INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados
pressure today: sugar, soybeans, vegetable oils and corn. These demand vectors are distinctive in being driven by regulatory mandates and energy security imperatives rather than discretionary consumption, making them structurally more durable and less cycli- cal than traditional commodity markets. The International Maritime Organization approved a draft Net-Zero Shipping Framework at its MEPC 83 session in April 2025, setting targets to reduce the car- bon intensity of international shipping by at least 40% by 2030 and achieve net-zero greenhouse gas emis- sions by or around 2050. The formal adoption vote was adjourned to October 2026, but major shipping companies have already committed to fleet decarbon- isation programmes ahead of the formal regulatory trigger. The Framework’s greenhouse gas fuel inten- sity standard creates compliance incentives for biofu- els – including biodiesel and hydrotreated vegetable oil (HVO) derived from soybean oil and other vegetable oils – as drop-in transitional fuels capable of reducing life cycle emissions without vessel modifications. In Europe, the FuelEU Maritime regulation entered into force in January 2025, mandating a 2% reduction in the greenhouse gas intensity of fuel used by ships trading in European ports, scaling to 6% by 2030 and 80% by 2050; early evidence from the Port of Rotter- dam shows biofuel blend volumes holding year-on- year in the first quarter of 2026 as conventional fuel volumes fell sharply. A complicating design feature for vegetable oil producers is that FuelEU Maritime bars crop-based biofuels from compliance eligibility for vessels trading in European waters, incentivis- ing instead waste-derived feedstocks such as used cooking oil. This creates a bifurcated global demand picture: waste-derived feedstocks command a com- pliance premium in European maritime markets, while crop-based biofuels find growing demand in non- European shipping markets, domestic road transport mandates and aviation. The aviation sector represents the most favourable structural opportunity. Global SAF mandates are accelerating – the EU’s ReFuelEU Aviation regulation, ICAO’s CORSIA programme and the US Clean Fuel Production Credit are collectively creating demand for a fuel that represented less than 0.5% of global
aviation fuel consumption in 2026 but for which the International Air Transport Association projects a need for 500 million tonnes annually by 2050. The feedstock pathways most immediately scalable are HEFA (Hydroprocessed Esters and Fatty Acids), fed by vegetable oils and animal fats, and ATJ (Alcohol- to-Jet), derived from sugarcane, corn, and cellulosic ethanol. Countries with both significant biomass feed- stock bases and established biofuels infrastructure – Brazil first among them, but also the United States, Argentina, Colombia, Indonesia and Malaysia – hold a structural comparative advantage in meeting this demand. At its 82nd Annual General Meeting in Rio de Janeiro in June 2026, IATA identified Brazil as hav- ing the potential to produce approximately 12 million tonnes of SAF by 2030 – five times estimated global production in 2026 – by leveraging its sugarcane etha- nol base and soybean oil supply chains. Alongside liquid biofuels, the bioinputs sector (encom- passing biological nitrogen fixation, biostimulants, biopesticides and biofertilisers derived from microbial and plant-based sources) is emerging as a parallel strategic vector, made more urgent by the Strait of Hormuz crisis. As synthetic fertiliser prices spike and supply chains become geopolitically fragile, the sub- stitution of chemical inputs with biological alternatives becomes both an agronomic necessity and a sup- ply chain resilience imperative for producing regions worldwide. The challenge for both vectors – biofuels and bioinputs – is to align the regulatory, certification and invest- ment frameworks needed to deploy these technolo- gies at the scale and speed that the energy transition and food security agendas require. That alignment is itself a legal and governance challenge, requiring the development of new contract structures, sustainabil- ity certification systems, carbon-credit mechanisms and project finance models that can bridge the gap between existing agricultural value chains and the new markets opening up through decarbonisation mandates. The market will continue to reward issuers who evi- dence compliance, manage data well and align incen- tives across the chain – pairing innovation with legal clarity to support food security and climate goals.
10 A GRICULTURA L LAW 20 26
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