Brazilian state-controlled Petrobras' open call for biomethane supply is the first concrete glimpse into how the upcoming biomethane mandate may unfold, revealing a market with growing supply but still constrained by regulatory uncertainty, logistical bottlenecks and short-term price pressures.
The open call resulted in 20 proposals advancing to the negotiation stage, according to Petrobras. It accepted all proposals for biomethane and biomethane certificate of guarantee of origin (CGOB) supply in 2026.
Market participants received the results with enthusiasm, as many were not confident there would be enough biomethane available in the market for the mandate, considering the amount of current production that voluntary participants have bought. Petrobras said in January it was seeking 700,000 m³/d, and it was able to capture most of that in the open call, a source said. These volumes will be available for delivery in 2026, which biogas association Abiogas considers to be enough to kick start the mandate. "We do not see a problem considering the amount of biomethane available, especially in the first two years of the mandate," Abiogas president Renata Isfer said.
The targets must still be set by the national energy policy council CNPE after a regulatory impact assessment has been submitted for public consultation. The final target for each company will be published by 31 December.
The lack of clarity during this preparatory phase for the mandate is one of the main hurdles for defining biomethane prices in the short-term. Without the targets and regulations for gas producers and importers, market participants are concerned about how to prepare for next year's possible regulatory demand.
The mines and energy ministry said the draft decree regulating the mandate remains under review within the federal government and that the documents will remain confidential until a final decision is made.
Another concern has been ensuring that producers are able to sell the biomethane fuel itself after CGOB-only purchases occur. Many participants do not see potential natural gas demand in the more remote locations where biomethane plants are installed and face difficulties in making the fuel competitive with other alternatives after freight costs to bigger centers. CGOBs will only be accepted under the mandate when the fuel itself is used, without the possibility of flaring the gas.
