SOUTH AMERICA

Brazil’s new president faces pressure to make changes to the country’s biodiesel sector

Mauro Fernandes

Since the election of Luiz Inácio Lula da Silva as Brazil’s president last year, the country’s biofuels industry has been putting pressure on him to make significant reversals to the laissez-faire policies implemented by his right-wing predecessor Jair Bolsonaro, who lost the election last October.

The sector is concerned about a sluggish economy, which the OECD says will grow just 1.2% in 2023 (inflation stands at 5.77% – January figures). But the leftist leader, who has built a broad governing coalition, has delayed any announcements on market intervention until he feels he has secured more cooperation from a biofuel sector which overwhelmingly campaigned for Bolsonaro in October’s elections.

Lula was a staunch advocate of biofuels during his 2003–2010 presidency but his enthusiasm waned towards the end of his terms after the South American nation found massive pre-salt layer oil offshore reserves. His successor, former President Dilma Rousseff (2011–2016), also had a lukewarm relationship with the biofuels industry, with Brazilian agribusiness becoming more dependent on exports to China and less on biofuels.