Brazil raises gasoline ethanol blend to 32% amid industry concerns

The National Council of Energy Policy (CNPE) approved a temporary increase of anhydrous ethanol in gasoline from 30% to 32% (E32), effective 1 August for an initial 180‑day period with a possible extension. The government says the change will cut gasoline imports by up to 500 million litres per month and could lower pump prices by roughly R$0.03 per litre, though regional estimates suggest the consumer saving may be as low as R$0.01.

Industry groups such as Fecombustíveis, Anfavea and Abeifa warn that the higher blend has not undergone long‑term durability testing. They cite risks of accelerated engine wear, increased water absorption by ethanol, and corrosion in older non‑flex and classic vehicles. The Public Ministry has asked the Federal Court of Accounts (TCU) to investigate whether the decision was based on adequate technical studies.

Pro‑ethanol bodies, including the Mato Grosso ethanol observatory and the state’s fuel‑retail union, highlight potential benefits: an estimated rise in national ethanol demand to 15 billion litres by 2026, creation of thousands of jobs, reduced reliance on imported fuel and environmental gains. Market analysts also note that higher ethanol supply is pressuring prices, while the sector remains wary of the practical impact on motorists.