with climate commitments, driving Brazil toward a greener, more competitive and more resilient energy future.
