Brazil’s RenovaBio takes off
Brazilian program for the reduction of GHG emissions officially started December 24 e proposes a new market where biofuels are central.
By Gabriel Miranda, EcoEngineers
The following article was published on Ethanol Producer Magazine’s website on Jan. 14, 2019.
There was something new to celebrate in Brazil this holiday season. After several years of debate and public consultation, the Biofuels National Policy (RenovaBio) program finally became official on Dec. 24, 2019. The newborn program ratifies the Brazilian government’s commitment to the Paris Agreement from 2016. With good predictability, well-defined rules, and transparency, the program details a model for carbon emission reduction that improves the role of biofuels in Brazil’s energy matrix.
In a nutshell, RenovaBio creates a carbon credit market with defined goals for its execution. It considers the volume of fossil fuel transactions from each distributor. The fossil fuel distributor will be obligated to compensate for the carbon emissions of these fossil fuels through the acquisition of CBIOS (Decarbonization Certificates) in this newly created market.
With this program, Brazil expects to reduce 10.1% of the carbon intensity (CI) from the Brazilian fuel matrix (see Figure 1) by 2028.
Not only does this program boost the biofuel supply chain, but it also establishes mechanisms that encourage companies to abide by rules against deforestation caused by agricultural expansion. Using life-cycle analysis techniques very similar to those used by the California Low Carbon Fuel Standard (LCFS), the program adversely effects the CI calculation for biofuel producers that use feedstocks originating from deforested areas.
Moreover, the CI is a key element in the CBIOS generation. The lower the CI, the more carbon can be offset from the corresponding displaced fossil fuel, so consequently, more CBIOS are generated. Therefore, a more efficient producer could produce more CBIOS than another with less efficiency but greater volumetric production capacity.
This is also great news for U.S. corn ethanol producers. In the past few years, Brazilian imports of U.S. ethanol increased considerably (see Figure 2).
Growth or at least stabilization of these corn ethanol import levels should be expected for three main reasons. The first is a long history of stagnation in the sugar cane ethanol industry causing a reduction in installed capacity. Second, CBIOS targets will demand a biofuel volumetric capacity that internal production won’t be able to keep up with alone. In order to reach RenovaBio emission targets, a good deal of the distributor’s CBIOS target will rely upon CBIOS generated from corn ethanol importers. And lastly, ethanol imports’ deregulation and the favorable price of U.S. corn ethanol mean U.S. producers are expected to play a role in meeting RenovaBio’s CBIOS targets.
Similar to the LCFS Verification process, U.S. corn ethanol producers will need to provide data ranging from feedstock to production process in order to calculate their CI score. U.S. producers should be able to use already existing data for RenovaCalc, the RenovaBio calculator (currently provided in Portuguese), to relay information to their ethanol importers in Brazil.
EcoEngineers is positioned to become a valued partner for ethanol producers who want to participate in the Brazilian program. With experience in consulting, compliance management, and auditing for the U.S. Renewable Fuel Standard (RFS) program and the LCFS, EcoEngineers is prepared for producers in this recently created market. For this purpose, EcoEngineers provides consultants fluent in Portuguese to assist producers, exporters and importers of corn ethanol.
Gabriel Miranda is a Regulatory Consultant for EcoEngineers, specializing in carbon modeling and RenovaBio. Mr. Miranda holds a master’s degree in agricultural engineering from Purdue University and bachelor’s degree in industrial engineering from Universidade Federal do Rio Grande do Norte in Brazil. You can reach him at firstname.lastname@example.org or 515.985.1287.
For more information about general consulting services, contact Director of Engineering and Ethanol Line of Business Manager Jim Ramm, P.E. at email@example.com or 515.985.1266.
 Bloomberg. (2018, June 13). Brasil deve ser importador líquido de etanol pelo segundo ano seguido. Retrieved December 27, 2019, from https://www.novacana.com/n/etanol/mercado/importacao/brasil-importador-liquido-etanol-segundo-ano-seguido-130618.
 Cresce disputa na importação de etanol. (2019, September 4). Retrieved December 27, 2019, from https://www.udop.com.br/index.php?item=noticias&cod=1182092.