Sao Paulo, 26 August (Argus) — A federal court in Sao Paulo has issued a preliminary ruling suspending sanctions imposed by the hydrocarbons regulator ANP under Brazil’s national biofuels program Renovabio.
The decision by the 3rd Regional Federal Court (TRF-3), issued on 21 August, blocks enforcement actions such as fines, license suspensions and the publication of non-compliance lists based on the so-called “new Cbio law,” approved last year.
The ruling highlights structural flaws in the Cbio decarbonization credit market, including speculative behavior and a lack of transparency in Cbio availability. It also questions the participation of non-obligated entities in Cbio trading and calls for the ANP to prove sufficient credit supply for obligated distributors.
Cbio prices were falling even before the ruling was released due to a combination of factors, including a large supply of credits, low demand from distributors, and market uncertainty stemming from judicial and regulatory developments. Some market participants were aware the decision was coming in the last week, which contributed to the price downfall.
The court ordered the ANP to halt sanctions and requested that the Brazilian stock exchange B3 provide data on Cbio transactions involving non-obligated parties. The decision adds to growing legal scrutiny of Renovabio’s implementation and its impact on fuel distributors.
By Rebecca Gompertz
