Sustainable Aviation Fuel (SAF)

Sustainable Aviation Fuel (SAF), a liquid alternative to conventional fossil-based jet kerosene, is a renewable fuel derived from non-petroleum feedstocks. Developed as a critical component in the global aviation industry's effort to achieve net-zero carbon emissions by 2050, SAF is chemically identical to conventional jet fuel — a characteristic known as "drop-in" capability — meaning it can be used in existing aircraft engines and airport infrastructure without modification. While SAF currently accounts for less than 1 percent of global aviation fuel consumption, it is widely regarded as the most viable near-term solution for decarbonizing the aviation sector, which is responsible for approximately 2 to 3 percent of global anthropogenic carbon dioxide (CO2) emissions.

Production and Pathways

The production of SAF involves converting renewable biomass or waste materials into hydrocarbons suitable for aviation. Unlike conventional jet fuel, which is refined from crude oil, SAF utilizes a diverse range of feedstocks, including used cooking oils, agricultural residues, municipal solid waste, and energy crops such as sugarcane or camelina. Several technical pathways have been certified for SAF production:

• Hydroprocessed Esters and Fatty Acids (HEFA): The most mature and widely used method, HEFA converts vegetable oils and waste fats into fuel through a process of deoxygenation and hydrocracking.
• Alcohol-to-Jet (AtJ): This pathway involves the fermentation of sugars or starches into alcohols (such as ethanol or isobutanol), which are then dehydrated and oligomerized into synthetic paraffinic kerosene.
• Fischer-Tropsch (FT): This process gasifies biomass or municipal waste into a synthesis gas (syngas), which is then catalytically converted into liquid hydrocarbons.
• Power-to-Liquid (PtL): Also known as e-fuels, this advanced pathway uses renewable electricity to synthesize fuel from captured CO2 and hydrogen produced via electrolysis of water.

In many instances, SAF is produced through "co-processing," where renewable feedstocks are integrated directly into existing petroleum refineries alongside mineral crude oil. This approach leverages existing industrial infrastructure to lower initial capital expenditures.

Competitive Advantage

The primary competitive advantage of SAF lies in its seamless integration into the existing aviation ecosystem. Because it is a "drop-in" fuel, it avoids the massive costs associated with redesigning aircraft or rebuilding refueling networks. Furthermore, SAF provides a degree of energy security by diversifying fuel sources and reducing dependence on volatile global oil markets. For nations with robust agricultural sectors, such as Brazil and the United States, SAF production offers significant economic opportunities, creating new value chains in the bioenergy and chemical industries.

Ecological Impact

The ecological benefit of SAF is primarily realized through its lifecycle carbon footprint. While burning SAF in an engine still releases CO2, the carbon emitted was previously absorbed from the atmosphere by the biomass during its growth, creating a closed-loop cycle. In contrast, conventional jet fuel introduces "new" carbon into the atmosphere from underground reserves.

Current SAF production can reduce lifecycle CO2 emissions by up to 80 or 87 percent compared to conventional kerosene. Additionally, SAF contains significantly lower levels of sulfur and aromatics, which reduces the emission of particulate matter and the formation of contrails — the white streaks behind aircraft that contribute to non-CO2 radiative forcing and global warming. However, the overall ecological benefit depends heavily on the sustainability of the feedstock; for instance, feedstocks that compete with food crops or lead to deforestation (indirect land-use change) may diminish the fuel's environmental credentials.

Applications and Market Mechanisms

SAF is primarily applied in commercial and military aviation, where it is typically blended with conventional jet fuel (currently up to a 50 percent limit for most certified pathways). Beyond its physical use, the industry has developed innovative market mechanisms to accelerate adoption:

• Book & Claim: This system allows an airline or corporate customer to purchase the environmental attributes of SAF produced in one location, even if the physical fuel is consumed elsewhere. This decoupling of the environmental credit from the physical product overcomes logistical barriers and reduces the emissions associated with transporting heavy fuel over long distances.
• Regulatory Compliance: SAF is increasingly used to meet international mandates, such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) established by the International Civil Aviation Organization (ICAO).

As production scales and technological advancements reduce the current price premium — which ranges from three to five times the cost of conventional fuel — SAF is expected to become the standard propellant for the next generation of sustainable air travel.

Biomethane: Production and Applications

Biomethane (also referred to as renewable natural gas or RNG) is a sustainable, high-energy biofuel derived from the purification of biogas. Chemically nearly identical to conventional natural gas, it consists primarily of methane (CH₄) with a concentration typically exceeding 90–95%. As a renewable energy source, biomethane plays a pivotal role in the global transition toward a circular economy and the decarbonization of energy matrices, particularly in sectors such as heavy transportation and industrial manufacturing.

Production Process

The generation of biomethane is a multi-stage industrial process that begins with the production of raw biogas and concludes with advanced refining techniques.

Anaerobic Digestion

The primary source of biomethane is biogas, which is produced through the anaerobic digestion (decomposition in the absence of oxygen) of organic matter. Common feedstocks include:

• Agricultural Residues: Livestock manure and crop remains;
• Urban Waste: Organic fractions of municipal solid waste and sewage sludge;
• Industrial Byproducts: Waste from food and beverage processing.

This decomposition typically occurs in controlled environments known as biodigesters or naturally within sanitary landfills. Raw biogas generally contains 50–70% methane, with the remainder being carbon dioxide (CO₂) and trace amounts of nitrogen, hydrogen sulfide (H₂S), and moisture.

Purification and Upgrading

To transform biogas into biomethane, it must undergo a process known as upgrading. This involves three critical removal steps:

1. Desulfurization: The removal of hydrogen sulfide (H₂S) to prevent corrosion of metallic components and engines.
2. Dehumidification: The elimination of moisture (water vapor) to ensure stable combustion and prevent internal freezing or corrosion.
3. CO₂ Separation: The extraction of carbon dioxide to increase the energy density (calorific value) of the gas.

Various technologies are employed for CO₂ separation, including membrane separation, water scrubbing, and pressure swing adsorption (PSA). Once the methane concentration meets regulatory standards — such as those set by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) in Brazil — the gas is classified as biomethane.

Economic and Environmental Significance

Biomethane is distinguished from other renewables by its interchangeability with fossil-derived natural gas. This allows it to utilize existing infrastructure, such as pipelines and Compressed Natural Gas (CNG) vehicles, without requiring specialized modifications.

Environmental Impact

By capturing methane — a potent greenhouse gas — from organic waste that would otherwise decompose in the open, biomethane production significantly reduces atmospheric pollution. When used as a substitute for diesel or gasoline, it can reduce greenhouse gas emissions by up to 99%. Furthermore, the byproduct of the digestion process, known as digestate, serves as a high-quality organic fertilizer, closing the nutrient loop in agricultural systems.

Energy Security and Circular Economy

Unlike fossil fuels, biomethane is produced locally from domestic waste streams, shielding national economies from international oil price volatility and exchange rate fluctuations. It embodies the principles of the circular economy by transforming an environmental liability (waste) into a strategic energy asset.

Market Outlook and Challenges

The adoption of biomethane is accelerating globally, supported by legislative frameworks such as "Future Fuel" mandates that require major gas importers and producers to integrate renewable molecules into their portfolios. However, several challenges persist:

• Complexity and Scale: Biomethane plants require higher capital investment (CAPEX) and operational expertise compared to simple electricity generation from biogas;
• Regulatory Compliance: Meeting stringent purity standards for injection into national grids requires continuous monitoring and sophisticated instrumentation, such as online chromatographs;
• Contractual Rigidity: Due to the necessity of constant supply for industrial clients, "take-or-pay" or "delivery-or-pay" contracts are common, increasing the legal and financial complexity for project developers.

As technology matures and carbon markets expand, biomethane is expected to remain a cornerstone of sustainable development, providing a versatile bridge to a low-carbon future.

Brazil’s First-Ever Biomethane Plant Powered by Pig Waste Is Set to Transform the Energy Sector

Brazil is set to inaugurate Latin America's first biomethane plant certified by the ANP (National Agency of Petroleum, Natural Gas and Biofuels) that uses swine waste. The facility, developed by H2A Bioenergia in partnership with Copercampos, will be launched on March 26 in Campos Novos, Santa Catarina, with an investment of R$ 65 million (approximately 13 million USD).

This certification allows for the formal commercialization of biomethane, ensures production traceability, and enables long-term contracts. The plant utilizes technologies such as CSTR biodigesters and membrane purification systems, achieving purity levels exceeding 96% — (Continuous Stirred Tank Reactor) is a type of chemical and industrial reactor where reactants flow continuously into a stirred tank and products exit simultaneously and it is characterized by perfect mixing, resulting in a uniform composition and constant temperature throughout its volume.

The plant will operate in the regulated biofuels market and will have the capacity to produce 16,000 m³ of biomethane, 23,000 m³ of biogas, and 12 tons of food-grade CO₂ daily. The project anticipates additional revenue through decarbonization credits under RenovaBio and carbon credits.

According to Adilson Teixeira Lima, CEO of H2A Bioenergia, the goal is to create replicable projects in agro-industrial dense areas. Data from ABiogas indicates that Brazil could produce over 80 billion m³ of biomethane annually from organic waste, primarily from the agricultural sector.

Biomethane is seen as a viable alternative for heavy transport and industry, offering a 96% reduction in greenhouse gas emissions in the regulated market. Heavy vehicles account for more than half of greenhouse gas emissions, despite representing only 5% of the total fleet. The energy transition process is slow, and solutions that work elsewhere may not be suitable for Brazil, with no single path to decarbonization.

Biomethane is considered the most viable solution for decarbonizing truck and bus fleets and can be produced from various sources. It has the potential for exponential growth in production and supply, creating jobs and income, and replacing diesel and LPG. Being derived from organic waste, it has a renewable carbon cycle and reduces greenhouse gas emissions by up to 90% compared to B15 diesel, depending on biomass origin and process efficiency. Brazil's encouragement of biofuels as a solution could help meet environmental targets sustainably, pave a sovereign path for economic growth, wealth creation, and global leadership in clean, renewable energy for mobility.

Petrobras (PETR3; PETR4) Navigates Geopolitical Storm with New Gas Find and Domestic Fuel Price Hikes

Petrobras operates as Brazil's government-run oil company which stands between two opposing forces. The company recently announced a significant gas discovery in Colombian deep waters, a move which will increase regional energy security while it struggles to manage both the unstable international oil market and its effects on Brazilian customers.

Colombian Deepwater Discovery: A Strategic Boost

Petrobras announced a new gas discovery at the Copoazu-1 exploratory well which it operated at Block GUA-OFF-0 within the Colombian deep water region. This discovery which exists 36 kilometers from shore at a depth of 964 meters represents a vital milestone because it helps develop the gas province and unlocks additional resources in the Colombian offshore space. The project will provide additional gas supplies which will strengthen the area's energy security system.

The drilling of Copoazu-1 which started on November 11 2025 has conducted its operations safely while following environmental and social standards. The discovery of gas-bearing intervals through electric logs and fluid sampling proved gas exists in areas outside the primary target which increased the importance of the discovery. Petrobras International Braspetro B.V. – Sucursal Colômbia (PIB COL) operates the consortium with 44.44% ownership while its partner Ecopetrol S.A. holds 55.56% ownership. The initiative supports Petrobras's strategic objective which aims to increase oil and gas reserves through exploration of new territories and partnerships with other organizations for worldwide energy resource management during the current energy transition.

Brazilian Domestic Fuel Prices Under Pressure: The Shadow of Geopolitics

The effects of worldwide instability are reaching Brazilian consumers who live in their home country. The diesel price at Petrobras refineries has gone up by R$ 0,38 for each liter according to the company's latest announcement. Petrobras President Magda Chambriard stated that new price increases will happen if the Iran conflict continues to escalate toward a longer duration. She stated that they conduct daily assessments of the situation because the war predictions and Hormuz Strait blockade risks present a situation that needs constant monitoring.

Brazil requires diesel imports because the country does not produce enough fuel to meet its consumption needs, which makes the country vulnerable to international market changes. Chambriard shared that six third-party vessels which carried fuel to Brazil had to change routes because other destinations offered better payment terms, which shows how intense global supply competition has become. Petrobras responded by halting a diesel auction to evaluate current market conditions while the company increased production capacity at its refineries to fulfill planned delivery schedules. Chambriard stated that Petrobras lost control over fuel prices because the company sold its distribution business BR Distribuidora in 2019.

The Debate Over Windfall Profits and Market Intervention

The government has initiated a discussion about rising fuel prices through its handling of this issue. The government has introduced a package that will cut diesel prices by R$ 0.64 through the efforts of Ministers Alexandre Silveira and Rui Costa. Jean-Paul Prates, former president of Petrobras, doubted that the emergency solutions would work for the upcoming years.

He explained that "windfall profits" describe the unexpected financial benefits which oil companies and exporting countries receive from unanticipated worldwide occurrences such as wars and climate changes. Prates asserted that national governments typically take action to control these gains which they consider essential for domestic market protection and revenue expansion. He provided two cases from the UK and Norway which imposed special taxes on North Sea oil production during times of substantial profitability. The Brazilian government currently practices export profit taxation, which Prates considers an appropriate defensive strategy that will decrease inflation while using Brazil's domestic oil production capacity.

Prates warned that the current situation serves as an emergency response rather than a permanent fix for Brazil's intricate fuel market challenges. He identified distribution expenses, biofuel requirements (CBIO) — the Decarbonization Credit (CBIO) was created as an instrument of RenovaBio, being registered in book-entry form for the purpose of proving the individual target of the fuel distributor referred to in Article 7 of Law No. 13,576/2017 — and fuel station speculative activities as major issues that exist after the refinery process.

He proposed a better solution as a compensation fund system which would receive continuous funding during times of declining oil prices while providing financial resources during periods of increased prices to achieve stable consumer prices without harming Petrobras or depending on temporary solutions.

Petrobras Autonomy and Political Influence

Prates also rejected the idea that politicians would directly interfere with pricing by saying that government agencies would become involved only if election year conflicts escalated. He explained that his own departure from Petrobras was due to a misunderstanding regarding dividend distribution policies, not direct presidential orders to manipulate prices.

Prates declared that President Lula maintains constant respect for company structure and processes because he manages through the Board of Directors which includes both government officials and private sector members who assess business viability and profitability. He stated that Petrobras operations currently match government electoral commitments because board members review and approve decisions which serve both public policy and corporate governance needs. He finished by saying that President Magda Chambriard is handling the situation well because she studies market trends outside of Petrobras's internal activities.

The Path Forward

The dual narrative of a promising offshore gas discovery and the immediate challenge of fuel price volatility encapsulates Petrobras's current trajectory. The Colombian discovery provides Brazil with a strategic advantage that will last through time however the country needs to focus on handling current worldwide political situations that impact its domestic economic conditions. Emergency fiscal measures will compete against structural reforms for fuel market control which will shape both Brazil's energy policy and its economic stability.

Brazil Considers Higher Biodiesel Blends as Diesel Prices and Global Tensions Rise

The recent increase in diesel prices which Brazil experienced has led people to start discussing the requirement that biodiesel must be mixed with diesel fuel. The experts together with industry professionals recommend that they should raise the biodiesel blend percentage to strengthen the country's energy independence.

The Ministry of Mines and Energy (MME) of the Brazilian government announced its intention to test the technical feasibility of higher biodiesel blends during the initial six months of 2026. The industry which includes 43 different organizations together with the biodiesel industry has requested faster increases to the biodiesel blend percentage because of rising diesel prices and Middle Eastern geopolitical conflicts.

The MME announced that testing will start in 2026 after all testing resources and institutional agreements and essential budget and technical components become accessible. The MME announced through a note to Broadcast Agro that testing will start in 2026 after all testing resources and institutional agreements and essential budget and technical components become accessible.

The government of Brazil through Minister of Mines and Energy Alexandre Silveira has announced that testing needs to happen before any increases to the current 15% biodiesel requirement (B15) will receive approval. The Future Fuel Policy establishes that any blends above B15 can only proceed after showing their technical viability. The current schedule anticipates B16 from March 2026 which will advance to B20 by March 2030 after this technical validation.

The MME further clarified that the tests are awaiting the "formalization of financial execution and the transfer of resources to participating institutions," a crucial step for initiating experimental activities. The testing plan is a collaborative effort involving automakers, system suppliers, transporters, biodiesel producers, fuel distributors, universities, research institutes, and government agencies.

Industry Pushes for Higher Blends

The biodiesel sector, represented by the Parliamentary Front for Biodiesel (FPBio), is actively lobbying for an increase to 17% (B17) and views government subsidies for imported fossil diesel as a strategic misstep. The FPBio argues that such subsidies deepen Brazil's dependence on a fuel susceptible to geopolitical crises and price volatility, rather than reducing energy vulnerability.

Daniel Furlan Amaral, who directs economics and regulatory affairs at the Brazilian Association of Vegetable Oil Industries (Abiove), demonstrated how diesel price increases make a major impact on agricultural production costs and logistics for his industry. "Diesel is essential for the operation of machinery in the field and also for transporting production. When the price rises, rural producers' margins are pressured, especially in an already challenging time for the sector," Amaral explained.

The biodiesel sector wants to increase its biodiesel blend because it will help reduce their current risks while creating demand for domestic soybean processing which serves as the main biodiesel feedstock in Brazil. Amaral states that higher blending ratios will lead to reduced fuel costs at gas stations, depending on oil price fluctuations.

Production Capacity and Global Context

The demand for biodiesel in 2026 will reach 10.5 billion liters if the current B15 blend continues to be used. The authorization to increase the blend to B16 starting in July will raise consumption levels to about 11 billion liters which will require soybean oil demand to grow from 6.8 million tons to 7.1 million tons.

Brazilian industries can operate at higher blend levels because they possess both the necessary installed capacity and the required raw materials to produce B17 and B18. "The sector has enough supply to meet current demand because it operates with extra production capacity. The industry needs only to receive environmental approval to start its production expansion," Amaral said while he dismissed the supply chain problems that the Civil House Minister Rui Costa had mentioned.

Experts acknowledge that domestic diesel prices remain competitive but they also warn about potential future price increases. A higher biodiesel blend will protect Brazil from external market changes and supply disruptions which will decrease its risk from geopolitical disputes that affect global energy markets.

International Precedent: Indonesia's B50

Indonesia is implementing a 50% biodiesel blend (B50) solution to its oil crisis through its use of palm oil as feedstock. Deputy Energy Minister Yuliot Tanjung announced this initiative which requires more road tests to establish its execution for the year 2026. The experts in the industry consider Indonesia's shift to B50 as a worldwide standard which shows how high-performance biodiesel blends can deliver both environmental benefits and local economic advantages through domestic production.

'Lazy' or exploited? The data-driven myth of the idle Brazilian worker

The recent report at Folha de S.Paulo that claims Brazilians work less than the worldwide average work time has started an intense argument in Brazil's media which demonstrates three major problems with the way statistics are presented and the economic obstacles that exist and the future impact of artificial intelligence. 

Brazilians work 40.1 hours per week which represents a decrease from the global average of 42.7 hours but this statistic has led to a national discussion. Critics of this figure state that while it shows numerical precision the actual labor conditions in Brazil get misrepresented because it overlooks both systemic inequities and the hidden needs of Brazilian workers. 

The current dispute emerges during a movement to eliminate the "6x1" work schedule which requires employees to work six days and take one day off because this movement shows a wider social demand for better workplace rights. Analysts say that productivity discussions get used as weapons to show Brazilian workers as unproductive which shifts focus away from the main structural problems that truly restrict economic productivity.

The Illusion of Effort: A Structural Problem

Economists believe that productivity emerges from technological progress and capital investments and infrastructure development instead of individual work efforts. Brazil exists in a different economic situation because its workers need more time to produce less value than workers in advanced industrial countries like Norway and Denmark and France.

By blindly following the neoliberal agenda of the Washington Consensus, the country has experienced three decades of deindustrialization since its mid-20th-century peak when industrial output produced 30 percent of its economic output. 

The current industrial base of the country exists at only 9 to 11 percent of its peak capacity. Brazilian companies struggle with high financing costs because they need to pay interest rates that exceed 15 percent whereas developed market companies pay close to zero for their loans. The companies cannot compete effectively on the global market because of this difference in costs, which prevents them from making necessary investments to expand their operations.

High financing costs create investment obstacles which prevent companies from obtaining necessary funds. Brazilian companies find it hard to compete with international businesses because of this market imbalance according to analysts. 

Infrastructure bottlenecks decrease productivity output according to research. Supply chains experience interruptions and organizations incur higher expenses because of road congestion and port inefficiencies and administrative hold-ups. The majority of Brazilian workers function in industries which lack growth potential because they work in local services that do not permit production expansion.

Countries face two main challenges when developing their technological foundations. Public investment and research institutions established the foundational technologies which transformed the world through their development of everything from internet infrastructure to GPS systems. Brazil government spending on strategic innovation projects becomes limited because fiscal restrictions exist. CEITEC S.A. serves as a frequently mentioned example of a semiconductor project funded by the state which developed agricultural tracking chips but failed because of funding shortages. 

The same thing almost happened with Embraer (EMBR3). If it weren't for help from BNDES (Brazilian Development Bank), the company wouldn't have become the phenomenon it is today. The problem is that the same thing happened with many other Brazilian industries that simply didn't have the same support and ended up falling behind.

Another thing is that Brazil exhibits a low official unemployment rate but its economy suffers from structural weaknesses. More than half of all workers earn below two times the minimum wage while approximately 40% of workers operate without social benefits in the informal sector.

Economists project that artificial intelligence will expand existing productivity disparities throughout the future. Advanced economies possess superior education systems which include retraining programs that help workers handle technological developments. Brazil will experience increased challenges in developing its workforce to handle upcoming changes because of its existing educational inequalities.

As the debate over work hours and labor reform continues, many analysts argue that Brazil's productivity challenge stems from more than just work output. Instead, they say it reflects deeper structural issues including technological capacity industrial policy financing conditions and infrastructure which shape the country's economic potential.

Comgás (CGAS5) Opens Call for Biomethane Plants as Brazil Eyes Major Gas Market Expansion

The Brazilian gas distributor Comgás announced that it has opened its public proposal period for connecting biomethane plants to its distribution network. 

Comgás will accept commercial proposals until March 30 for businesses that want to connect their biomethane plants to its distribution system. 

The public call was launched by the concessionaire located in São Paulo after Arsesp established the interconnection rules which determine how biomethane plants must connect to distribution networks. The agency also established aTusd-Verde distribution tariff system which allows producers to access a dedicated distribution rate. 

Comgás will present Arsesp with a business plan for plant interconnections in São Paulo state which they will complete by the end of June this year. 

The Usina Costa Pinto plant in Piracicaba and the Paulínia landfill currently maintain active connections to the Comgás distribution network. These two plants together supply the Comgás network with around 300.000 cubic meters of biomethane every day. 

The Brazilian Association of Biogas and Biomethane ABIOGÁS reports that Brazil produces 2 million cubic meters of daily biomethane. The organization ABIOGÁS believes that Brazil can raise its current output to 8 million cubic meters per day by the start of the next decade. Brazil has the ability to reach a production capacity of 120 million cubic meters per day by 2040 through appropriate investment strategies.

If this scenario materializes, Brazil could not only meet its domestic market demand but also export biomethane. This would allow the country to replace all currently imported Liquefied Petroleum Gas (LPG) in less than two decades and reduce diesel purchases by approximately 70% if biomethane is properly introduced into the transport sector, especially for heavy vehicles such as trucks and buses.

A study titled "Structuring Initiatives and Challenges to Boost Low-Carbon Mobility in Brazil by 2040," (Iniciativas e Desafios Estruturantes para impulsionar a mobilidade de baixo carbono no Brasil até 2040) conducted by LCA Consultores at the request of the MBCBrasil Institute, identifies biomethane as a key component in the decarbonization of heavy transport in Brazil, potentially leading to a new economic surge for the country.

Raízen (RAIZ4) Confronts R$65bn Debt Mountain in One of Brazil’s Biggest Energy Restructurings

Raízen, one of Brazil's largest energy companies, and a Shell and Cosan joint venture, has submitted an extrajudicial recovery application to renegotiate its R$65 billion debt obligations. 

The company which leads the worldwide biofuel market faces what an expert called a "perfect storm" because high interest rates and increased competition and the market refuses to pay extra costs for its eco-friendly products. The restructuring process represents one of the most extensive corporate restructurings in Brazilian history because it ranks after the Odebrecht (now known as Novonor) case.

Marcelo Gasparino who worked as a board member for Petrobras and served as Vale's board vice-president called the action a "courageous decision." He explained that "The approval process for this radical measure exists challenges because people need to understand that they must break eggs to create an omelet.

Raízen experienced its current problems because it pursued aggressive expansion which required debt financing during a time when interest rates were low, at 2%, in 2020, and now interest rates in Brazil are at 15% — or many economists, one of the reasons interest rates are so high is the irresponsible way the Bolsonaro government lowered interest rates in 2020. Critics point out that the measure, taken with the aim of stimulating the economy during the pandemic, was late or excessive, contributing to inflation and currency devaluation. 

At this time, Raízen made substantial investments in second-generation (E2G) ethanol which operates as a cleaner biofuel but the market has taken time to accept it. At the same time, Brazil witnessed the emergence of lower-priced corn-based ethanol products which has established strong competition to Raízen, that produces ethanol from sugarcane.

Another major change at Raízen, that now is seen as a strategic mistake, was when the company, in 2019, entered the retail sector through a partnership with the Mexican group FEMSA, bringing the convenience store chain Oxxo to Brazil. Analysts viewed the move as a distraction because it fell outside the company’s core energy business.

The venture required heavy capital investment to open hundreds of stores, but returns fell short of expectations. After searching for potential buyers for its stake, Raízen’s leadership decided to exit the business. Continuous cash burn led the joint venture to end in 2025.

Following the split, FEMSA resumed control of Oxxo’s Brazilian operations, while Raízen retained management of more than 1,300 Shell Select and Shell Café convenience stores. The Brazilian Oxxo operation never reached break-even, becoming a factor that worsened Raízen’s current financial crisis.

Gasparino also explained the situation now: the restructuring plan which has already been approved by creditors who control 47% of the debt provides multiple solutions which include non-core asset sales and debt-to-equity conversions and new capital funding from Shell and Cosan which are the parent companies.

The company has made a statement about its operations which will remain unchanged but minority shareholders will suffer the most from the upcoming crisis. According to Flávio Conde, analyst of Levante Investimentos,  now creditors are goingo to take control of all business value during a high-debt restructuring because they hold priority over shareholders.

Although the situation is very concerning, the company still maintains a strong position in its core fuel distribution operations, and management has taken steps in recent months to secure its future. Gasparino, for example, explained the situation by saying: “I see light at the end of the tunnel because the work being done now will create better results for everyone involved than what exists today.”

Now, the expectation is for deleveraging through an out-of-court restructuring process, aimed at improving margins in the distribution business, but with shares under heavy pressure and amid strong market skepticism.

War Shock: Brazil Moves to Expand Biodiesel Blend as Oil Markets Grow Uncertain

Brazil government plans to increase its mandatory biodiesel blend for diesel fuel because of geopolitical conflicts in the Middle East and its goal to decrease imported oil derivative dependence. The National Energy Policy Council (CNPE) will meet on March 12 to discuss new rules which might increase the existing 15% biodiesel blend (B15) to either B16 or B17.

The country has started to change its energy policy because the Middle Eastern conflict created uncertainty in global oil markets. Brazil currently relies on 25% of its diesel supply from the Middle East which makes domestic biofuel production essential for both national security and economic security.

Industry representatives, including Carlos Eduardo Hammerschmidt vice-president of Institutional Relations at Ubrabio, affirm the viability of a higher blend. Hammerschmidt explained that Brazil's biodiesel industry has the ability to produce 15 million of cubic meters of biodiesel — the country produced 9 million cubic meters in 2025. According to him, this capacity allows the country to satisfy domestic demand for higher blends without needing to import additional products.

The domestic market industry can satisfy its requirements through an increase from B15 to B17 according to Hammerschmidt who demonstrated that Brazilian agribusiness possesses strong capabilities which enable it to produce more than 350 million tons of grains this year. He maintained that processing raw materials through domestic industrialization creates job opportunities which deliver both salaries and taxation proceeds to the government during times when global markets experience instability.

The National Confederation of Agriculture (CNA) has made an official recommendation to raise B17 because of the current Iranian conflict and unpredictable oil market conditions. The proposal supports Brazil's plan which seeks to decrease its fossil fuel usage while developing a sustainable energy system.

Technical evaluations have proven that Brazilian engines and vehicle fleets can use higher biodiesel blends which include up to B20. Multiple automotive companies have confirmed that current evidence shows biodiesel functions as an effective solution which exists today in the market.

The increased biodiesel blend delivers significant environmental advantages that extend beyond the benefits of energy security. The supply chain will receive an additional 70 million liters of biodiesel for each percentage point increase in the blend, which will lead to the reduction of millions of tons of CO2 emissions. The production of 450 liters of biodiesel results in approximately one ton of atmospheric CO2 emissions being avoided.

Brazil has emerged as a global leader in biofuel production and export, with its biodiesel meeting international quality and sustainability standards. The country has already exported nearly 13,000 cubic meters of biodiesel to the European market in the last six months, positioning itself as a key player in the global energy transition. The industry requires ongoing government support together with transparent policy frameworks to create legal certainty that will foster investment while protecting against potential operational failures from underused domestic production resources.

Brazil's Productivity Puzzle: It's About Value, Not Effort

The common belief that Brazilian workers display "low productivity" actually shows incorrect judgment of their work efficiency. Brazilian workers typically work longer hours than workers in wealthier countries but productivity statistics measure their output according to actual produced value instead of their work dedication. International comparisons show Brazil maintains lower productivity levels because its economy focuses on commodities and basic products which deliver lower market worth.

The "Belgian Beer Paradox" which economist Paulo Gala explained demonstrates how this distortion works. Belgian brewery workers, for example, seem to work with greater efficiency than Brazilian workers because they produce beer products which businesses sell at higher prices through premium brand marketing. 

Belgian beer, often sold as a premium product with strong branding, reputation, and differentiation, commands a much higher price than its Brazilian counterpart. Consequently, the 'added value' generated by a Belgian brewery worker is significantly higher. The productivity indicator, in this instance, captures price and product complexity, not merely technical efficiency or physical output.

In short, it is much more expensive to produce beer in Belgium, where wages are much higher than in Brazil, which, in turn, leads producers to mechanize their production as much as possible.

The chemical industry experiences similar effects because advanced economies manufacture specialized pharmaceuticals and high-tech chemicals which create higher market value products. This situation reflects the production of highly specialized, patented pharmaceuticals and fine chemicals with immense technological content and market pricing power in advanced economies. Brazil, in contrast, often focuses on basic, intermediate, and petrochemical derivatives with lower added value.

Wage structures together with automation systems and capital expenses form another essential structural component. High-income economies face a labor situation where companies need to spend money on automation because they must pay high wages which leads to increased worker productivity and advanced technology development. The Brazilian economy depends on low-value production because its current wage levels and high capital costs create reduced automation incentives.

Economists like Paulo Gala and João Saboia state that the real challenge facing Brazil emerges from its need to develop higher levels of productivity instead of focusing on employee work performance. The country needs to establish technological improvements together with industrial development programs which will help it achieve higher productivity results for its global value chain operations.

The current debate relates to Brazilian minimum wage discussions which will reach their 90th anniversary since the 1930s establishment of the wage law. The minimum wage system according to economist João Saboia remains suitable for Brazil because it aligns with the country's productivity level yet Brazil faces fundamental structural challenges which include stagnant productivity levels and reduced investment activities and elevated interest rates and an aging population.

The country needs to achieve two goals for its long-term economic growth which include increasing productivity through technological progress and expanding high-value production and advancing solutions for income distribution problems through social policy measures. The Brazilian minimum wage is not the problem; compared to other countries, it is low.

In addition to this fact, the Centro de Estudos Sindicais e de Economia do Trabalho (Cesit) published a study which shows that Brazil will create millions of new jobs through increased productivity after decreasing the legal workweek from 44 hours to 36 hours.

The Universidade Estadual de Campinas (Unicamp) research center produced a document which shows that the research predicts the policy will lead to 4 to 5 million new jobs while increasing productivity by approximately 4 percent. The study aims to inform the ongoing debate in Brazil over working hours and labor reforms.

The economist Marilane Teixeira states that industries which operate with high employee requirements need to create new work schedules while bringing on new workers to support reduced employee work times.

Teixeira explained that businesses need to bring on additional staff because their operations continue throughout the week.

The study shows that people in Brazil work more hours than people in other countries. Researchers found that around 21 million workers exceed the 44-hour weekly limit established by Brazil’s Consolidação das Leis do Trabalho. The study found that 4.5 million people suffer from underemployment because they work fewer hours than they want to work.

Worker health is another key factor in the debate. The study found that 500.000 workers took leave in 2024 because they suffered from psychosocial illnesses which developed due to their workplace conditions. The study shows that workplace conditions have caused burnout and work-related stress to become major problems for employees.

The proposal to shorten working hours is currently under discussion in Brazil’s Congress and it might receive a vote before the end of this year. Researchers argue that the country is well positioned to implement the reform because the last working hour reduction took place in the 1980s during a more severe economic downturn which did not increase unemployment.

The dossier contains 37 academic articles that study how a shorter workweek will affect productivity and labor markets and various social groups which include women, young and black workers.