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Brazil’s biofuel program sputters on weak emissions accounting

  • The RenovaBio program has been encouraging biofuel producers in Brazil to emit less carbon dioxide since the end of 2019.
  • The program survived a rocky first year brought on by the COVID-19 pandemic and volatility in the carbon credit market, but still has some weaknesses that must be addressed, experts say.
  • For one thing, the program doesn’t account for emissions from land use and indirect deforestation, which are significant factors in the production of soybeans, from which 70% of Brazil’s biodiesel is derived.
  • While Brazil is investing heavily in biofuels as an energy solution, a new report by the International Energy Agency suggests that by 2050, half of emission cuts should come from experimental technologies like advanced batteries for electric vehicles and hydrogen production systems.

Since it launched in December 2019, the RenovaBio program from Brazil’s energy ministry has been betting on increased use of biofuels to reduce greenhouse gas emissions. In addition to establishing decarbonization targets for fossil fuel distributors, the program offers incentives for biofuel producers to improve the conditions and efficiency of their production chains.

To be able to take part in the program, producers of ethanol, biodiesel, biokerosene or biogas are evaluated according to the carbon absorption and emission levels in their various production stages. “The plant producing ethanol in the most efficient manner, for example, will have lower carbon content,” says Ricardo Fujii, an energy specialist at WWF. This will make it eligible to issue more decarbonization credits, known in Brazil as CBIOs, on the carbon market. “This is incentive for the plant to produce with the lowest possible level of carbon emissions,” Fujii adds.

Each CBIO under the RenovaBio program is equivalent to 1 metric ton of avoided emissions. Distributors can purchase CBIOs on the stock market to meet their decarbonization targets.

Launched just months before the onset of the COVID-19 pandemic, RenovaBio survived a rocky first year that say demand fall for fuels in general, forcing distributors to revise their targets. Another challenge was the unstipulated value of a CBIO, which depends on stock market activity. Prices were low at first, but as the market began to consolidate, they neared those on the international carbon market.

As the program nears its second anniversary, experts are pointing to more serious faults that need attention.

Blind spot on indirect deforestation and soil use

While globally the energy sector is the top GHG emitter, especially from power generation and transportation, in Brazil the main sources of GHGs are associated with changes in land use, especially deforestation and cattle ranching. “RenovaBio doesn’t take soil use into consideration and doesn’t see indirect deforestation, both of which generate emissions,” Fujii said.

A clear example of this oversight is the case of a decree that had prohibited the cultivation of sugarcane inside the Amazon rainforest and Pantanal wetlands. In November 2019, the government revoked the decree, justifying the move on reducing bureaucracy and stimulating investment in the sugarcane biomass energy sector. The move was also cheered on by groups like the Brazilian Sugarcane Industry Association (UNICA), which touts zero-deforestation ambitions, but has ignored the lack of checks within the RenovaBio program that would prevent the spread of monoculture farming to these important biomes.

“In order to be eligible for RenovaBio, you have to work according to the law,” Fujii said. “But, if in a certain respect you ease up on legislation, it’s easier to make RenovaBio fit situations that are inadequate. This is a weakness of the program.”

Soybeans being loaded into the hold of a ship at the port of Paranaguá in Paraná state. Image by Ivan Bueno/AG. Paraná.

Indirect effects are more difficult to measure, which is the case with indirect deforestation. Brazil’s sugarcane industry, the world’s biggest, has undergone a crisis over the past decade, causing mills to close and meaning there’s currently less pressure to expand plantation area. It’s a different story with soybeans, however, which account for 70% of Brazil’s biodiesel composition. For example, when old cattle pasture that has already been deforested is bought up for planting soybean, there is no way to guarantee that new pasture will not be created in another region to replace it. This displacement generates indirect carbon emissions.

The biodiesel industry grew in recent years because of imposed regulations on higher levels in diesel composition. High demand for soybean exports has also raised pressure for more land, especially in the Amazon and Cerrado grasslands. Difficulty in tracking the product is another point of concern.

“In order to generate the CBIO, I have to identify the origin of the soybean and this is complicated by the fact that the soybean trade has many intermediaries,” said Carmen Araujo, director of the International Council on Clean Transportation (ICCT) in Brazil. “The product is stored, and those who buy it for processing get soybean that has been gathered from a number of sources. So you lose traceability. This is an important point for improving the mechanism.”

An ICCT study shows that RenovaBio’s strategies for guaranteeing sustainability are insufficient to withstand the indirect pressures that demand for biofuels can generate. “If we don’t look at the effect that an expanding soybean industry could have on deforestation — which generates 44% of Brazil’s CO2 emissions — I think we will be ignoring a very serious problem,” Araujo said.

The study recommends that the required mix of biofuel in biodiesel not exceed 10%, known as a B10 blend, so as to avoid pressure for new agricultural land and compatibility problems the fuel may have with vehicles, which could experience damage and increased maintenance costs.

Technologies of the future

A new report from the International Energy Agency (IEA) says that to be able to eliminate GHG emissions by 2050, the use of fossil fuels should be cut back from the current four-fifths of the global energy mix that it composes today, to one-fifth by the year 2050.

Brazil’s commitment under the Paris Agreement — confirmed this past April by President Jair Bolsonaro at the Leaders Climate Summit convened online by U.S. President Joe Biden — is to reduce GHG emissions by 43% by 2030, from 2005 levels. However, Brazil’s national power plan for the next decade continues to rely heavily on fossil fuels.

According to the IEA report, nearly half the cuts in emissions should come from technologies as yet unimplemented or still in the experimental stage, such as advanced batteries for electric vehicles and hydrogen producing systems.

“The biofuel industry has positioned itself as Brazil’s big solution, but we have to remember that Brazil is not an island,” said Marcel Martin, transportation coordinator at the Instituto Clima e Sociedade (Climate and Society Institute, or ICS). “Brazil lies within a global market, and if we don’t modernize, we will fall even farther behind than we already are.”

Martin said it’s important to evaluate the best way to use biofuels — for cargo vehicles, boats and planes — as well as to make advances in research into fuel cells and other alternative technologies. He also pointed to the evolution of second- and third-generation biofuels — those that don’t rely on growing a crop for the sole use of turning it into energy — and investments in electric and hydrogen platforms.

“The world is going electric. Germany, France, the U.K., the U.S. — they are all heading in that direction,” Martin said. “If we don’t dig in and fight to establish local production, Brazil won’t be able to keep up on the global market.”

Banner image of sugarcane fields in western Bahia State. Image by Nilson Negro.

This story was reported by Mongabay’s Brazil team and first published here on our Brazil site on Aug. 4, 2021.