Brazil’s president last week signed a decree regulating the country’s National Biofuels Policy, which provides for the expansion of ethanol and biodiesel in Brazil’s energy mix.

After signing the decree regulating the National Biofuels Policy (RenovaBio), President Michel Temer described the programme as one of the most important measures introduced so far by the Brazilian government. The signing took place during the opening conference of the 2018/19 Sugarcane, Sugar and Ethanol Harvest in Ribeirão Preto (SP).

“RenovaBio is, I would say, just another chapter of a broad modernisation agenda. But, among all actions, fiscal responsibility, social responsibility… I would say that, because of the enthusiasm I see (…) I think RenovaBio, of all acts, will be one of the most consequential of this government,” he said.

The law provides for the expansion of the use of biofuels in Brazil’s energy mix, including ethanol, biomass and biodiesel, providing a boost to the entire fuel production chain without imposing carbon taxes. In addition to the economic impact, the project is in line with the commitments undertaken by Brazil under the U.N. Paris Agreement to reduce greenhouse gas emissions.

There is growing optimism in the Brazilian economy, said the president in reference to the country’s record harvest in 2017: “Brazil (…) is back. It is here to stay, to a large extent due to support it has received from its agriculture and agribusiness sector.”

According to the new guidelines, the National Energy Policy Council (CNPE) will be in charge of defining the compulsory annual greenhouse gas emission reduction targets in regards to the country’s fuel sales. The targets stipulated by CNPE will be individualized for each fuel distributor, proportionate to their participation in the market.

The measure also establishes the RenovaBio Committee to work as a technical support body for CNPE. This committee will be responsible for conducting studies and public consultations, as well as monitoring Brazil’s biofuels supply and production chain.

National Petroleum Agency (ANP) will evaluate the criteria for the certification of biofuels and accreditation of its producing firms. Lastly, the document states that the annual targets must be defined until July 15, 2018 and become effective for the period from July 24, 2018 to December 31, 2028. The individual compulsory goals should be made public by August 1, 2019 and shall be in effect by year-end.