New legislation passed by Congress late on Wednesday (13) reinstates a tax advantage for biofuels over fossil fuels, which should benefit ethanol companies in the long term, analysts said on Thursday (14). .
The so-called PEC of Benefits defined, among other things, that biofuels destined for final consumption must have lower taxes than fossil fuels for a period of 20 years.
The approved bill also calls for states and the federal government to return to preferential levels of taxation on biofuels seen before May 15, when another law changed how fuels would be taxed.
“From our point of view, this measure is very positive for agribusiness companies, as it will maintain the competitiveness of biofuels in the long term,” said Citi analysts Gabriel Barra and Joaquim Alves Atie in a note.
“With the constitutional guarantee that renewable fuels will pay lower taxes than fossil fuels (recognizing the negative externalities of fossil fuels), ethanol and other biofuels may have a much stronger outlook ahead,” the bank said. of BTG Pactual investments in a report.
BTG said Brazilian mills could be more profitable in their ethanol sales with the new legislation and gave a “buy” recommendation to companies whose shares were previously hurt by the changes made in May, such as Raizen, São Martinho, Jalles. Machado and Adecoagro.
The May tax changes ended up reducing the competitiveness of ethanol in relation to gasoline at the pump and put pressure on sugar prices in the international market, as mills started to produce less ethanol and more sugar.
This trend, according to analysts, can now be reversed.
The National Federation of Fuel, Natural Gas and Biofuel Distributors (BrasilCom) said in a statement that it supports the change, as it understands that it will bring greater balance between ethanol and C gasoline, in addition to paving the way for the implementation of tax monophasia also for hydrated ethanol.
In March, the National Congress passed a law that fixed the single-phase ICMS charge for various fuels, but left out hydrated ethanol.
As the approved PEC will have to be followed by a Complementary Law, BrasilCom sees an opportunity for congressmen to correct this exclusion of biofuel.
Source: CNN Brasil
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