The decarbonization of the global energy matrix is one of the biggest challenges facing humanity this century. With more than 80% of the global energy matrix still based on non-renewable sources, according to data from the Energy Institute, and the high costs associated with changing this matrix, reducing the effects of climate change requires innovative and low-cost solutions to that the replacement of fossil fuels does not imply, as a whole, a reduction in global economic and social development.

The aviation sector has one of the biggest challenges for decarbonization and sustainable aviation fuel is the best alternative. According to the International Energy Agency, the aviation sector is responsible for 2% of global Greenhouse Gas emissions, and its decarbonization depends on an alternative to fossil kerosene that (1) has high energy density, (2) is safe for different flight situations, and (3), preferably, requires little or no investment in existing aircraft. Among the existing alternatives, sustainable aviation fuel is the fuel that best meets these conditions, as it has a chemical formulation similar to that of fossil kerosene, and can currently be used in a mixture of up to 50% with fossil kerosene, by any aircraft. currently in service.

Thus, the International Civil Aviation Organization projects that sustainable aviation fuel will be responsible for 70% of the reduction in emissions from the aviation sector to reach the aspiration of net-zero emissions by 2050.

Sustainable aviation fuel, produced from biomass, is the most promising and Brazil, as the largest grain producer and 2nd largest ethanol producer in the world, has a great opportunity to develop production in the country. Among the various production routes for sustainable aviation fuel, those based on vegetable oils and ethanol stand out for being those with the lowest cost and highest production capacity in the medium term, as they already have a robust and well-established production chain, capacity for growth production in the medium term. Estimates from the International Civil Aviation Organization indicate that, in the scenario of widespread adoption of sustainable aviation fuel and technology such as the current one, 55 to 65% of sustainable aviation fuel produced in the world will come from sources derived from biomass, in which vegetable oils and ethanol prove to be the main inputs for these fuels.

Brazil can become the main producer of sustainable aviation fuel, increasing its role in the decarbonization of the global economy and generating thousands of jobs in the green economy, if it offers attractive conditions for investment in advanced low-carbon fuels in the country and actively stimulates adoption of such fuels in the local and global market.

Brazil is able to produce sustainable aviation fuel with one of the lowest costs and highest efficiency in reducing carbon emissions in the world. To achieve this, the country needs to develop 3 structuring actions for the local and global market: (1) exemption from investments and plant operation in the first years of operation, (2) definition of decarbonization targets that guarantee a minimum volume of consumption in the country, (3) promotion of the global aviation carbon market, in which Brazilian airlines can sell their surplus credits to international companies.

Action 1: exemption from investments and operation of biorefineries in the first years of operation.
A commercial-scale sustainable aviation fuel biorefinery requires investments of around 3 to 5 billion Reais, invested in 2 to 3 years of construction, which will be amortized over 10 to 15 years of operation to return the capital employed by shareholders. These are infrastructures with very high capital intensity and high operational complexity, which use cutting-edge technology and which pose great risks to investors. Therefore, countries like the United States are offering tax relief programs such as those of the Inflation Reduction Act, eliminating producers' tax obligations in the first years, guaranteeing cheaper products and with a lower risk of operation failure in their most sensitive years. The elimination of tax collection during the investment amortization period and/or the creation of free zones for advanced fuels would guarantee Brazil's attractiveness to investors in the green economy compared to neighboring countries and developed countries, which already offer similar programs and are ahead in announcing projects.

Action 2: definition of decarbonization goals that guarantee a minimum volume of consumption in the country.
For investments in sustainable aviation fuel biorefineries to be effectively implemented in Brazil, local demand needs to be large enough for local production to be scaled. The Fuel of the Future bill (Bill 4196 of 2023), currently under discussion in the National Congress, brings advances in the adoption of sustainable aviation fuel in the country's domestic flights, with a definition of a reduction in carbon emissions of 10% in 2037.

However, for Brazil to be able to unlock the necessary investments, there must be at least an expected consumption of sustainable aviation fuel of the order of 10% of the total kerosene consumed in the country in 2030, in line with the levels that European regulations define at the moment.

Action 3: promotion of the global aviation carbon market, in which Brazilian airlines can sell their surplus credits to international companies.
Brazilian sustainable aviation fuel, especially from ethanol, has competitive values for reducing carbon emissions compared to fossil fuels. However, the transit of sustainable aviation fuel or its raw material from Brazil to other countries considerably increases the price of fuel and related emissions, doubly contributing to the increase in the cost per avoided emission.

As carbon emissions are a global problem, and from the point of view of climate impact, there is no difference whether the reduction in emissions occurs in one part of the planet or another, the most efficient way to achieve global decarbonization is to maximize consumption of sustainable aviation fuel in the country that produces the inputs and fuels. To achieve this, there needs to be a global market for credits on fuel consumed, in which airlines operating in Brazil sell excess credits with airlines in other geographies, minimizing the displacement of renewable fuel and capturing the price differential over the carbon avoided. In this design, (1) the lowest cost per avoided carbon is guaranteed for the global aviation sector, (2) the production of sustainable aviation fuel in the country is increased , increasing the production scale and gains for the national economy, and (3) an additional line of revenue is generated for national airlines, increasing the financial health of the sector.

Brazil has the capacity to become a global leader in the production of advanced low-carbon fuels, if it offers conditions as attractive as those offered by the United States and other neighboring countries. It is up to the country to organize itself to guarantee the conditions, so that it does not become, once again, a mere supplier of raw materials with low added value.