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The growing bunker fuel opportunity in Brazil

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By Lolade Aluko

· 10 min read

Brazil, a country endowed with vast natural resources across oil and gas, metals and agriculture, and a thriving maritime industry, has long been a strategic location for commodities trade, with Santos Port in Sao Paulo standing as the busiest port in Latin America. Recent efforts to diversify fuel suppliers beyond Petrobras have emerged within Brazil’s domestic fuel market, bringing a wave of optimism to the domestic bunker fuel market. This shift is poised to have far-reaching effects on the overall market dynamics, particularly at key hubs such as the Santos Port, and could unlock opportunities for alternative fuels. There are a number of opportunities and factors at play which are worth exploring.

Shipping fuels, or bunker fuel, refers to fuel commodities used to power shipping vessels in many different capacities. The bunker fuel market is continuing to diversify and develop on the basis of decarbonisation regulations imposed by the IMO, particularly the ambition to reduce carbon dioxide emissions significantly by 2050. This has boosted interest and supply ambitions for biofuels, methanol, ammonia and LNG within the shipping space, with different shipping companies taking different decarbonisation routes as part of their own commercial strategies. While Maersk has strongly backed methanol, for example, many have opted for LNG-powered carrier vessels for their strategies. 

Brazil remains the dominant economy in the Latin American region, with its economic growth massively supporting its ability to foster economic partnerships both within and outside the BRICS economies. In particular, the transformational changes of the oil & gas governance in Brazil is attracting new players to different sectors of its fuel markets. Alongside its strong potential and position in biofuels production, Brazil is positioned to grow in importance in the global oil market. This article focuses on the growing competitiveness in the bunker fuel space following Ipiranga’s announcement to enter the bunker fuel supply space.

Overview of the Brazil Petroleum Market: Discovery, Petrobras, and Industry Players

The history of Brazil's petroleum industry is marked by significant discoveries, the development of a state-controlled giant, and the emergence of key players in the market. The journey began in the early 20th century when oil exploration in Brazil gained momentum. The first significant discovery was in 1939 when oil was found in the Potiguar Basin. However, it wasn't until the mid-1950s that Brazil witnessed a game-changing event with the discovery of massive offshore oil reserves. This is when Petrobras, Petróleo Brasileiro S.A., played a central role in the development of Brazil's oil industry during these decades. The company expanded its operations, developed infrastructure, and achieved self-sufficiency in oil production. It also ventured into deepwater exploration, marking technological advancements.

The creation of Petrobras in 1953 played a pivotal role in shaping Brazil's petroleum industry. Established as a state-owned company, Petrobras was given a mandate to explore, produce, refine, and distribute oil and its by-products. The discovery of the giant Tupi oil field in the pre-salt layer off the coast of Brazil in 2007 further elevated Brazil's status as a major player in the global oil industry.

It was in 1997 that Brazil opened its oil industry to foreign companies, allowing them to participate in exploration and production activities. This move aimed to attract investments and expertise to further develop the sector. This attracted the entrants Shell and Petrogal, for example. The competitiveness of Brazil’s oil market has only grown, with Petrobras nevertheless remaining instrumental to the development of oil exploration, production and trade.

Overview of the Modern Oil & Gas Market in Brazil: Petrobras' Refinery Sales and the Move Towards a Less Monopolistic Structure

In recent years, Brazil's oil and gas market has undergone transformational changes, particularly with Petrobras' strategic decision to divest its refining assets. This move has aimed to introduce competition and reduce the historically monopolistic structure of the industry.

Petrobras, as the state-controlled energy giant, historically dominated the entire value chain of Brazil's oil and gas sector. This vertical integration included exploration, production, refining, and distribution. However, facing financial challenges and seeking to focus on core activities, Petrobras initiated a plan to sell a significant portion of its refining assets.

The divestment plan included the sale of several refineries across the country. Notable transactions involved refineries such as Abreu e Lima, Landulpho Alves, and Gabriel Passos. These sales marked a departure from Petrobras' historically centralized control over refining capacities in Brazil.

Petrobras, as the state-controlled energy giant, historically dominated the entire value chain of Brazil's oil and gas sector. This vertical integration included exploration, production, refining, and distribution. However, facing financial challenges and seeking to focus on core activities, Petrobras initiated a plan to sell a significant portion of its refining assets.

The divestment plan included the sale of several refineries across the country. Notable transactions involved refineries such as Abreu e Lima, Landulpho Alves, and Gabriel Passos. These sales marked a departure from Petrobras' historically centralized control over refining capacities in Brazil.

The sale of Petrobras' refineries has contributed to a less monopolistic structure in Brazil's oil and gas industry. The divestment strategy is aligned with broader economic reforms aiming to introduce market-oriented principles, foster competition, and attract private investments.

Private companies, both domestic and international, have entered the Brazilian refining sector through these acquisitions, increasing competitiveness and diversification across the region. This may give diverse opportunities to the bunker fuel space also, which supports the setting up of new Brazilian offices by a number of bunker fuel players in the past few years, including Monjasa and Integr8 Fuels.

Effect on Bunker Fuel Space in Brazil

In the same vein, Ipiranga, Brazil’s largest private fuels company, started offering LSMGO in the Rio de Janeiro port this year, delivered using their 1,400 cbm-capacity bunker barge CD Santos. This offers significant opportunities given Ipiranga’s long-standing dominance in the Brazilian market, with a strong logistics network across the states of Rio de Janeiro, São Paulo, and Rio Grande do Sul as well, where they operate Brazil’s oldest refinery (Refinaria Riograndense).

There are a number of conventional and alternative bunker fuel opportunities emerging in Brazil. Some key ones worth exploring are LNG and bio-LNG, LPG, and renewable fuels:

LNG and bio-LNG

Brazil has been making significant strides in the development of its Liquefied Natural Gas (LNG) market, driven by a growing demand for cleaner energy sources, efforts to diversify the country's energy mix, and efforts to supply LNG as a marine fuel also. Several ports in Brazil have been exploring or implementing LNG bunkering facilities, allowing ships to refuel with LNG to serve the growing LNG-fuelled vessel market. This will be particularly relevant for vessels operating in emission control areas.

The Guanabara Bay LNG import terminal, known as the GATE terminal, is the key LNG facility in Brazil. Located near Rio de Janeiro, it has the capacity to receive, store, and regasify LNG. The terminal plays a crucial role in meeting the country's natural gas demand, but may also serve as a provider of additional fuel options to Rio de Janeiro players in the bunker market. There have been discussions and plans for additional LNG terminals in different regions of Brazil, such as the Terminal Gas Sul (TGS) in Santa Catarina. These terminals are intended to enhance the country's energy security, provide flexibility in the energy supply chain, and support the growth of the LNG market.

While there are positive developments in Brazil's LNG market, challenges persist. These may include regulatory considerations, infrastructure development, and the need for continued investment. However, the overall outlook for Brazil's LNG market is promising, with increasing interest in LNG as a cleaner fuel and ongoing efforts to strengthen the country's position in the global energy landscape.

A secondary opportunity in Brazil is bio-LNG, that is, liquefied biomethane made from agricultural waste or feedstocks. Brazil is commonly considered a strong contender for growth of the biomethane market, and there have been first movers developing projects to this effect. Golar Power, for example, one of the world’s largest LNG integrated companies, has looked to tap into biomethane resources in its LNG plants. This ambitious goal is part of the Brazilian National Novo Mercado de Gás Program (New Gas Market Program) that considers LNG an economical and low carbon footprint fuel source.

There is still some work and clarification to be completed on the use of liquefied biomethane in LNG-powered vessels to ensure the highest safety compliance is met. Nevertheless, the use of biomethane fuels could allow for significant carbon savings on a well-to-wake basis, and Brazil is well-positioned to lead in this field, particularly within the Latin American region.


Liquefied Petroleum Gas (LPG), also known as autogas, is a versatile hydrocarbon fuel commonly used for heating, cooking, and increasingly as a transportation fuel. LPG is a mixture of propane and butane, which are byproducts of the petroleum refining process and natural gas processing. In the context of the marine industry, LPG is considered a cleaner-burning alternative to conventional marine fuels, contributing to reduced emissions.

The exact percentage of carbon savings on LPG utilisation depends on several factors, including the specific composition of the LPG blend and the type of conventional fuel being displaced. LPG is considered low-carbon compared to VLSFO, for example, and its combustion generally results in lower emissions of sulphur oxides (SOx) and nitrogen oxides (NOx) compared to traditional marine fuels. This contributes to improved air quality and helps meet stringent emission standards. However, LPG is generally considered a cleaner option, offering a reduction in carbon dioxide (CO2) emissions, as well as other pollutants such as sulphur oxides (SOx) and nitrogen oxides (NOx).

LPG has been widely available in Brazil for various applications, including residential, commercial, and industrial use. The availability of LPG as a marine fuel has been growing, with capacity expected to reach 11.86 million tonnes by ChemAnalyst. This represents a 4.31% expected CAGR rate.

Brazil has a well-established LPG supply infrastructure with storage facilities, distribution networks, and refuelling stations.  This infrastructure supports the accessibility of LPG for various applications, including potential use in the maritime industry.

Additionally, in 2022, there were reports of ANP, Brazil’s oil and gas regulator, seeking to reduce the risk of LPG supply shortage. As such, LPG is considered a strategically important fuel in Brazil’s energy matrix, and potential investments in LPG could lead to offerings in the bunkering space as well. 

Though considered a transition fuel option, the availability of LPG remains healthy, with newbuilds ordered to become operational during the decade. 

Renewable Fuels

Brazil has historically been a successful biofuels market, which is becoming an increasingly important trend within the maritime industry. For example, Petrobras has conducted a test at the Riograndense Refinery, where they successfully processed 100% soybean oil in a Fluid Catalytic Cracking (FCC) Unit at the Refinery. The products they expect to produce within the renewable fuels space include bio-LPG, renewable marine fuels, renewable propylene, and bio-aromatic hydrocarbons (BTX – benzene, toluene, and xylene). This positions Brazilian actors in good stead for changes and developments in the bunker fuel markets. 

Brazil's RenovaBio program, implemented in 2020, is designed to incentivize the production of biofuels. It establishes carbon credits, encouraging the reduction of greenhouse gas emissions in the transportation sector, which might expedite the investment in biofuels supply under this program. Finally, Brazil is the world's second-largest producer of ethanol, following the United States. The country has a significant production capacity, with numerous ethanol plants located in key sugarcane-growing regions. The use of ethanol as a potential blend in methanol-fuelled vessels could potentially heighten Brazil’s strategic positioning within shipping in the years where methanol-fuelled ship orders are completed.

Overall, multiple suppliers and demand for diverse fuel options often bring diverse approaches and innovations to the market. This can result in the introduction of new and improved fuel products, including those aligned with emerging environmental regulations and sustainability goals, which can benefit multiple strategic ports across Brazil’s coastline (Rio de Janeiro and São Paulo). Additionally, the entry of new suppliers often involves infrastructure investments. This can lead to the development of state-of-the-art facilities, including storage tanks and bunkering infrastructure, further enhancing the port's capabilities.


The diversification of fuel suppliers beyond Petrobras in Brazil marks a pivotal moment for the domestic bunker fuel market. This shift promises enhanced market competition, increased resilience, and a platform for exploring alternative and environmentally friendly fuels, for which Brazil is already well-positioned. 

The Santos Port in particular, as the linchpin of Brazil's maritime trade, stands to benefit significantly from these changes, experiencing improvements in supply chain robustness, cost competitiveness, and infrastructure development. Moreover, the emergence of alternative fuel opportunities aligns with the global trend toward sustainability, positioning Brazil's maritime industry for a more environmentally conscious and economically vibrant future. As the industry embraces diversification, it sets sail into a new era of possibilities, characterised by innovation, resilience, and a commitment to increased competitiveness and diversification within its offering.

Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Lolade Aluko is a Marine Fuels Trader at Peninsula, a global leader in marine energy solutions. She has previous experience in the financial services industry, with a focus on mining, metals and industrial decarbonisation. Lolade has a range of expertise in industries spanning renewable energy and global commodity supply chains.

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