In 2003, we launched flex-fuel cars fuel in Brazil, reopening a new prospect for the hydrous ethanol market. All automakers already installed, other European and Asian brands arrived and made huge investments, launching dozens of car models, all flex-fuel, in anticipation of a change in the energy matrix of light vehicles in Brazil.

In a few years, sales of Otto cycle cars reached 90% of so-called flex- fuel cars. Then, motorcycles also followed the trend, offering many models that allowed the use of E100 ethanol.

Parallel to all this, the sugar-energy sector responded to the market with strong investment in greenfields , inaugurating more than 100 plants in 10 years. Our border limited only to the states of São Paulo, Minas Gerais and Paraná has reached the Center and West regions with force, with new projects, especially in Mato Grosso do Sul and Goiás.

Thus, the crushing of the Center, South jumped from 300 to more than 600 million tons in less than 10 years. In addition to the domestic market, we opened borders abroad, increasing our share in the United States, Europe and Asia.

At the turn of the century, the euphoria for a more sustainable world, with the use of renewable energy in the transport segment, made the private and public sectors unite and commit to sustainability. Everything was heading towards the future, where the share of hydrous ethanol (E100) would grow year by year, taking the place of fossil fuel, gasoline.

We reached 2012 with more than a hundred projects implemented and consolidated in the Center-South region. In 2012, we had a change of government and a complete change of priorities. The princess of the moment became the Pre-salt.

Total focus on oil exploration in deep waters, investments and incentives in fossil energy return to the fore. Gasoline, under the pretext of controlling inflation, was frozen and subsidized, with prices lower than those practiced in the international market. Biofuel projects, dozens of them in the maturation phase, amortization commitments in progress, are beginning to change hands.

Projects that were born from traditional and enterprising families, until then the predominant profile of the sector, had to transfer their assets to the most diverse sectors of the economy. Trading companies, investment funds, distributors, among others, helped and succeeded many plants.

It is also important to highlight the closure of dozens of plants and distilleries that could not withstand the high industrial and agricultural costs, which were not matched by Petrobras' frozen and subsidized gasoline prices. Since 2013, we have had no more “new projects” in our sector. We stopped investing altogether. Let's look at the numbers for the last 10 years.

In the 2013 and 2014 Harvest, we crushed 600 million tons of sugarcane and, since then, we have had zero growth, oscillating negatively, depending on weather conditions. ( See details in the highlighted graph: “Evolution of sugarcane crushing in the Center, South”);
Our amount of Total Recoverable Sugar remains at 80 million, with small fluctuations;
In terms of productivity (Ton of Sugarcane per Hectare), we regressed, we were unable to surpass 80 tons per hectare. ( See details in the highlighted chart: “Evolution of agricultural productivity of sugarcane in tons per hectare in the Center, South”);
Stable sugarcane planted area, with 7,600 to 7,800 thousand hectares;
The participation of the hydrated (E100) in the Otto cycle changes, depending on the mix more or less sugar in each harvest;
Only 5 states are responsible for the demand for 85% of hydrous ethanol (E100) sold in the country.

In 2016, he takes over the Temer government and, with the arrival of Pedro Parente as president of Petrobras, changes the scenario, opening up new prospects for the renewables market.

Fuel prices in Brazil are now aligned with international prices, allowing greater predictability for the sugar-energy sector;
Incentive to the use of biodiesel, with a gradual increase in the mixture;
RenovaBio program and commercialization of decarbonization credits.

What we have seen in the last 5 years with this positive signaling has been the return of investments in renewable fuels. Corn ethanol plants (greenfields) are being inaugurated and, today, already produce 15% of the total ethanol produced in the country. Many projects under construction, ensuring an increase in supply for the coming years.

Dozens of biodiesel plants were inaugurated, distributed to the 4 corners of the country, with an installed capacity of more than 12 million cubic meters, for a market of 6 million cubic meters in 2022 for blending B10. Therefore, with the potential to calmly serve the market with B15, as set out in the schedule by the National Council for Energy Policy for 2023.

As we know, “Every investment depends on the business environment we live in, with economically sustainable public policies and with due legal security”. The signs given to the renewable fuels sector in the last year were once again worrying, with changes in the rules that were established, compromising the results of companies that invested in the sector, again creating strong legal uncertainty.

The reduction of 30% of the biodiesel market, with the mix until then from 13% to 10%;
Rate of federal taxes (Contribution for Intervention in the Economic Domain, Contribution for the Financing of Social Security and Social Integration Program) being zeroed for common gasoline and ethanol, reducing the competitiveness of ethanol and not recognizing the various advantages that biofuel provides for health, environment, economy, job creation and development of Brazilian municipalities;
State taxes (Tax on Circulation of Goods and Services), reduced in percentage terms and with the Weighted Average Price to the Final Consumer being charged on the average of the last 60 months for gasoline (low price), while hydrous (E100) is charged on the real market price, which contributed to an increase in the loss of competitiveness of hydrated products;
The extension of the deadline for meeting the target of decarbonization credits depreciated the prices of decarbonization certificates by more than 50%.

We know that Brazil has enormous potential for the biofuels market. In the Otto cycle, the hydrous ( E100 ) participates with less than 20% of market share, while the flex fleet fuel is 83%, cars that could use hydrated ethanol, therefore with potential to grow 4 times the current sales volume.

In diesel oil, we are importers of 25% of the volume consumed in the country, we could expand the mixture and reduce external dependence. We have land, climate and, especially, technology and an experienced workforce with the ambition to grow and invest. The public sector lacks the necessary guarantee, with a long-term policy that ensures confidence and return to the entrepreneur.

We are facing a new government in the year 2023, in which we deposit and aim for a safe business environment, meeting the commitments we assumed in the various COPs; RenovaBio 's goal of selling 47 million cubic meters of ethanol in 2030, with incentives for renewable energies in the energy transition we are experiencing.

It is necessary to correct the wrong decisions, taken in the heat of the last elections, to reassure and assure the private sector confidence in maintaining and expanding the necessary investments to meet the enormous potential existing in the renewable fuels segment.