Brazil’s RenovaBio programme clears first hurdle as Congress approves

Brazil’s Congress has cleared its RenovaBio biofuel programme in the first step towards bolstering the country’s biofuel credentials.

Already a powerhouse in the production, adoption and retail of ethanol, Brazil is looking to burnish its credentials in the biofuel space via the programme, which is steered by the Ministry of Mines and Energy.

At its heart, the programme sets out to establish national emission reduction targets over 10 years, introducing individual targets for fuel distributors which will be directly tied to their exposure to the fossil fuel element of the fuel mix.

Alongside that, and much like the US Renewable Identification Numbers (RINS), the RenovaBio programme proposes to include a certification scheme that issues Biocarbon Decarbonation Credits (CBIO) to biofuel producers, which can then be traded as a financial instrument.

While Brazil has a relatively sophisticated retail network and well established biofuel credentials, demand for the primary biofuel – ethanol largely produced from sugar cane – is broadly dependent on the relative competitiveness of petrol at the pump.

Brazilian petrol is mandated to contain 27% anhydrous ethanol, but it competes at the pump with pure hydrous ethanol with most of Brazil’s car fleet comprising of ‘flex fuel’ vehicles – cars that are capable of driving on 100% ethanol.

If the program follows a similar path to other such schemes when determining the greenhouse gas savings of biofuels, it could have an impact for the flows of ethanol between the US and Brazil.

Ethanol produced from sugarcane has been prized for lower greenhouse gas emissions than ethanol produced from corn, a situation that is enshrined in the California-focused Low Carbon Fuel Standard.   

Should RenovaBio adopt a similar stance, the movement of cane-based Brazilian ethanol to California may be favoured over the corn-based flows from the US into North Northeast Brazil.

The bill now has to navigate the Senate, the next chamber of the Brazilian government.