The Brazilian Petroleum and Gas Institute (IBP) celebrates the approval of the Future Fuel Bill in the National Congress, which demonstrates the parliament's commitment and Brazil's leadership in the energy transition, promoting investments in new technologies and boosting the development and use of innovative and sustainable biofuels.

The Institute recognizes the importance of creating a favorable environment for the production and use of renewable fuels, such as green diesel (HVO) and sustainable aviation fuel (SAF), while keeping in mind the benefits to the Brazilian population. In this regard, the approved text brings important provisions by introducing new biofuels and programs for decarbonization, assigning to the National Council for Energy Policy (CNPE) the responsibility for defining the core guidelines of energy policy and ensuring the evaluation of technical feasibility as a requirement for advancing biodiesel blends.

However, we regret that the renewable portion of biomass co-processing in diesel production has not been recognized for the purposes of fulfilling blend requirements. We believe that diversity in technological pathways, with competitive equality among different alternatives, would enhance efforts toward decarbonization and provide benefits to consumers in terms of price, quality, and supply.

It is worth noting that the co-processing route is widely used in other countries and allows for the gradual increase of renewable content, being extremely aligned with the concept of energy transition. Furthermore, its inclusion could promote greater cost efficiency and better utilization of existing infrastructure.

We are also concerned that the provision for stakeholder participation in the technical feasibility evaluation for increasing blend levels was removed. These analyses should be conducted with full transparency and dialogue with society to promote greater consistency in their results.

Finally, regarding the decarbonization program through a mandate to purchase biomethane or Biomethane Guarantee of Origin Certificates (CGOB), directed at producers and importers of natural gas, the IBP once again expresses concern about the effects of this public policy on the price and competitiveness of natural gas, as well as its potential overlap with other mandates and policies, such as RenovaBio and the carbon market.

The IBP reiterates its support for biomethane as an important fuel for decarbonizing the economy. However, it emphasizes that the program's lack of an end date, combined with the absence of a mechanism to protect already-signed natural gas purchase and sale contracts, as well as the cost to society by imposing one form of decarbonization over others that are more efficient and are already being studied and implemented by O&G producers, will result in increased uncertainty for sector investments and the cost of natural gas supply. This runs counter to the government's own objectives of increasing supply and competitiveness of the molecule in Brazil.

Nonetheless, the IBP reaffirms its support for the decarbonization agenda and awaits the presidential approval of the Future Fuel Bill, consolidating Brazil's commitment to building a more sustainable future.