RenovaBio, a Brazilian program to stimulate the production of biofuels, completed a year of operation in April and is already emerging as one of the most promising environmental policies in the country, with the potential to increase fuel alcohol production in Brazil by 50% and still generate 100% of all domestic electricity consumed in the national market from sugarcane biomass. This success case will be presented at the Biofuture Summit II / BBEST2020-21 conference, which will take place virtually from May 24 to 26.
The two conferences take place together, in a single integrated event, involving government representatives, entrepreneurs and researchers from more than 30 countries, in addition to international organizations, such as the IEA itself, and the International Renewable Energy Agency – IRENA. The conference, which takes place at a strategic moment and sets world trends in the field of energy transition to low carbon, is organized by the Brazilian government, through the Ministry of Foreign Affairs, and by the São Paulo State Research Support Foundation´s (FAPESP) Bioenergy Research Program, with support from APEX-Brasil agency.
“Since Proálcool (Brazilian National Alcohol Program), created in 1975, we have not had a program that would encourage the change in the energy matrix used in mobility in the country so intensely and consistently,” says Luiz Augusto Horta Nogueira, professor of Energy Systems at Federal University of Itajubá (Unifei) and associate researcher at the Interdisciplinary Nucleus of Energy Planning (NIPE) at Unicamp. “But”, he stresses, “with an important differential: RenovaBio does not imply tax waiver and is based on the rules of the market.”
For Nogueira, with RenovaBio, the country can achieve, within ten years, carbon neutrality in the energy production sector, after having already achieved the energy transition in the area of mobility due to the large-scale adoption of ethanol. “We will also be carbon neutral in terms of energy generation”, he celebrates. The professor draws attention to the fact that the country has registered growth in the production of renewable energy in several matrices. “And, with RenovaBio, we have an incentive for the production of biofuels and the generation of electric energy from biomass”, he adds.
His optimism is shared by Glaucia Mendes Souza, professor at the Department of Biochemistry at the University of São Paulo (USP) and coordinator of the Bioenergy Program (Bioen) at the São Paulo Research Foundation (Fapesp). “We have projections that indicate that, very soon, with the encouragement of Renovabio’s policies, we will be able to have almost the total residential consumption of electricity based on sugarcane biomass,” he says.
The coordinator of Bioen explains that, today, the generation of electric energy from sugarcane biomass corresponds to just over 25% of the total residential consumption in the country. With RenovaBio, this production of energy based on the burning of sugarcane bagasse, as well as the production of ethanol, generates decarbonization credits for the plants, which are sold on B3 (local stock exchange – former Bovespa). “It is an important stimulus so that, in addition to bagasse, straw is also burned. If the plants start burning half of the straw that is left in the field today or used for other purposes, the renewable electric energy produced will be enough to meet 100% of residential consumption in Brazil”, he predicts.
The RenovaBio biofuel production incentive program was created in 2017 (federal law 13,576), but it only started operating in April 2020, when decarbonization credits – also called CBios – began to be marketed on B3. RenovaBio was conceived with the objective of contributing for Brazil to reach its targets for reducing greenhouse gas emissions, set out in the Paris Agreement, a global treaty discussed by more than 190 countries during the 21st United Nations Conference on Climate Change (COP21), which took place in 2015.
Decarbonisation credits (Cbios)
The program provides that biofuel-producing plants can issue CBios after undergoing an auditable certification process, carried out by independent certifying companies. Both the certifying companies and the ethanol, biodiesel and biokerosene plants must meet the requirements set out in law and in the regulations of the National Petroleum Agency (ANP).
Each CBio corresponds to a ton of CO2 (one of the greenhouse gases). Fossil fuel distribution companies are committed to buying them as a way to mitigate their CO2 emissions. The acquisition is also free for other companies interested in reducing their “carbon footprints”.
The counterpart of the biofuel plants was the commitment to emit CBios equivalent to 14 million tons of CO2 in 2020. For 2021, the target is 24 billion CBios. The values will be increasing year by year until the level of 90 million tons is reached in 2030. There are commitments both on the part of the plants, in the increase of the production of biofuels and in the emission of CBios, and by the distributors of fossil fuels in the purchase of these securities. As a result, the system generates predictability in the annual biofuel offer and should have a positive impact on biofuel prices for the end consumer.
Plinio Nastari – president and CEO of Datagro, a consultancy specialized in agricultural markets with clients in 41 countries and a representative of civil society in the National Energy Policy Council between 2016 and 2020 -, is another defender of RenovaBio. “It is a well-drafted legislation, which respects market rules, generates taxes, induces increased productivity and brings goals negotiated between the parties”, he evaluates. These characteristics tend to stimulate increased efficiency and generate predictability for the biofuels sector, with internationally recognized CO2 emissions metrics and certifications issued by independent companies.
“Everything was negotiated and discussed openly in the House of Representatives and in the Senate. We are talking about a law that rewards the competence and individual efficiency of each energy plant”, he points out. According to Nastari, the higher the productivity of sugarcane per hectare and the more efficiently the company produces biofuel and energy, the better it treats waste, the more it can earn in the carbon market. “We are talking about encouraging meritocracy, competence, the development of new technologies for agricultural production, biofuels and environmental preservation”.