Government increases ethanol content in gasoline from 27% to 30%

The government approved this Wednesday (25) the increase in the ethanol content in gasoline from 27% to 30% and the biodiesel content in regular diesel from 14% to 15% starting August 1. The decision was made by the National Energy Research Council (CNPE), the body responsible for establishing guidelines for the country's energy policy, in a meeting attended by President Luiz Inácio Lula da Silva (PT) and the Minister of Mines and Energy, Alexandre Silveira.

The proposal to change the ethanol content in gasoline from 27% to 30% is in line with the Fuel of the Future Law, which was approved and sanctioned last year and already allows a blend of up to 35% ethanol. To support the decision, feasibility tests, completed in February, were carried out by the Mauá Institute of Technology (IMT), at the request of the Ministry of Mines and Energy (MME).

Adding ethanol to gasoline reduces fossil fuel consumption and CO₂ emissions, as ethanol emits only a third of the CO₂ of gasoline and part of this gas is reabsorbed in sugarcane cultivation.

"We will once again be self-sufficient in gasoline after 15 years and will reduce the need for imported diesel. These measures strengthen agribusiness and family farming," said Sllveira, when announcing the change.

According to a study by Itaú BBA, released in February, the change in the blend could raise prices: 0.6% for regular gasoline, 3.6% for hydrated ethanol and 4.3% for anhydrous ethanol. The increase is the result of greater demand for anhydrous ethanol and lower supply of hydrated ethanol, without an immediate expansion of total production.

The consultancy projects growth in corn ethanol production, while sugarcane ethanol production is expected to decline, with mills prioritizing sugar. At the same time, the higher ethanol content in gasoline could eliminate pure gasoline imports. EPE estimates that, with 33% ethanol, net imports would cease in 2030. In 2023, Brazil imported 2.7 million m³ of pure gasoline (8.8% of national demand), mainly from the Netherlands, Spain and Russia.

According to Felipe Jordy, intelligence and strategy manager at Biond Agro, the expansion of corn ethanol plants in Brazil repositions the grain as a strategic input in the national energy matrix. "With new projects under implementation, the country could become the world's second largest producer of this biofuel. Domestic demand is expected to grow, reducing availability for export."