Key draft bills that would boost investments in Brazil's clean energy technologies and advanced biofuels are piling up in the senate, preventing developers and investors from making progress.
The approval of legislation is fundamental for investments in sectors including green hydrogen, offshore wind and advanced biofuels to move forward. Top priorities for the senate include a bill passed by the lower house last month that will create a new green fund to help support renewable investments as well as legislation that will stipulate blend mandates for sustainable aviation fuel (SAF) and hydrated vegetable oil (HVO).
The law creating the new green fund aims to speed up Brazil's energy transition by offering a source of low-cost financing for projects in Brazil. The fund, which would be managed by the Bndes development bank, would have roughly R700bn ($1.4bn) available, according to the bill's author, Sao Paulo congressman Arnaldo Jardim.
If approved, the fund could help reduce the need for subsidies for green hydrogen and low-carbon fuels production, the Brazilian hydrogen and sustainable fuels association (ABHIC) said. Brazil's lack of budget to subsidize its green agenda has been a point of concern among investors.
The fuels of the future bill was approved last month by the lower house. The senate plans to debate it this month. Approval of the law is seen as fundamental for Brazil to guarantee large-scale SAF production, according to the Brazilian airline association (Abear).
The same bill also regulates carbon capture and storage (CCS), helping to clear the way for investments in the sector. Although additional regulations for CCS will be needed, the legal framework stipulated in the fuels of the future bill includes key elements needed for investments to move forward, Isabela Morback, co-founder of the Brazilian CCS association, said. The fuels of the future bill has strong support from the country's powerful agricultural lobby, because it would also clear the way for higher blends of both biodiesel and ethanol.
The senate has also promised to focus on the approval of legislation for a regulatory framework for offshore wind, clearing the way for the government to hold an auction later this year for concessions.
"We expect the law to be passed in the coming days, which is fundamental for the sector to start to prepare for the auction," according to Elbia Gannoum, the president of the Brazilian Wind Power Association (ABEEolica). "Brazil needs to have a clear position [on offshore wind] and approving the law is important," she added. The mines and energy ministry is preparing the parameters for the auction for offshore areas, energy transition and planning secretary Thiago Barral said.
Prickly issue
The senate also needs to tackle the issue of creating a regulated carbon market, which will provide a source of revenue for myriad decarbonization projects.
After languishing in the legislature for nearly four years, the bill is finally expected to advance this month. The senate is expected to make changes to the bill that was approved by the lower house in late 2023, which has been criticized by specialists, who argue that it makes too many concessions to the country's powerful agricultural lobby. Progress is also being made on legislation for the renewable hydrogen industry. Both the lower house and senate have approved bills for the sector and the legislature has held extensive debates with civil society and industry, the president of Brazilian green hydrogen industry association ABIHV Fernanda Delgado said. She added that the bill is now undergoing final changes by the executive branch and should be approved shortly.
