The first real milestone for a market that is still taking shape
In early April, Brazil reached a point the energy sector had been awaiting for months. On April 1, 2026, the National Energy Policy Council (CNPE) approved the decarbonization target for natural gas producers and importers: a 0.5% reduction in emissions through the participation of biomethane in consumption.
The decision closed a cycle of uncertainty that had already led to the cancellation of four scheduled meetings and frustrated market expectations throughout 2025. But it also clearly revealed the sector’s real condition: the mandate exists, the regulation is complete, the instrument is active, and there is still a considerable path ahead before the policy can deliver on its promise of large-scale decarbonization.
What the mandate is and why it matters
The Fuel of the Future Law, enacted in October 2024, created the National Natural Gas Decarbonization Program (PNDG). The core of the program is simple: natural gas producers and importers are now required to prove that a share of their product incorporates decarbonization attributes, in practice, biomethane or the certificates that represent its generation, the CGOBs, or Biomethane Guarantee of Origin Certificates.
The logic is similar to mandates already established for ethanol and biodiesel: by creating mandatory demand, the government provides enough regulatory predictability for the private sector to invest in production. The target established by law begins with a 1% emissions reduction in 2026 and may reach 10% by 2034. Decree No. 12,614, published in September 2025, regulated the instrument, assigning the CNPE responsibility for setting annual targets and the National Agency for Petroleum, Natural Gas and Biofuels (ANP) responsibility for oversight, certifier accreditation and the issuance of CGOBs.
In March 2026, the ANP completed its specific regulation for the certificates. Each CGOB will be valid for 18 months, a reasonable window to provide market participants with commercial flexibility.
Why the target was set at 0.5% and what it reveals
The approved 0.5% target is higher than the original proposal from the Ministry of Mines and Energy (MME), which had suggested 0.25% during the public consultation. Agribusiness, which represents the main biomass supply base for biomethane, pushed for a more ambitious target to make investments viable. Gas-consuming industries, concerned about cost and product availability, pushed in the opposite direction.
The compromise at 0.5% reflects, above all, a market diagnosis: the public call held by Petrobras for the acquisition of biomethane received insufficient proposals to cover even the 1% target established by law for the first two years. The state-owned company signaled to the government that meeting the original target in 2026 and 2027 would be “uncomfortable” for the market.
This result does not invalidate the policy. On the contrary, it indicates that the instrument is being calibrated based on reality. But it sends a clear message to those following the sector: the window to make the mandate viable in 2026 is narrow, and the challenges involve both the execution of the ANP’s regulatory agenda and the real sizing of biomethane availability in the country. Pillars
The CGOB: the new currency of gas decarbonization
For obligated parties, compliance with the mandate can be achieved in two ways: by acquiring and burning the physical biomethane molecule, or by purchasing CGOBs on the market, certificates that attest to the generation of renewable biomethane, regardless of where the gas was consumed.
This separation between the molecule and the environmental attribute is the financial core of the instrument. It allows biomethane producers in regions without access to the gas pipeline network to sell their decarbonization attributes to obligated parties operating in other states, creating a certificate market that is somewhat analogous to the REC, or Renewable Energy Certificate, market in the power sector.
For investors in biomethane projects, this mechanism significantly expands the potential market. A rural producer in Brazil’s Center-West, for example, does not need to be physically connected to São Paulo’s gas system in order to monetize environmental attributes. Revenue can come from selling the molecule to local consumers and selling the CGOB to distant obligated parties.
The liquidity of this market, however, is still incipient. The ANP chose to conduct a Regulatory Outcome Assessment after the first three years of the Biomethane Incentive Program, which indicates that the regulator already recognizes the need for future adjustments. For investors, this regulatory review horizon is a risk variable that must be priced into project feasibility models.
The diagnosis being built now
One data point deserves immediate attention: the Energy Research Office (EPE) will close, on May 31, the public call aimed at identifying the potential supply and demand for gas and biomethane, with plans to publish the first edition of the planning study in the second half of the year, in order to support the CNPE in defining the mandate for the following years. Abegas
This survey is strategic. Targets from 2027 onward will be calibrated based on this diagnosis, and the market still differs on the real volume available. The EPE has also identified two priority projects for biomethane injection hubs in the transportation pipeline network, indicating that the infrastructure bottleneck is beginning to be addressed at the planning level.
Where the sector stands and where it can go
Brazil now has 79 plants with biomethane purification technology, 54 of which are in operation and 25 under implementation, with a total capacity of 667 million Nm³ per year. The number of biogas production units for energy purposes grew 18% in 2024, and biomethane supply could triple by the end of 2026, with cumulative growth of 193%, driven by the entry of 30 new units. This, however, depends on all projects currently in the ANP authorization phase being effectively completed.
Abiogás projects that, by 2032, Brazil will have at least 200 biomethane plants, with capacity close to 8 million m³ per day. Brazil’s biomethane mandate, implemented from 2026 onward, has an initial target of 1%, which the law provides may scale up to 10% by 2034. If maintained, this growth curve would turn biomethane into one of the world’s largest gaseous biofuel markets.
The global scenario also reinforces this trend. The IRENA report released on May 20, 2026, in collaboration with the Brazilian COP30 presidency, points out that the world is entering a new phase of the energy transition, centered on electrification, renewable energy and the acceleration of the replacement of oil, fossil gas and coal. It also states that tripling renewable energy capacity and doubling energy efficiency improvements by 2030 are essential targets, but not sufficient on their own to deliver the global energy transition. Biomethane, as a renewable substitute for fossil gas in hard-to-electrify sectors such as heavy transport and process industries, fits exactly into the space that electric renewables cannot fill alone.
What investors need to assess
The mandate creates demand predictability. But three variables deserve careful attention before any investment decision:
Regulatory calibration risk: CNPE targets are reviewed annually. The legal flexibility that allows the council to reduce the target “for justified reasons of public interest” acts as a cushion for the market, but it is also a source of uncertainty for those modeling cash flow in long-term projects.
CGOB liquidity risk: The certificate market is still being formed. CGOB pricing depends on the relationship between supply, meaning available biomethane, and demand, meaning obligated parties. In an environment where supply is still limited, the price tends to favor the producer, but this could change quickly with the entry of the 30 new units expected.
Infrastructure opportunity: The two injection hubs planned by the EPE, in addition to the potential expansion of the gas distribution network, represent a window for infrastructure investments backed by public policy. Projects that connect rural producers to the transportation network have the potential to capture both molecule revenue and certificate revenue.
For companies with formal ESG commitments, especially those that report Scope 2 and Scope 3 emissions, contracting energy or gas with certified biomethane attributes is already a concrete and traceable alternative. In the free energy market, it is possible to contract biomass or landfill biogas energy, obtaining traceability through certificates, which directly affects Scope 2 emissions indicators and can be presented as an asset in ESG reports and carbon audits.
Conclusion
The biomethane mandate is a well-designed instrument for a market that is still learning to walk. The 0.5% target approved by the CNPE in 2026 is not a defeat for the policy. It is a realistic adjustment that recognizes that scale, infrastructure and regulatory confidence are built together, not by decree.
What is now at stake is the sector’s ability to demonstrate, over the next 24 months, that the growth curve set out in the Fuel of the Future Law is feasible. The EPE public call, whose deadline ends on May 31, will be decisive for this diagnosis. And CGOBs, still little known outside the sector, should gain increasing relevance as large companies need to prove decarbonization targets with traceable evidence.
For investors who want to enter early into a market still in formation, Brazilian biomethane offers solid fundamentals: clear public policy, abundant biomass potential and growing mandatory demand. The risk lies in the pace. And in this sector, the pace is always regulatory.
