Factsheet: Ethanol Supply Contracts

Ethanol Supply Contracts

Key Information
The National Agency of Petroleum, Natural Gas and Biofuels (ANP) has regulated the ethanol sector since April 2011. ANP began to monitor the marketing trade of anhydrous ethanol between producers and distributors as of April 2012. Fuel distributors are required to adopt a yearly supply contract to meet purchasing targets. The target is equivalent to 90 percent of total gasoline C (gasoline blended with ethanol) sales from the previous year and will be enforced in the beginning of every crop year (April 1). If distributors choose not to set a supply contract and buy the product on a monthly basis (direct purchase), they are required to have stocks on the last day of the month equivalent to the volume of gasoline C marketed in the subsequent month of the previous year. ANP summarized the operations for the 2012/13 sugarcane/ethanol crop as follow: 54 fuel distributors which represent 90 percent of the domestic market chose the yearly supply contract option whereas 78 distributors (10 percent of the market) opted for the direct purchase system. Note that all large distributors as well as many small ones where able to meet the requirements for the contract option.
Increase the share of biofuels (in transport).