The BNDES (Brazilian Development Bank) has notified FS Indústria de Biocombustíveis, one of Brazil’s leading corn-ethanol producers, after Repórter Brasil informed the bank that a partner and supplier of the company had been fined by Ibama (Brazilian Institute of Environment and Renewable Natural Resources) for illegal planting on 5,300 hectares inside the Batelão Indigenous Land, located in Tabaporã, Mato Grosso, one of the country’s main grain-producing states.

Between 2023 and 2025, FS received at least R$ 600 million (USD 112,3 million) in BNDES financing to invest in its biofuel production. The largest loan—R$ 500 million (USD 94,3 million)—came from the National Climate Change Fund, known as the Climate Fund.

Miguel Vaz Ribeiro was fined R$ 2.9 million (USD 547,169) by Ibama in April this year for planting genetically modified corn and cotton on Fazenda São Jorge, which overlaps the Indigenous territory. Ribeiro is a partner at FS Indústria de Biocombustíveis and is listed as a supplier of corn to the company, according to supply contracts accessed by Repórter Brasil. The producer is also the mayor of Lucas do Rio Verde city, in Mato Grosso.

Brazilian law prohibits the cultivation of genetically modified organisms on Indigenous lands and in conservation units. Ibama also classified the violation as biopiracy—the illegal exploitation of biological resources and traditional knowledge—and ordered the destruction of the crops.

FS received R$ 500 million from BNDES for corn-ethanol investments

In September 2024, BNDES announced a R$ 500 million loan for FS to build a new corn-ethanol plant in Querência, Mato Grosso, with a capacity of up to 400,000 tons. The funding was provided through the Climate Fund. Linked to the Ministry of Environment and Climate Change (MMA), the fund was created to support projects that reduce the effects of climate change and is described by the ministry as “the main financial instrument for Brazil’s ecological transition.”

During COP30, the MMA and BNDES announced the raising of R$ 8.84 billion (USD 1,6 billion) for the Climate Fund through letters of intent signed with the Inter-American Development Bank (IDB) and three European financial institutions.

In March 2023, FS had already received R$ 100 million (USD 18,8 million), this time through RenovaBio, a program under the Ministry of Mines and Energy (MME). The resources were intended to improve the company’s energy-environmental efficiency, according to BNDES.

Asked about Ibama’s fine against one of FS’s partners and suppliers, BNDES stated that it had “formally notified the company and awaits clarification of the facts described in order to define its actions regarding the contracts.” The bank explained that all financing projects undergo social and environmental risk assessments and that FS “went through a thorough registration review” in which “no final judgments related to environmental and/or labor violations were found that would prevent the granting of financing.” The bank added that, if irregularities are identified in ongoing financing contracts, it may suspend disbursements and, “in more serious situations,” demand early repayment. Read here the bank full responses.

The MMA reiterated the response sent by BNDES, sharing the same statement.

The MME, responsible for RenovaBio, was contacted but had not responded by publication time. FS also did not respond to Repórter Brasil’s questions. The space remains open for future comments.

Funai says property title is void

In addition to Miguel Vaz Ribeiro, Fazenda São Jorge is registered under the name of Marino José Franz and Dankang Fiagril Administração de Bens, a company whose board of directors includes Franz. Both Franz and Dankang Fiagril are listed as partners of Fiagril, an agricultural inputs and grains producer based in Mato Grosso.

Franz is also a partner at FS Indústria de Biocombustíveis and has a history of supplying the biofuels producer, according to documents obtained by the investigation.

Ribeiro, Franz, and Dankang Fiagril jointly contest the Ibama fine in court. In May this year, they secured a court ruling suspending the destruction of the crops until a later judicial decision on the penalty.

The Batelão Indigenous Land, traditionally occupied by the Kayabi people, had its declaratory ordinance published in 2007. Since then, farmers—including Ribeiro and Franz—have claimed ownership of areas in ongoing court cases. In 2008, the Ministry of Justice suspended the previous year’s ordinance following a determination by the Superior Court of Justice. In 2016, the Federal Court confirmed that the territory is of traditional Indigenous occupation. It is currently listed by Funai (National Indigenous People Foundation) as “declared,” with physical demarcation and homologation still pending.

In September 2025, a ruling by the Federal Regional Court of the 1st Region (TRF1) ordered Funai to remove restrictive information regarding the use of farms within the territory until the Indigenous land was fully homologated.

When questioned, Ribeiro and Franz responded through their attorney that Ibama had stated there was an overlap between Fazenda São Jorge and a “still non-existent Indigenous land.” They referenced the TRF1 ruling and argued that restrictions on properties overlapping Indigenous territories “can only take effect after eventual homologation of the Batelão Indigenous Land.”

According to the farmers, “the party acting illegally is Funai, which shares false information with public agencies about Indigenous land overlapping private properties whose demarcation procedures have not been concluded.” They also claimed “there is no irregular planting by Miguel, Marino or Dankang Fiagril,” since “there is no demarcated Indigenous land overlapping the property.”

Miguel Ribeiro and Marino Franz—who has also served as mayor and deputy mayor of Lucas do Rio Verde—said FS is aware of the fine and that the company “continues to follow current environmental standards and procedures,” since the Indigenous land is not yet homologated and the planting “is regular and authorized” by the state environmental agency. Their full statement can be read here.

In a statement to the investigation, Funai reiterated that the Batelão Indigenous Land is properly delimited, that the courts have recognized the traditional occupation, and that the titles of properties overlapping the area—“such as the rural properties known as ‘Fazenda São Jorge’”—are null. The agency also said that since October it has been working to overturn the injunction ordering the removal of information on Fazenda São Jorge from its records, “given the unequivocal cartographic evidence of the overlap.” Read Funai’s full statement here. 

Dankang Fiagril Administração de Bens and Fiagril did not comment by publication time. The space remains open for future responses.

Contracts with FS

Miguel Vaz Ribeiro and Marino José Franz supplied corn to FS under contracts in force between 2022 and 2024, according to capital-market documents accessed by Repórter Brasil.

Ribeiro’s corn supply contract with FS, in effect from August to December 2023, totaled R$ 12,700 (USD 2,400).

Franz’s corn contract with FS totaled R$ 1.3 million (USD 245,283), from June 2022 to April 2024. He also signed a R$ 2.2 million (USD 413,000) contract with FS for the supply—between September 2023 and July 2024—of DDG (Dried Distillers Grains), a corn by-product used for animal feed and one of the company’s main outputs.

After publication of the investigation, Franz and Ribeiro’s defense stated that the pair sells approximately 2% of the corn purchased by FS and that the contracts “comply with FS’s sustainability and compliance policies.” They also said Fazenda São Jorge has no active contracts and is not an FS supplier.

Sustainability discourse

At COP30, Brazil played a leading role in biofuels discussions. Government representatives, companies, and NGOs promoted the “Belém 4X” commitment, aimed at quadrupling the use of sustainable fuels by 2035.

The report “The Biofuels Bill”, released by Repórter Brasil in October 2025, revealed that the production chains of ethanol, biodiesel, and SAF (Sustainable Aviation Fuel) are linked to deforestation, land conflicts, and slave labor.

With production units in Mato Grosso, FS presents itself as “Brazil’s first ethanol producer 100% from corn” and claims to be contributing “to the global effort against climate change” through sustainable production. At least four FS representatives were accredited to participate in COP30—three of them invited by the Brazilian government.

The company publicly promotes socio-environmental policies, including requirements for supplier compliance, such as “not carrying out agricultural or commercial activities in territories overlapping Indigenous Lands.”

Biopiracy on Indigenous land

Law 11.460/2007, cited by Ibama in the violation, prohibits “the research and cultivation of genetically modified organisms on Indigenous lands and in conservation units.”

In Ribeiro’s infraction notice, Ibama states that “the use of genetically modified crops puts local varieties—such as traditional landraces, developed over centuries by traditional farmers and Indigenous peoples—at risk.” It adds: “In addition, there is the possibility of harmful effects on the health of traditional communities and Indigenous peoples due to the increasingly potent pesticides and herbicides used.”

“When you bring these foods into the villages, you also bring agrochemicals,” says Alberto Terena, one of the executive coordinators of Apib (Articulation of Indigenous Peoples of Brazil). “It is a change in these people’s way of life, and it impacts their health.”

Legal battle

Most of the original inhabitants of the Batelão Indigenous Land were expelled and relocated to the Xingu Indigenous Park in the 1960s, two decades after colonization of the region began, according to data compiled by the NGO Instituto Socioambiental.

As the demarcation process drags on in court, the area faces conflicts and is a site of logging, deforestation, and agribusiness activity, according to a study published by the organizations Opan (Operação Amazônia Nativa) and ICV (Instituto Centro de Vida).

The study mapped rural-property claims over approximately 88,000 hectares overlapping the Batelão Indigenous Land—just over 75% of its total area.

“The legal tools used by invaders to delay judicial decisions are a strategy that, unfortunately, succeeds. While the legal matter remains unresolved, invaders are degrading the Kayabi people’s heritage,” analyzes Ricardo da Costa Carvalho, an indigenist with Opan.