BrazilCASE STUDY 1 Background and objectives Brazil has one of the world’s largest biomass resources and, through decades of industrial policy, has become a biofuels leader. The country has implemented a unified energy-climate-industrial policy to strengthen energy security and reduce oil imports, cut transport emissions and boost competitiveness and jobs. Key policy pillars –Fuels of the Future Bill: Adopted in 2024,58 this establishes a comprehensive framework to promote low-carbon, renewable and advanced fuels across Brazil’s transport and energy mix. The law builds on earlier initiatives such as RenovaBio and expands support to aviation fuels, green diesel, biomethane, carbon capture and storage (CCS) and stronger blending mandates. Brazil combines demand-creation measures with market and financial instruments: –Demand-creation mandates: Ethanol (30% blending in gasoline), biodiesel (15%), SAF (1% emissions reduction target from 2027 scaling-up to 10% by 2037) and biomethane (1% in natural gas) blending. –Market instruments: Tradeable CBIO credits (a Brazilian carbon credit) for certified GHG reductions, biomethane guarantees of origin, Brazilian Development Bank (BNDES) low-interest loans, Rota 2030 tax incentives and new credit lines for biogas and biomethane. Impact –~30% of national energy comes from bioenergy. –~1 million direct and indirect biofuel jobs. –~65 Mt CO2e avoided emissions annually. Exportable lessons –Coordinate policy levers: Align energy, climate and industrial policies to secure broad acceptance, increasing stability and investor confidence. This provides a coherent framework for sustained investment and market growth. –De-risk investment: Pair performance-based incentives such as tradeable credits with concessional finance to lower capital costs and reward verified emissions reductions. Source: Brazil’s Ministry of Energy and Mines. Fuelling the Future: How Business, Finance and Policy can Accelerate the Clean Fuels Market 25

Fuelling the Future 2026