Tauil & Chequer Advogados in association with Mayer Brown leads discussion on Agribusiness and the Energy Transition

The integration of agribusiness and the energy sector represents the newest frontier for growth in Brazil's agricultural market. In a sector that accounts for more than 20% of the country's GDP and is facing increasing pressure to decarbonize, renewable energy generation offers one of the greatest opportunities to improve efficiency, reduce emissions, diversify revenue streams, and drive long-term transformation.

These topics were at the center of the event "Agribusiness and the Energy Transition: Biogas, Biomethane and the Free Electricity Market," which brought together industry specialists, clients, and professionals to discuss the challenges and opportunities of the energy transition in agribusiness, as well as how the integration of agricultural production and renewable energy generation can foster new business models.

Our partners Christian Roschmann, Tiago Macêdo, Débora Yanasse, and Lilian Toscani led strategic discussions on the expansion of biogas and biomethane, the impacts of Brazil's electricity sector reform on the free energy market, and emerging trends in self-generation structures.

"Biomethane has the potential to become a cornerstone of Brazil's decarbonization strategy for heavy industry and transportation, while also reducing the country's reliance on fossil natural gas. However, significant structural challenges remain, including the high costs of transporting offshore-produced gas, disparities in distribution infrastructure across states, and limited supply alternatives, such as the development of unconventional resources. Overcoming these bottlenecks will be essential to strengthening the competitiveness of renewable gas and accelerating the development of a more sustainable and resilient energy matrix," said Tiago Macêdo.

Regarding the electricity sector, Débora highlighted the challenge of ensuring that the competitiveness of Brazil's electricity generation costs is reflected in the tariffs ultimately paid by consumers, which remain among the highest in the world. There is already broad consensus within the industry on limiting subsidies for certain renewable energy sources while creating room for other technologies that can provide greater system flexibility, such as biomethane and battery storage. Self-generation is expected to remain an important strategy for reducing electricity costs, although with new restrictions on exemptions from sectoral charges.

"We are experiencing a period of profound structural transformation in the electricity sector, driven by the imminent full opening of the free energy market and the incorporation of new technologies such as artificial intelligence, battery storage, and pumped-storage hydropower plants," Débora noted.