Petrobras weighs entry into corn ethanol market

In a statement, Petrobras said it is conducting studies and analyses of potential opportunities in the bioproducts segment, which includes ethanol.

The company added that its current 2025-2029 business plan foresees investments in ethanol, “preferably through minority strategic partnerships or shared control with relevant sector players.” While not denying ongoing talks, Petrobras said there are no firm decisions on corn ethanol projects. “The company clarifies that there is no definition regarding the raw material to be used in ethanol production projects,” it noted.

The potential move comes amid Petrobras’s broader push in fuel distribution. Since the start of the Lula administration, the company has signaled interest in returning to the distribution market, fueling speculation about possible mergers and acquisitions in the sector. In August, Valor reported that Raízen shareholders Shell and Cosan were seeking a new partner.

Days later, O Globo reported that Petrobras was studying a stake purchase in Raízen. The company denied the claim. “There is no project or study of investment in ethanol or distribution with Raízen,” Petrobras said at the time. Sources close to the company told Valor that Petrobras is evaluating opportunities with several firms, but Raízen is not currently among them.

Another scenario raised in the market is a possible deal with Vibra Energia, the former BR Distribuidora privatized under former President Jair Bolsonaro. Analysts and industry executives, however, consider such a transaction unlikely, partly because Petrobras would need to launch a full takeover bid to acquire a stake.

There would also be potential antitrust hurdles due to the potential market concentration. As of the close of trading on B3 on Friday (Sept. 5), Vibra’s market capitalization stood at R$27.9 billion. The company declined to comment.

Despite these obstacles, Petrobras has criticized the privatization of BR Distribuidora, arguing that it distanced the company from end customers. It has since sought direct supply agreements with large clients for products such as diesel. With Vale, Petrobras has signed contracts for marine fuel containing 24% biodiesel (bunker B24). The company has also signaled plans to return to the cooking gas (LPG) market.

Industry sources say buying another distributor or building a new network from scratch may not be easy for Petrobras, given a brand agreement with Vibra that includes a non-compete clause until 2029. Until then, Vibra retains the right to use the BR brand, formerly owned by Petrobras.

Vibra has expanded in recent years through acquisitions aligned with the energy transition. It acquired Comerc Energia (now up for sale), at the time Brazil’s largest independent power trader, and Zeg Biogás, a biogas and biomethane producer. It also invested in the EV charging startup EZVolt and formed a joint venture with Copersucar for ethanol trading.

Together, Vibra, Raízen, and Ipiranga control 61.3% of the distribution market, according to Brazil’s Petroleum Agency (ANP), based on data from Sept. 3.

These moves come as the fuel market faces mounting challenges from irregular operators. Major distributors have been steadily losing share to companies engaging in practices such as fraud, adulteration, and tax evasion.