ANP Updates Regulation Regarding Biofuels Production

Posted on: Jul 2, 2018

For the purpose of improving regulation and focusing on simplification, reduction of investment barriers and costs, the National Agency of Oil, Natural Gas and Biofuels (“ANP”) released Resolution 734 (“Resolution”), which was published on the Official Gazette on June 29th, 2018.

The ethanol and biodiesel production, which were regulated, respectively, by ANP’s Resolution 26/2012 and by ANP’s Resolution 30/2013 are now, in conjunction with biomethane production, regulated by the Resolution.

In order to streamline procedures to which biofuel producers are submitted, ANP will no longer require (i) to pre-approve the construction of production plants, (ii) to pre-approve assignments of tanking capacity and (iii) a minimum storage capacity for production plants.

The Resolution also does not (i) differentiate biofuel producers by their production capacity; (ii) require authorization for carrying out remote tanking on the producer’s branches, and (iii) demand presentation of business licenses, photographic records and production planning declarations.

According to the Resolution, the biofuel producer will depend on the granting of two distinct authorizations: (i) the biofuel production authorization (“AEA”) and (ii) the first operation authorization of biofuel production facilities (“AO”).

While the AEA shall be granted only once, to the principal place of business of the applying company, upon the fulfilment of legal, tax and regulatory requirements, the AO shall be granted to each of the applying companies’ production plants, subsequently to the fulfilment of technical requirements to be determined by the ANP. Therefore, the company which is authorized to produce biofuels shall hold only one AEA and one or more AO’s, depending on the number of production plants which it operates.
Considering that the production companies are exempted from obtaining an authorization for the construction of production plants, the respective works may be initiated at any time, provided that the ANP is previously communicated in regard of the location, the production estimates, investments and schedules. The producers shall nonetheless comply with the applicable rules and regulations, released not only by the ANP, but also by the municipal government, the fire department, the environmental authorities and other competent bodies.

The Resolution also sets forth the possible channels for the acquisition and commercialization of ethanol (caveating that commercialization activity is limited to fuel ethanol) and biodiesel (prohibiting the acquisition between producers, due to restrictions imposed on biodiesel auction’s tender notices). With respect to biomethane, the Resolution establishes the possible commercialization channels which may be chosen by producers.

Authorized biofuel producers may render storage and biofuel production services without obtaining further approvals from the ANP. Said producers are also allowed to make available their spare capacity to other authorized agents, as well as to complement their storage needs through other authorized agent’s facilities, provided that the applicable rules and regulations are duly observed.

Finally, it is important to highlight that the authorization applications filed with the ANP previously to the release and publishing of the Resolution shall be adjusted in order to comply with the rules implemented by the Resolution in ninety days, otherwise such application will not be processed.