April 9, 20260 views0 shares
Biomethane Target Creates Opportunity for Ethanol Mills
Brazil's National Energy Policy Council has set a new biomethane procurement target, requiring natural gas producers and importers to reduce emissions by purchasing biomethane. This target presents a significant opportunity for ethanol mills, enabling them to meet market demand by producing biomethane and obtaining carbon reduction certificates, thereby driving energy transition and sustainable development.
Last week, Brazil's National Energy Policy Council (CNPE) announced a new emissions reduction target, requiring natural gas producers and importers to reduce emissions by 0.5% through the purchase of biomethane—a substance identical to natural gas but produced from biogas. This percentage is double the original proposal from last year. Fernando Lopes, Director-General of Instituto Totum, stated, “The announced target means 480,000 cubic meters per day of biomethane will need to be acquired by operators this year.” Instituto Totum was the first entity accredited by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) as an origin certifying agent, making it the first authorized body to certify biomethane producers for the issuance of the Biomethane Origin Guarantee Certificate (CGOB).
For Tomás Manzano, President of Copersucar, “this is an important market with great potential.” In his assessment, the certificate separates the physical attribute from the environmental one and provides predictability for companies. The foundation of the CGOB lies in the Future Fuel Law, which sets targets for reducing carbon intensity in the natural gas sector. This sector is currently dominated by major oil companies like Petrobras. According to Rystad consulting data, Brazil is expected to become one of the top five global oil producers by the end of the decade. A significant portion of the oil extracted from the pre-salt layer is associated with natural gas.
On the supply side, sugar and ethanol mills hold significant potential for biomethane production. They can produce biogas by treating by-products such as sugarcane bagasse, filter cake, and wastewater, which can then be purified into biomethane. This not only generates an additional revenue stream for the mills but also effectively utilizes waste, reducing environmental pollution. As the demand for sustainable energy grows, the role of ethanol mills in biomethane production will become increasingly prominent, making them a crucial component of Brazil's energy transition.