FS Biofuels found to have sourced GM corn illegally grown on indigenous land

In Brazil, BNDES (National Bank for Economic and Social Development) notified FS Biofuels, one of the main producers of corn ethanol in the country, after being informed by Reporter Brasil that a partner and supplier of the company was authorized by Ibama due to irregular planting in 5,300 hectares in the Batelão Indigenous Land, in Tabaporã, Mato Grosso.

Between 2023 and 2025, FS received at least R$ 600 million in financing from BNDES to invest in its biofuel production. The largest of them, worth R$ 500 million, was obtained through the National Fund on Climate Change, the so-called Climate Fund.

Miguel Vaz Ribeiro, who is mayor of Lucas do Rio Verde (MT), was fined by Ibama at R$2.9 million in April this year for the planting of genetically modified corn and cotton in Fazenda São Jorge, superimposed on the indigenous territory. Ribeiro is a partner of FS Indústria de Biocombustíveis and is a supplier of the grain to the company, according to supply contract data accessed by Reporter Brasil.

Brazilian legislation prohibits the cultivation of genetically modified organisms on indigenous lands and conservation units. The environmental agency also classified the infringement as biopiracy – illegal exploitation of biological resources and traditional knowledge – and determined the destruction of crops.

In September 2024, BNDES announced the financing of R$ 500 million for FS to build a new corn ethanol plant in Querência (MT), with a capacity of up to 400 thousand tons. The transfer of the amount was made through the Climate Fund.

Linked to the MMA (Ministry of the Environment and Climate Change), the fund was created to support ventures that promote the reduction of the effects of climate change and is labeled by the portfolio as “the main financial instrument for the ecological transition in Brazil”. During COP30, MMA and BNDES announced the raising of R$ 8.84 billion for the Climate Fund through the signing of letters of intent with the IDB (Inter-American Development Bank) and three European financial institutions.

By March 2023, the FS had already been awarded R$ 100 million. At the time, the funding took place through RenovaBio, a program linked to the MME (Ministry of Mines and Energy). The resource was intended for the expansion of the energy-environmental efficiency of the company, as announced by BNDES itself.

Asked about Ibama’s action against one of the partners and suppliers of the FS, BNDES reported that it “formally notified the company and awaits clarification of the facts narrated to define its actions in relation to the contracts concluded.” The bank said that all financing projects are submitted to the assessment of social and environmental risks and that the FS “went through a thorough cadastral analysis” and that “no lawsuits were found carried out in judgment arising from environmental and/or labor infractions that prevented the granting of financing to this company by the Bank.” Finally, the municipality highlighted that, if irregularities are identified in the ongoing financing, it can suspend the release of resources and, “in situations of greater severity”, carry out the early expiration of the contract.