Electric transport and biofuels are in Brazil’s spotlight as the country is carving out a unique straregy for sustainable transport by combining EV expansion with a world - leading biofuels sector.
Rather than abandoning combustion engines, the South American country is focusing on a hybrid approach that leverages low - carbon ethanol, biodiesel, and sustainable aviation fuel (SAF) alongside fleet electrification.
In the Latin American country the share of hybrid vehicles in sales reached 9%, and in the city of São Paulo there are already a thousand electric buses on the road.
Brazil is actively promoting the use of ethanol as a fuel and its consumption is expected to be equivalent to that of gasoline by 2040. The country is the world’s second - largest biofuels producer and has blended renewables into transport for decades.
Brazil Biofuel Blackbone:
• Ethanol Mandate: Gasoline at the pump is mandated to contain up to 30% ethanol (E30) , with targets aiming for 35% by 2030. Over 85% of the light vehicle fleet runs on flexible fuels.
• Biodiesel: The mandatory blend in diesel stands at 14% (B14), stepping up to 15% and aiming for 20% by 2030.
• Fuels of the Future: Signed into law to drive decarbonization, this initiative sets ambitious blending mandates and establish frameworks for sustainable aviation fuel (SAF) and green methanol in hard – to – abate sectors like aviation and shipping.
• RenovaBio: This national policy uses a market – basecd system where producers generate and trade decarbonization credits (CBIOs) on the B3 Stock exchange based on their emissions reductions.
While biofuels dominate combustion engines, the shift to battery – electric vehicles (BEVs) is accelerating rapidly.
The EV Fast - Track:
• MOVER Ptrogram: The Green Mobility and Innovation Program (Ministério do Desenvolvimento, Indústria, Comércio e Serviços) enforces stricter emissions standards and provides billions in tax incentives to spur the domestic production of low – emission vehicles and batteries.
• Major Investments: Global automakers are pouring money into local production. For instance, Chinese automaker BYD is building a massive manufacturing complex in Camaçari, Bahia, targeting 50% local component sourcing by late 2026.
• EV Sales Surge: Electric and hybrid vehicle registrations are booming, jumping from around 41.000 units in 2019 to over 177.000 as the market expands.
The Hybrid Approach
Because Brazil’s electricity grid is already roughly 80% powered by hydropower, full electrification represents massive environmental benefits. However, rather than viewing them as competitors, Brazilian infrastructure views electricity and bioethanol as relevant complementary. Plug - in hybrids (PHEVs) running on a mix of grid electricity and biogas/bioethanol offer a highly efficient and cost - effective pathway to carbon neutrality, specifically tailored to the local landscape.