Brazil energy debate intensifies over E32 ethanol mixture proposal

Brazilian political figures and industry leaders are clashing over the proposed increase of the mandatory anhydrous ethanol mixture in gasoline to 32% (E32). Senator and presidential candidate Flávio Bolsonaro criticized the measure, comparing it to ‘shrinkflation’ and expressing concerns regarding potential damage to vehicle engines.

In response, BNDES President Aloizio Mercadante labeled the remarks as ‘misguided’ and an attack on climate action, emphasizing that the transition to biofuels reduces petroleum dependency and supports the domestic industry. Senator Carlos Fávaro also defended the sector, citing technical tests from the Mauá Institute that confirmed the safety of the E32 blend.

Major sugar and ethanol industry entities, including Unica and Unem, issued a joint statement repudiating Bolsonaro’s comments, stating they ‘misinform the consumer’ and undermine a long-standing national energy policy. Meanwhile, the expansion of corn-based ethanol is significantly impacting the economy of Mato Grosso, which has emerged as a major production hub, driving industrialization and local job growth.