By Brazil Stock Guide – Rumo (RAIL3) secured R$ 350 million ($70 million) in financing from Brazil’s development bank BNDES to acquire six hybrid locomotives and at least 160 tank wagons. The funding, approved on Jan. 19, will expand rail transport of biofuels, led by corn ethanol, in Brazil’s Center-West, boosting capacity and cutting carbon emissions.
The project will add 928,000 cubic meters (245 million gallons) of annual transport capacity, a 32% increase from the volume of biofuels carried in 2024. The locomotives combine internal combustion engines with electric traction systems, allowing trains to operate at optimal efficiency while reducing fuel peaks and recovering energy through regenerative braking, according to the lender.
Hybrid traction represents the most viable decarbonization option for rail in the short and medium term due to lower implementation costs and limited reliance on complex civil works said Aloizio Mercadante, president of BNDES.
The project estimates a reduction of 62,300 metric tons of CO₂ per year from the combined effect of hybrid technology and the modal shift from trucks to rail. Road transport emits about eight times more CO₂ per ton-kilometer than rail, based on BNDES calculations.
The Climate Fund, created in 2009 and managed by BNDES under Brazil’s Environment and Climate Change Ministry, finances projects and equipment aimed at mitigating climate change. Rumo is Brazil’s largest private freight rail operator, running more than 13,000 kilometers (8,080 miles) of track with a fleet of about 1,200 locomotives and 33,000 wagons, positioning rail as a central pillar in the country’s transport decarbonization agenda.
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