Brazil Uses Biomethane Trucks to Move Sugar to Santos Port

Brazilian sugar producer Bioenergética Aroeira S. A. and its logistics partners have started a low carbon route to move sugar from Minas Gerais toward the Port of Santos, using trucks fuelled by biomethane made from sugarcane industry waste, before the cargo gets shifted to rail.

This pilot is a bit of a mix between Aroeira, Gasgrid, ZEG Biogás, Aguetoni Transportes and VLI Logística. The biomethane powered trucks take the sugar to VLI’s Uberaba Intermodal Terminal, and from there the load travels along the Centro-Atlântica rail line to Santos for export, more or less straight.

In the initial phase they expect the movement to reach around 12,000 tonnes of sugar each month, with the figures possibly climbing later this year. The partners are also looking at something near 200,000 tonnes carried in 2027.

The biomethane is being made by processing industrial sugarcane leftovers, through biodigestion and then purification, at a plant that was built by Aroeira and Gasgrid/ZEG Biogás. The setup is meant to turn a sugar and ethanol industry side-product into fuel for the very first stretch of the commodity’s export travel.  

VLI said that rail transport can emit up to 75% less carbon dioxide per tonne moved than trucks that use fossil fuels, but the company didn’t share any estimate that was specific to the project. Still, the mix of renewable-gas trucking and rail haulage is supposed to lower the carbon intensity of one of Brazil’s big agricultural export routes.  

This project also joins a broader momentum within Brazil’s sugar and bioenergy sector to use biomethane as a substitute for diesel in heavy transport. Firms have pointed to the fuel’s potential, for cutting emissions, diversifying energy supply and extracting more value from organic waste. But wider use will hinge on investing in production units, distribution channels and refuelling infrastructure.

Brazil’s biogas association ABiogás said the sector could pull in around 216 billion reais in private capital by 2035, provided the country expands renewable-gas production and use. The group also forecast 57 billion reais in added annual revenue, more than 251,000 jobs , and over 40,000 biomethane-powered trucks, but noted that these targets rely on fresh infrastructure, regulatory measures and consistent fuel demand.  

Biomethane is starting to look like a realistic diesel alternative for Brazil’s heavy-duty transport, where battery range, charging time, and the whole infrastructure picture are still kind of limiting electrification. Made from agricultural and sugarcane waste, the renewable gas could cut logistics emissions, and also ease off diesel dependence. Still, wider uptake will likely need new production plants, refuelling networks, plus regulatory backing, because otherwise it is hard to scale.

Why Biomethane matters in Brazil

Biomethane is starting to look like an alternative fuel for Brazil’s heavy transport sector, kinda because it can be made from agricultural leftovers plus industrial waste, so it’s not just theory. This fuel is especially relevant to Brazil’s sugar and ethanol industry, since that sector produces huge amounts of organic residues which otherwise can turn into a problem.

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.