Biomethane, a renewable fuel derived from biogas, has gained prominence in Brazil as a crucial alternative for the energy transition, significantly contributing to the decarbonization of the energy matrix and corporate sustainability. Biomethane production, which comes from the treatment of organic waste, offers a solution that combines reducing greenhouse gas (GHG) emissions with the use of previously wasted resources, such as agricultural and urban waste.
According to recent data, the Brazilian biomethane market has enormous potential but still faces challenges, especially regarding distribution infrastructure. Most biomethane production is concentrated in plants near major waste centers, such as landfills and sugarcane processing units. One example is Urca Energia, one of the largest biomethane producers in Latin America, which operates with its associate Gás Verde. Urca Energia’s Seropédica (RJ) plant, the largest in the country, currently produces 130,000 cubic meters per day, with plans to expand to 200,000 cubic meters by the end of 2023.
The importance of biomethane goes beyond replacing fossil fuels like natural gas and diesel. It represents a viable solution for various sectors, such as agribusiness, transport companies, and waste management businesses, helping to reduce GHG emissions and meet strict environmental goals, like ESG (Environmental, Social, and Corporate Governance) requirements. Additionally, biomethane has competitive advantages, such as price predictability, as it is not subject to exchange rate or oil price volatility.
The current scenario in Brazil shows growing interest from companies and the government in promoting the use of biofuels. Programs like RenovaBio, which promote decarbonization credits, are boosting biomethane production by establishing economic incentives for companies that adopt cleaner energy solutions.
Urca Energia, for instance, has already invested around R$ 500 million in 2023 to expand its operations, both in biomethane production and in logistics improvements and increased renewable electricity generation capacity. Production is expected to reach 1 million cubic meters per day by 2025, positioning the company as a major player in the clean energy market.
Brazil has the potential to be a global leader in biomethane production, considering its vast availability of organic waste, mainly from the agricultural sector. However, logistical challenges, such as connection to gas pipeline networks, still limit the fuel’s reach. According to industry experts, expanding distribution infrastructure will be essential for biomethane to reach its full potential, allowing production to be more efficiently integrated into the national market.
Another important factor in the development of Brazil’s biomethane market is its competitiveness compared to other forms of renewable energy. In addition to generating clean energy, biomethane presents an economically viable alternative for reusing waste that would otherwise be improperly discarded, aggravating pollution and harmful emissions. This makes biomethane a solution that aligns economic efficiency with environmental responsibility.
Companies from various sectors, such as transport companies and large industries, are already transitioning to using biomethane in their fleets and production processes, driven by the need to reduce emissions and the commitment to sustainability goals. Additionally, fueling stations that operate with natural gas vehicles (NGV) can also benefit from biomethane, as the renewable fuel has the same applications and regulations as natural gas.
With continuous investments like those from Urca Energia and government support, biomethane can play a crucial role in Brazil’s energy transition. The country has the opportunity to lead the renewable biofuel sector, contributing to both energy security and climate change mitigation. Increasing production, along with expanding distribution infrastructure, will be essential for biomethane to reach its full potential and become a pillar of Brazil’s sustainable energy matrix.
Brazil needs to “boost” biomethane to maximize the use of this energy source. It is estimated that the country could produce up to 120 million cubic meters of biomethane daily by 2030, a volume capable of replacing 30% of all natural gas consumed nationwide. The expansion of this production is seen as crucial for the country to meet the Paris Agreement targets and advance toward carbon neutrality by 2050. One factor that can drive biomethane growth is the development of more robust public policies, such as expanding tax incentives and facilitating new investments in distribution infrastructure.
Brazilian legislation has advanced in promoting renewable energy, with emphasis on the Gas Legal Framework, approved in 2021. The new legislation simplifies the process for new natural gas and biomethane suppliers to enter the market, fostering competition and reducing bureaucratic barriers. This opens up opportunities for companies like Urca Energia to expand their operations and consolidate biomethane as a competitive alternative to fossil fuels.
The energy transition, therefore, depends not only on increasing biomethane production but also on creating a regulatory environment that allows sustained growth in this sector. Companies and governments need to work together to overcome logistical and technological challenges, ensuring that biomethane becomes an integral part of Brazil’s energy matrix.
