On June 19, the Brazilian senate approved a legislative proposal that aims to allow ethanol producers to sell fuel directly to gas stations by a vote of 47 to two. UNICA, the Brazilian sugarcane industry association, has spoken out against the proposal.

Information released by Brazil’s senate states that the proposal aims to increase competition in the fuel market, consequently lowering the price for consumers. The draft resolution will now be considered by Brazil’s house of representatives.

Currently, ethanol producers can only sell fuel to suppliers registered with the National Petroleum, Natural Gas and Biofuels Agency (ANP), with a distributor authorized by the agency, or to a foreign market. Sen. Otto Alencar, who authorized the bill, said the change is needed to increase competition and reduce prices.

On June 13, UNICA issued a statement opposing the direct sale of fuel ethanol by the producer to fuel stations, saying that the policy would make it difficult to implement RenovaBio, the country’s new national biofuels policy.  

UNICA said fuel distributors are a strategic part of RenovaBio, as they must meet decarbonization goals through the purchase and sale of carbon emission reduction certificates. UNICA also said that Brazil’s fuel tax structure would need to be changed in order to implement proposal, as certain taxes are currently collected on the distributor level.