Brazil to Launch Ambitious Biofuels Program
by Leticia Phillips (UNICA/Ethanol Producer Magazine) RenovaBio will help Brazil meet its commitment to reduce greenhouse gas emissions by 43 percent of 2005 levels by 2030. — Building, in part, on the successes and lessons learned from two signature American policies, Brazil is poised to launch a government program that will support the continued development and use of low-carbon, clean biofuels. This new initiative, dubbed RenovaBio, will play a key role in meeting Brazil’s ambitious commitments made at the Paris climate summit in December 2015.
Brazil pledged to reduce its greenhouse gas (GHG) emissions by 43 percent of 2005 levels by 2030. Achieving that goal will require biofuels to supply approximately 18 percent of the country’s energy mix by 2030 through greater sugar cane ethanol production, expanded second-generation biofuels and additional biodiesel for transportation.
Brazilian drivers today consume ethanol in two ways. First, all gasoline sold in Brazil is required to contain 27 percent ethanol. Second, most Brazilians drive flex-fuel vehicles allowing ethanol to compete directly with gasoline on price at the pump. But Brazilian consumers have enjoyed subsidized gasoline prices for many years, which weakens demand for ethanol. RenovaBio will alter this dynamic and encourage fuel distributors to boost sales of ethanol versus gasoline by requiring them to lend a hand meeting GHG reduction goals.
The Brazilian biofuel program is expected to incorporate two elements that will be familiar to American policymakers and industry representatives.
Similar to California’s Low Carbon Fuel Standard, RenovaBio will assign a carbon intensity rating to the specific biofuel produced at each mill. This system will reward producers who invest in manufacturing biofuels as cleanly and efficiently as possible.
Fuel distributors will then be encouraged to buy more of this clean biofuel through a credit trading program that works much like renewable identification numbers (RINs) under the federal Renewable Fuel Standard. With RenovaBio, distributors will be required to purchase Emissions Reductions Certificates (or CBIOs in Portuguese). Mills that produce fuels with low carbon intensity rankings will receive a larger allotment of CBIOs than mills producing fuels with higher carbon intensity.
Informed observers expect action soon—either by Brazil’s congress or an announcement by Brazilian President Michel Temer issuing what is essentially an executive order to implement the program—that will clarify many key details. What is clear already, however, is that RenovaBio will be another evolution in smart biofuels policy that deserves emulation by other countries. READ MORE