Brazil’s flagship biofuel initiative, RenovaBio, is currently facing multiple legal challenges that could shape its future, as the government defends the program in court against fuel distributors resisting compliance penalties, reports bnamericas.
The country’s mines and energy minister, Alexandre Silveira, took part in a hearing at the Superior Justice Court (STJ) this week to address injunctions filed by distributors opposing fines for failing to meet obligations related to the purchase of decarbonization credits, known as CBIOs.
RenovaBio is designed to support Brazil’s clean energy goals by recognizing the role of biofuels like ethanol, biodiesel, biomethane, and biokerosene in reducing emissions. The program is built on three key components: annual decarbonization targets for fuel distributors, voluntary certification of biofuel producers based on efficiency scores, and the issuance and trade of CBIOs, with each credit representing one tonne of avoided carbon emissions.
In 2024, authorities set a target for the issuance of 40.4 million CBIOs. But a new law passed this year stirred controversy by restricting fuel and biofuel suppliers from fulfilling orders placed by distributors who had failed to meet their CBIO purchase targets. The situation intensified in 2025, when a federal decree raised the fines for non-compliance, prompting a series of legal actions.
According to Maria Amélia Braga, a lawyer with TAGD Advogados, these disputes reflect a growing tension between maintaining environmental standards and protecting the legal rights of distributors. “There is a clear imbalance between the need for regulatory stability and the distributors’ right to defend themselves,” she said.
Braga added that several lawsuits have reached Brazil’s Supreme Federal Court (STF), questioning the constitutional basis of RenovaBio’s requirements—especially the exclusive obligations imposed on distributors and technical issues in the law’s drafting.
Despite broad support for RenovaBio’s environmental goals, Braga noted that the rising number of legal challenges shows the need for clearer rules. “This demonstrates how sensitive the balance is between environmental ambitions and the economic viability of businesses,” she said.
According to Brazil’s oil, gas, and biofuels regulator ANP, 172 enforcement cases were launched between 2020 and 2024 for failure to meet program targets. While some producers have stopped selling to defaulting distributors as required by the 2024 law, others continue to do so, giving non-compliant companies an edge in the market and undermining fair competition.
“This practice undermines equality, encourages unfair competition, and weakens the economic signals necessary for the credibility and success of the program,” the energy ministry said in a statement.
Looking ahead, Braga stressed that the success of RenovaBio depends not only on judicial decisions but also on more effective communication and flexibility from regulators. “Regardless of how the courts rule, preserving environmental goals will require clear rules and a willingness to work with businesses of all sizes,” she said.
Another issue complicating Brazil’s fuel landscape is the enforcement of the mandatory 14% biodiesel blend in diesel. In March, Sindicom, a trade group representing major fuel distributors, asked for a temporary suspension of the blend requirement, claiming that several companies were ignoring it.
The ANP rejected the request, saying that the data presented by the group did not provide an accurate or unbiased view of nationwide compliance.
