Brazil has become a biofuel powerhouse. Decades of supportive policies and a booming agricultural industry have fostered large-scale adoption of low-carbon fuels in Brazil’s transport sector. The country is the second-largest ethanol and third-largest biodiesel producer in the world.

The industry is likely to face both headwinds and tailwinds in the coming decades, including a potential increase in domestic blending mandates and a reduction in ethanol demand for road transport due to rising electrification. The potential to be a global supplier of advanced low-carbon fuels, such as sustainable aviation fuel (SAF), could represent an important economic opportunity for Brazil but will not come without challenges.

A significant increase in SAF demand will depend heavily on policy and economic incentives, as SAF comes with considerably higher costs than its fossil-based counterpart. Even the United Nations’ regulating body for aviation is unlikely to spur significant S