Decree signed by Paraguay's president regulates fuel blending and seeks to attract investments to the country's sugar-alcohol sector
Signed last Friday (1st), the regulation of the Ethanol Law in Paraguay imposes new constraints on the fuel industry to boost the sugarcane production chain. The decree, signed by President Santiago Peña, establishes that at least 50% of the ethanol used in blending with fossil fuels in the country must come from sugarcane.
The measure serves as a tool to protect the domestic market and attract capital to the Paraguayan sugar and alcohol sector. The central objective is to offer predictability to rural producers, ensuring a continuous demand that justifies new investments in industrialization and extraction technology.
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For Brazil, a global leader in biofuels, the Paraguayan movement represents an ambivalent scenario. On the one hand, the consolidation of a robust sugar-alcohol policy in its neighbor strengthens Mercosur’s decarbonization standard, facilitating the circulation of flex-fuel vehicles and opening doors for the export of Brazilian technology and industrial machinery. On the other hand, Paraguay’s quest for self-sufficiency tends to reduce, in the medium term, the historical dependence on imports of anhydrous ethanol from Brazil, requiring Brazilian refineries to seek new markets.
The new administrative structure institutes strict controls for acquisition verification and a supply schedule linked to the raw material used. Companies that do not comply with the mandatory blending percentages will be subject to severe sanctions and administrative rules. The implementation and supervision of the entire chain will be under the responsibility of the Ministry of Industry and Trade, which will act as a regulatory body to prevent fraud in the mixture.
With this regulation, the Paraguayan government hopes not only to reduce dependence on imported inputs, but also to add value to national agricultural production and foster the generation of formal jobs in rural areas.
