The Brazilian Program of Production and Use of Biodiesel, Family Farming and the interfaces with the 2030 Agenda Family Farming The biodiesel production, its connection with family farming through PNPB¹ and its positive role in advancingthe Sustainable Development Goals (SDGs) underthe 2030 Agenda. According to Law No 11,326/2006, a family farmer is defined as someone working in rural areas who meets the following requirements: •Owns an area up to four fiscal modules³; •Predominantly uses Family labor; •Derives a percentage of their income from the rural enterprise; •Runs the establishment with their family. FAO² estimates that there are 608 millionfarmsworldwide, more than 90% of which are classified as family farming. They occupy between70% and 80%of the world’s rural areasand are responsible for producing about 80%of the food yield. 84%of these farms are managed by smallholders (with less than two hectares). ²Food and Agriculture Organization of the United Nations. 4 According to the latest agricultural census, conducted by IBGE in 2017. Family farming constitutes the economic basis of 90% of Brazilian municipalities with up to 20,000 inhabitants (68.3% of all municipalities). Besides, family farming is the primary source of food production in Brazil. It accounts for 70%of the food consumed and engage 70%of all personnel in agricultural activities. In Brazil, there are around 5 millionagricultural establishments 4 , 77%of which are classified as family farming, accounting for 80.9 million hectares and representing 23%of the total area. Family farming represents an important link in social protection and cancontributeto combating hunger and food insecurity in Brazil. What is the PNPB? National Program for the Production and Use of Biodiesel Launchedby President Lula in 2004 Goals Introduce biodiesel into the energy matrix. Reduce dependence on fossil fuels.
Include family farmers in the production chain. Social Environmental Economic Regional development Employment and income generation Mitigation ofdieseloil imports Reduces greenhouse gases and harmful pollutants Increases renewability of the national energy matrix Biodiesel-producing companies Must make minimum expenditures in family farming, such as purchasing a minimum percentage ofRMs from families and/or intermediaries, establish advance contracts, and provide technical assistance to farmers. Raw material-producing families Must be enrolled in the National Program for Strengthening Family Farming (Pronaf) and registered in the Rural Environmental Registry (CAR). Specific family farming policies generally include three types of instruments: credit, technical assistance, and organizational support. The PNPBhas promoted the use of these instruments and has proven to be a successful policy, as evidenced by socioeconomic indicators. SBS Social Biofuel Seal Granted and monitored by the Ministry of Agrarian Development and Family Agriculture (MDA). Tax incentives for companies purchasing from family farming. The more diversified the raw materials (RMs) and the regions, the greater the tax benefit. Priority is given to RMs other than soy and corn and/or originating from the Northeast and Semi-Arid regions. Defines the rules governing the relationship between biodiesel-producing companies and raw material producers. Mechanism for including family farming in the PNPB The program is based on 3 pillars: ¹National Program for the Production and Use of Biodiesel ³The size of the fiscal modulevaries by municipality, depending on factors such as land use, income generated, and the degree of land utilization, among others. According to current regulations, 80% of the biodiesel used in the blend with diesel must come from companies holding the SBS certification. For more information on cooperative actions in 2025: click here.

20.6 95.6 118.1 0 20 40 60 80 100 120 140 200820102012201420162018202020222024 Thousand reais 0 10 20 30 40 50 60 70 80 90 100 0 20 40 60 80 100 120 200820102012201420162018202020222024 No. of cooperatives No. of families NorthNotheastCentral WestSoutheastSouthNo. of cooperatives Based on I-O 6 methodology: Biodiesel produced by family farming generates 5.4 times more jobs than fossil diesel. PNPB socioeconomic indicators The number of beneficiary families has fluctuated since the launch of the PNPB, reaching in 2024 almost twice the level recorded in 2008. Over the years, the South Region has gained prominence and currently accounts for approximately 90% of the families, with an agrarian settlement model based on small and medium-sized properties that favors land management by family farmers. The number of cooperatives has also fluctuated, showing significant growth in 2024, when it reached its peak. Recommendation to promote greater regional diversification* Brazil is the world’s largest soybean producer, with the highest global productivity and planted area. •The most widely grown crop in the country with a consistent supply •Consolidated and technologically mature production chain •Cultivated across all Brazilian regions •Supported by legal framework that monitors its expansion boundaries Although the initially proposed crop mix was diverse, the vertical integration of soybean cultivation increased its competitiveness compared to other crops, and this oilseed has taken on a prominent role. 5 Itisimportanttonotethatthisincomerefersonlytothat obtainedfromrawmaterialsforbiodieselproduction,and familiesmayhaveadditionalsourcesofincomefromother activities. The income earned by families participating in the program has grown significantly, indicating the success of this initiative. The decentralized generation of employment and income acts as a driver of related activities in the areas where these families live. Gross income 5 reached its peak in 2024. 6 Input-Output (I-O) Matrix: A methodology that summarizes all monetary interactions of a given country or region, highlighting the demand for technical inputs and the supply of products from all sectors of that country or region. 92 55,128 2.8 Million tons 6.5 R$ billions Cooperatives Families Commercialized volume Sales value Key Regulations Regional and Raw Material Diversification MME/MDAOrdinanceNo.02/2023 Incentive mechanisms and acquisitions from Family Farming for the PNPB in the North, Northeast, and Semi-Arid regions. *MDAOrdinanceNo.28/2024 CriteriaforgrantingandmaintainingtheSBS,fosteringgreater diversificationofrawmaterialsandpromotingnewmechanismsfor socialinclusion. SBSstatistics in family farming Family farmers and cooperatives Source: EPE based on MDA DecreeNo.11,902/2024 Itexpandedthepossibilitiesforacquiringproductsfromfamilyfarming,allowing companiestoaccountforpurchasesofitemsoutsidethedirectbiodieselsupply chain,especiallyintheNorth,Northeast,andSemi-Aridregions. MDAOrdinanceNo.36/2025 Familyfarmingpromotionprojectscarriedoutbybiodieselmanufacturers, asrequiredbytheSBS,nowrequirepriorevaluationbytheSecretariatof FamilyFarmingandAgroecology. Recommendation to increase raw material diversification Source: EPE based on MDA Annual gross income

ODS President Thiago Prado Director Heloisa Borges Bastos Esteves Technical Coordination Angela Oliveira da Costa Formoreinformation: BiofuelsCurrentOutlook Ten-YearEnergyExpansionPlan EPE assumes no responsibility for decisions or actions taken based on the information contained in this report, nor for any misuse of such information. Published in: November/2025 Technical Team Dan Abensur Gandelman Danielle Borher de Andrade Euler João Geraldo da Silva Juliana Rangel do Nascimento Leônidas BiallyO. dos Santos Marina Damião B. Ribeiro Paula I. da Costa Barbosa Rachel Martins Henriques Rafael Barros Araujo Final Remarks SDGs that reflect the interfaces between Family Farming, the PNPB, and the 2030 Agenda Family farmers make a significant contribution to Brazil’s food supply. Increasing food availability can help reduce food insecurity. Family farming supplies food products, while the PNPB supports small producers through infrastructure development and income generation. 4 SDGs Quality Education Familyfarmerscanpartnerwithprogramsthatprovide schoolmeals,thussupportingtheachievementofthe 2030AgendaSDGs. Promotesrenewableenergysources,suchasbiodiesel 8 SDGs Decent Work and Economic Growth Job creation and strengthening of the local economy. 13 SDGs Climate Action The adoption of renewable sources for biofuel production enhances the sustainability of the national energy matrix and helps reduce greenhouse gas emissions. The PNPB plays a central role in promoting family farming and in the socioeconomic integration of small producers into the biodiesel supply chain. It is considered a benchmark model for public policies aimed at productive inclusion of family farming, focused on a fair and inclusive energy transition. Its application to new biofuels and other sectors is recommended for evaluation. Technical assistance and rural extension activities contribute to farmers’ technical training and boost economic activity, creating jobs, increasing income, and improving quality of life. They also support biofuel production, enhancing the sustainability of the national energy matrix. These indicators are linked, in various ways, to several of the United Nations Sustainable Development Goals of the 2030 Agenda. Social Biofuel Seal is an unprecedented instrument in the international context, standing out for promoting effective integration between energy and food security through a more equitable distribution of the economic benefits generated by biodiesel production chain.

PNPB Family Farming 2030 Agenda + + Established by the United Nations General Assembly Defined and agreed upon at the UN Sustainable Development Summit in 2015. A framework of 17 global goals to be achieved by 2030 Sustainable Development Goals(SDG) 1 SDGs No Poverty 2 SDGs Zero Hunger 7 SDGs Affordable and Clean Energy 2030 Agenda ReplicatingthePNPBmodelfornew biofuelsisplantingtheseedsforafairer andmoresustainablefutureforall!