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Agricultural insurance support continued to be provided to producers through four main programmes, either in the form of insurance premium subsidies covering the difference between a fixed premium and market rates through a discount in the fee to farmers (fixed percentage), or by compensating farmers for production losses due to natural disasters. (...)

Agricultural zoning requirements continue to link agricultural support to environmental sustainability. They condition producers' eligibility for concessional credit and subsidized insurance programmes. Compliance with zoning applies to all concessional credit and all insurance premium subsidies for any product covered by the zoning (Section 4.2.4.1). In addition, several specific programmes for both the commercial and family farm segments promote sustainable agricultural practices; they include credit for plantings on unproductive and degraded soils, credit for forest planting, and credit to modernize production systems and preserve natural resources (Section 4.2.4.1).

Brazil, a net exporter of crude oil, remains self-sufficient in primary energy (except for natural gas, coal, oil derivatives and hydropower). From January to November 2016 it produced a monthly average of 3.13 million barrels of oil equivalent per day (MMboe/d), up 3.46% compared to the same period in 2015, during which 3.03 MMboe/d were produced. In 2015, the energy matrix produced 286,471 tonnes of oil equivalent (toe) (253,174 toe in 2010), which exceeded by 9.9% (about 5% in 2010) its final consumption. The Brazilian energy matrix remains one of the greenest in the world; in 2015, 41.2% (39.4% in 2014) of energy came from renewable sources compared to an average of less than 15% for the rest of the world. In 2015, it consisted of oil and oil derivatives (37.3%), sugarcane (16.9%), natural gas (13.7%), hydropower (11.3%), wood and vegetable coal (8.2%), coal (5.9%), other renewables (4.7%), uranium (1.3%), and other non-renewables (0.6%). Manufacturing and transport are the major energy consumers and represented 32.5% and 32.2% of final consumption respectively.

Brazil's Ten-Year Plan for Energy Expansion 2024 (Plano Decenal de Expansão de Energia 2024) is focused on striking a balance between the economic growth projections and the necessary expansion of energy supply, as well as ensuring energy supply at the appropriate cost and on a technical and environmentally sustainable basis. It also, inter alia, aims at raising the share of renewable sources in the energy and electricity generation matrixes to 45.2% and 86% by 2024 respectively. To attain these objectives, a total investment of R$1.4 trillion is planned, of which 70.6% in oil and natural gas, 26.7% in electricity, and 2.6% in liquid biofuels. Furthermore, in November 2016, an Investment Partnership Programme set the priority areas for action in energy and mining. These priorities involved bidding rounds of blocks of oil and natural gas, electricity distribution concessions, hydropower plants concessions, and operation/management concessions for mining projects with assets owned by the Mineral Resources Research Company (CPRM). The National Bank for Economic and Social Development (BNDES) would be in charge of the divestment in the electricity distribution service. These bidding rounds provide opportunities for both public and private (domestic and foreign) companies.

Under the Constitution, Brazil's hydropower sources and mineral resources (including oil and gas), whether in the subsoil, the continental shelf, or in the exclusive economic zone, are the exclusive property of the State. The sector remains dominated by state companies (Sections 4.4.3 and 4.4.4). The Ministry of Mines and Energy (MME) implements the general policy for the sector and chairs the National Energy Policy Council (CNPE), which proposes policies and regulations pertaining to hydrocarbons, biofuels, and electricity to the President. Policy for the ethanol and sugar industry is also determined by the Inter-Ministerial Council for Sugar and Alcohol (CIMA). Two autonomous regulatory agencies are linked to the MME: the National Agency for Petroleum, Natural Gas and Biofuels (ANP), which regulates hydrocarbons and biofuels (except for state-level distribution of natural gas); and the National Agency for Electrical Energy (ANEEL), responsible for regulating and overseeing the electricity sector. In the downstream segment, all activities involving petroleum products, as well as the transportation, processing, storage, liquefaction and re-gasification of natural gas, remain subject to ANP authorization, while importation and exportation are subject to authorization by the MME. Gas transmission pipelines and storage facilities projects must also be, in general, proposed by MME and undergo an auction conducted by ANP. The Energy Research Company (EPE) supports planning, inter alia, in areas such as electricity, oil, and natural gas and its derivatives, coal, renewable energy sources and energy efficiency.

The production-sharing regime is aimed at lowering the exploration risk, maximizing the government take from oil production, and achieving a more equal distribution of its proceeds among Brazilians; revenue from production-sharing contracts is to finance education, poverty reduction, and environmental initiatives. (...)

During the review period, Brazil retained its position as the world's second-largest producer and exporter of ethanol as output grew from 23.5 million m3 to 30.2 million m3 and exports slowed down (2012-2014) before rising by 33.6% in 2015. In 2016, the total number of sugar-ethanol mills was estimated at 378 units; PETROBRAS is a shareholder in 11 units which processed about 40 million tons per year of sugarcane during the review period. In the 2012/13 harvest, they produced 1 billion litres of ethanol. In its Strategic Plan 2017–2021, PETROBRAS foresees a regression of its biofuels production. The market share of PETROBRAS in Brazilian ethanol production is quite insignificant. The ethanol fuel industry remained dependent on sugar output, support and pricing developments as well as petrol prices subsidization over recent years (see below and Section 4.2.3.1.3).

Since April 2010, Brazil has reduced its import tariff on ethanol (HS 2207) from 20% to zero by including it in its national basic "list of exceptions" to the MERCOSUR CET; as of 24 September 2015, this and other exceptions were extended until 31 December 2021 (Sections 2.5.2.1.1, 3.1.3.1 and 3.1.3.2).

The change in ethanol blend ratio in gasoline is a policy instrument used when the biofuel supply is low. During the review period, the mandatory ethanol blend ratio, which may range from 18% to 27.5%, was raised for regular gasoline from 20% (October 2011-April 2013) to 25% (May 2013 March 2015) and as from 16 March 2015 it has been at 27% (E27). The blending requirement for premium gasoline remains unchanged at 25%. Ethanol prices are not controlled, and fluctuations in relative prices lead to changes in consumption patterns; as sugarcane represents 60%-70% of the cost of producing ethanol, high sugar and therefore ethanol prices act as a disincentive to the use of ethanol at petrol stations. Between 2012 and 2015, the average retail price for ethanol rose progressively from R$1,943 per litre to R$2,230 per litre. This increase was driven by the re-introduction of the Contribution for Intervention in the Economic Domain (CIDE) levy on gasoline, the maintenance of a zero rate of contributions to the social integration programme (PIS) and to finance social security (COFINS) (PIS and COFINS) taxes on ethanol and their increase for gasoline, and the readjustment of the ex-refinery prices for gasoline A and diesel (Section 4.2.3.1.3), as well as the 34% rise in demand for hydrated ethanol in 2015.

The National Bank for Economic and Social Development (BNDES) continues to provide specific administered interest rate credit lines for the sugar, ethanol, and bioenergy industries to fund investments on sugarcane production (Section 4.2.4), expansion of industrial capacity for sugar and ethanol, sugarcane biomass technology, cogeneration, logistics, and multimodal transportation. Total financing for the industry in 2015 was R$2.74 billion, down 60% from 2014 (R$6.8 billion) due to financial constraints faced by the Federal Government. The ethanol stock programme, also known as the BNDES PAISS programme, which offered up to R$500 million per beneficiary and was due to expire in 2013, was extended until 2015.