How the India-Brazil Biofuel Alliance Could Reshape Global Energy
Anchored in shared climate goals and South-South solidarity, the India-Brazil biofuel partnership is fast becoming a blueprint for clean energy transition — one that promises rural rejuvenation, technological exchange, and a reimagined axis of green industrialisation
The current India-US trade relationship is facing renewed strain following the United States’ imposition of a 25 per cent blanket tariff on all Indian imports, effective, August 1, 2025. This move, driven by concerns over India’s high tariffs on agricultural and dairy products, its continued engagement with Russian oil and defense markets, has disrupted the momentum of bilateral trade negotiations aimed at expanding trade to USD 500 billion by 2030. As a result, talks have stalled and key Indian export sectors such as textiles, pharmaceuticals, auto components, and electronics face heightened vulnerability in the US market.
Amidst these tensions, India, the US, and Brazil continue to collaborate through the Global Biofuels Alliance (GBA), launched during India’s G20 presidency in 2023. The alliance is focused on advancing biofuel adoption, including ethanol blending, sustainable aviation fuels, and flex-fuel technologies. India’s ambitions to reach 20 per cent ethanol blending by 2025 align closely with Brazil’s mature biofuel ecosystem and the US’s technological leadership. While the tariff dispute underscores geopolitical and trade frictions, the trilateral cooperation on clean fuels remains a strategic area of convergence, offering a counterbalance to growing protectionist trends, reinforcing shared commitments to energy security and low-carbon growth.
The Global Biofuels Alliance aspires to ensure sustainable biofuel production across the Global South, but can it remain unaffected by the sudden shift in global trade dynamics?
Why biofuels?
Biofuel, as most would understand, is a fuel that is made from plant material or animal waste. On the strategic level for India, the GBA is an extension of the International Solar Alliance, where these two countries are jointly attempting to shape global energy norms from the perspective of developing countries. The initiators of the GBA see this as another strategic step in India’s international relations game plan of promoting the effort to establish energy norms globally from a developing nation’s perspective. For Brazil, it will be a chance to reassert its leadership position in the bioenergy market, more so when completing its outreach for diversification of diplomatic avenues into ties with Global South countries and beyond. It is most likely that the tango between India and Brazil plays out at many levels.
Biofuels are a critical element in the global strategy to fight climate change. They help lower GHG emissions, reduce dependence on fossil fuels, promote sustainable land use, support rural economies, and are necessary for achieving national and international climate goals, especially in hard-to-abate sectors of the economy. The India Brazil collaboration on biofuels is being intensified considering that this partnership, erstwhile on the periphery of biofuel diplomacy, is currently placed at the heart of larger geopolitical shift concerning energy security and climate protection, where a meeting of urban and rural people takes place. This changing focus has put biofuels at the centre of an energy renaissance in the rural world. The people in this narrative are doing a tango and getting down to brass tacks in biosphere unison.
Ethanol, a biofuel primarily derived from sugarcane, is Brazil’s remedy when its hydroelectric plants are under duress, and it is becoming the world’s largest large-scale sugarcane ethanol energy economy. Brazil grows sugarcane in its off-season, allowing both ethanol and sugar production to provide more than 30 per cent of the nation’s car fuel consumption through ethanol. Biofuels can boost rural incomes by creating demand for crops, generating jobs, and encouraging investment in agriculture. They support energy security and climate resilience. However, without safeguards, they may risk food security and environmental sustainability. Will any biofuel model in India based on ethanol mixed with petrol be distinguishable from Brazil?
High Ambition in Policy
Both the countries have high-blending mandates at the policy level. Brazil has had the Fuels of the Future law in force since October 2024, bringing a gradual increase in biodiesel blending, with blending rates increasing from 14 per cent at the start of 2025 to 20 per cent in 2030. At the same time, the Indian Government is furthering its ethanol-blending program with the imposition of a 10 per cent blending of ethanol in petrol as an interim target, whilst placing compressed biogas and sustainable aviation fuel as key pillars of its energy portfolio. These mandates have strong regulatory frameworks and financial incentives backing them, and they send a signal for medium — and long-term commitment to biofuels as important parts of the national energy policy.
Indian technologists are tapping Brazilian researchers and policymakers in sugarcane-based ethanol and second-generation biofuels to come and work in India and deepen this partnership. However, even as India uses feedstocks like rice straw, maize, and used cooking oil to amplify its biofuel output, the partnership strengthens Brazil’s soybean, oil, and sugarcane portfolio, creating enough diversification to withstand global supply shocks. Now, the two are looking at joint ventures in India and Brazil to build picobiorefinerías or bio-refineries, with Indian companies pumping money into Brazilian infrastructure deals and the other way around. Petrobras, Brazil’s mammoth state-owned energy company, has committed $600 million to biodiesel and biomethane projects in its 2025 derecho plan, while Indian companies like ONGC Videsh and Bharat Petroleum are getting into the business of upstream oil and bioenergy in Brazil.
The biofuel partnership between Brazil and India serves as a case study in South-South cooperation, showing how two developing countries can work together to solve mutual problems in a respectful and cooperative way. Both countries have a lot of experience dealing with the kinds of energy and rural development problems that many African countries face. They are using that experience to promote biofuels as part of a rural development and climate resilience toolkit for those countries. Brazil’s renewed engagement with African countries like Angola and Nigeria, coupled with India’s growing presence in East Africa, allows for a parallel in energy diplomacy that could benefit the trilateral cooperation of the two countries with African nations.
Political Complexities
The dance has its missteps, and the question of feedstock sustainability is no exception. Brazil’s dependence on soybean oil — over 70 per cent of biodiesel in commercial application in Brazil — has caused some raised eyebrows with regard to the Amazon and Cerrado. In the meantime, India is trying to juggle food security with expanding on biofuels as ethanol production from sugarcane and maize is ramped up. Politics about sourcing feedstock in amounts suitable for the kinds of biofuels meant to be of assistance are complex and likely only to heat up further. After all, trade is not just import and export; it is also a matter of conserving and expanding political power.
The world of biofuels knows no friction. It’s a mini-maelstrom of pricing shenanigans, currency swings, and regulatory inequities. The pricing scenario for biodiesel in Brazil, the second-largest producer of biodiesel in the world, has been nothing short of unprecedented. High prices of biodiesel were witnessed in late 2024, garnering a lot of attention as prices went up to about 30 per cent compared to the previous year because of Government mandates and the new crushing dynamics of the soybean industry in South America. In Brazil, biodiesel producers were paid R$6115/m3, whereas the biodiesel sector of India seemed to be frozen, not due to bad weather but due to traffic congestion caused by ethanol production and excessive vehicles on the road.
The evolving India-Brazil biofuels alliance is emerging as a compelling response to the rapidly shifting global energy and climate geopolitics. At a time when dominant economies like China are championing electric vehicles and synthetic fuels, and the United States is reshaping its clean energy architecture through the Inflation Reduction Act, Brazil and India represent a distinct alternative. Rooted in the principles of developmental equity and south-south cooperation, their collaboration articulates a vision of green industrialisation that is inclusive, pragmatic, and reflective of the needs of emerging economies.
What Next?
As the world’s energy landscape becomes increasingly fragmented and competitive, the India-Brazil partnership offers a narrative grounded in mutual resilience, technology exchange, and long-term sustainability. It moves beyond mere trade dynamics to define a new axis of energy diplomacy in the Global South. The forthcoming BRICS Summit in Brasilia presents an opportunity to strengthen this narrative, especially by positioning biofuels within broader discussions on climate finance, innovation, and south-led green transitions. A particularly promising area of collaboration is the aviation sector, which is under growing pressure to decarbonise. With no viable electrification or hydrogen-based alternatives currently feasible for large-scale aviation, Sustainable Aviation Fuel has emerged as a key enabler. Capable of reducing emissions by up to 80 per cent, SAF offers a practical decarbonisation pathway but global production remains limited. Here, Brazil’s advanced ethanol infrastructure and India’s expanding renewable energy base provide a synergistic foundation for joint SAF development, potentially establishing the Global South as a major contributor to aviation sustainability.
The India-Brazil biofuels alliance is thus more than a policy framework, it is a declaration of shared intent and strategic alignment. It signals the emergence of a bilateral compact that not only boosts trade and energy security but also contributes to shaping global norms on sustainable fuels.
As countries contemplate pathways to a low-carbon future, Brazil’s biofuel legislation serves as a pragmatic model an invitation to join a new era of biomass-based energy with clear rules and shared benefits. Moving forward, the alliance must focus on institutionalising its cooperation through joint research platforms, investment in SAF and ethanol infrastructure, and coordinated engagement in multilateral forums such as the Global Biofuels Alliance and BRICS. By leading with ambition and inclusivity, India and Brazil can redefine the contours of global biofuel leadership transforming their bilateral dance into a blueprint for the world.
(The writer is President, India Water Foundation)