On June 19, 2026, the Petrobras board of directors approved the final investment decision for a $1.2 billion biorefinery at the Presidente Bernardes complex in Cubatão. The facility will produce sustainable aviation fuel and renewable diesel.
When commercial operations begin in late 2030, the plant will process 950,000 tons of soybean oil and beef tallow annually. Output will range between 15,000 and 16,000 barrels per day.
Corporate governance and market pricing
The company filed the decision as a market communiqué rather than a material fact. The capital allocation was already modeled into its 2026-2030 business plan, meaning equity markets had largely priced in the expenditure. The board's vote moved the project from the planned portfolio into active execution.
Petrobras structured the construction into five contracting packages. Bidding for the first phase, which covers the pre-treatment unit required to strip impurities from animal fats and plant oils, is already open.
Capital intensity and chemical processing
Petrobras licensed Honeywell UOP's HEFA process for the chemical conversion. The economics reflect the high capital requirements of hydrogen-intensive biofuel refining. At roughly $80,000 per flowing barrel of capacity, the Cubatão facility costs nearly three times the baseline capital expenditure of a conventional fossil-fuel refinery.
Petrobras plans to absorb this premium using cash flows from its legacy offshore operations, assuming Brent crude prices hold between $60 and $70. The company will also need to integrate the new plant with its existing hydrogen generation units, which currently rely on natural gas reforming, while managing the carbon footprint of that hydrogen supply.
Simultaneously, the state-owned oil company is evaluating an alcohol-to-jet facility at its Paulínia refinery. That separate project would use ethanol rather than soybean oil, providing a hedge against agricultural commodity price spikes.
Regulatory mandates drive domestic demand
Domestic demand for the Cubatão output is guaranteed by Brazil's 2024 Fuel of the Future law. The legislation dictates a 1% reduction in domestic aviation emissions by 2027, scaling to 10% by 2037.
See Also: How a Budget Freeze is Grounding Brazil’s Aviation Sector
Because sustainable aviation fuel cuts emissions rather than eliminating them entirely, airlines will need to mix approximately 1.6% to 2% of the biofuel into their tanks to hit the first-year regulatory target. The plant’s 2030 start-up coincides with the year emissions reductions are required to reach 4% and the United Nations’ CORSIA program on international flights enters its mandatory phase.
The facility's dual-output design allows it to produce renewable diesel alongside aviation fuel. A parallel mandate in the 2024 law allows the government to require up to a 3% blend of renewable diesel in commercial transport, giving Petrobras the ability to adjust its product mix based on which fuel offers higher margins.
Competitor timelines and supply chain constraints
Petrobras is entering the construction phase later than private capital in the region. Acelen, backed by Abu Dhabi's Mubadala Capital, secured $1.5 billion to build a 20,000-barrel-per-day facility in Bahia, targeting an early 2029 start. Be8 is constructing a $1 billion export-focused plant in Paraguay's free trade zone, scheduled to come online between 2025 and 2027.
A third competitor, Brasil BioFuels, planned a 10,000-barrel-per-day palm oil facility in the Amazon but recently faced government embargoes over illegal deforestation in Roraima. This regulatory action highlights the primary operational risk for all operators in the sector: feedstock sourcing.
Purchasing nearly a million tons of agricultural oils annually puts Petrobras in direct competition with food producers and existing biodiesel mandates. To sell its aviation fuel at a premium in regulated markets, the company has to secure massive volumes of soybean oil and tallow without triggering indirect land-use penalties from global certifiers.
