In August, President Luiz Inácio Lula da Silva unveiled a revamped version of his Growth Acceleration Program (PAC), an initiative he launched in the late 2000s to boost the economy through a variety of infrastructure projects. For fuel infrastructure projects alone, the federal government plans to invest BRL 1.7 trillion (USD 350 billion) across Brazil.
One of the PAC’s central focuses, according to the government, is the energy transition. A substantial BRL 540.3 billion has been earmarked for this purpose, covering seven key areas: energy generation, universal access to electricity, energy transmission, energy efficiency, oil and gas, mineral research, and low-carbon fuels.
Impressively, 80 percent of Brazil’s electricity generation capacity currently comes from renewable sources such as hydropower, dwarfing the global average of 38 percent.
The focus of these investments is on catalyzing 100 percent sustainable biorefining, co-processing of fossil and renewable fuels, promotion of second-generation ethanol, direct CO2 capture, development of biomethane, and studies to promote the transition to cleaner energy sources.
However, for the PAC to reach its full potential and for Brazil’s energy transition to thrive, it faces daunting regulatory challenges.
Future Fuel
By the beginning of August, there were ten bills under consideration in Congress seeking to regulate different facets of the energy transition. Last week, they were joined by another, issued by the government, proposing the creation of the so-called “Future Fuel Program” — consisting of a series of measures to promote cleaner fuels and reduce greenhouse gas emissions.
While the initial focus of the Future Fuel Program was on its provisions to alter percentages of ethanol in gasoline blends and to set emission targets...
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