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B3 opens its OTC platform for registration and trading of carbon credits in the fuel sector

Since the day 27 of April, the registration and trading system of Decarbonization Credits (CBio) can already be accessed by market agents on the platform operated by B3. Thereby, all steps have been completed to initiate the National Biofuels Policy (RenovaBio), which came into force on 24 december 2019 and will reduce the carbon intensity of the Brazilian transport matrix by increasing the share of renewable fuels and offsetting carbon dioxide emissions (CO2) generated by fossils with the commercialization of CBios (1 CBio is equivalent to one ton of CO2 that is no longer emitted into the atmosphere).

What is Renovabio?

The National Policy of Biofuels (RenovaBio) was instituted by law 13.576/2017 to enable that the country fulfills the commitments made in the Paris Agreement*. As part of this goal, RenovaBio instituted annual emission reduction targets greenhouse gases for fossil fuel distributors. O compliance with these targets is achieved through the acquisition of decarbonization credits (CBIOS **). Each CBIO represents a ton of CO2 avoided. Credits will be issued by biofuel producers and importers authorized by the Agency National Petroleum (ANP). For that, they must hire an inspection firm accredited by the ANP, who will provide the authorization, and later a bookkeeper (bank or financial institution), which will carry out the process of issue and will record the credit at B3.

*Paris Agreement and Brazil's goal: increase by 18% the participation of bioenergy in its energy matrix until 2030.

**CBIOS are bonds issued by producers and importers based on your biofuel purchase and sale invoices.

See how the CBio lifecycle will work

Outside the B3 environment

  • Biofuel Producer requests the ANP to authorization to issue the CBIO.
  • The ANP analyzes the guarantees and authorizes the issuance of the CBIO.
  • The Producer contacts the Bookkeeper* to request the issuance of the CBIO.
  • Issuance of CBIO in book-entry form and beginning of the B3 registration process.

Within the B3 Environment - Issue Registration and Trading

  • The Bookkeeper*, as Agent of Record, inputs the information into B3 and records the information relating to CBIO Issuance.
  • At B3, the identifier code for CBIO is system provided. CBIOs will be available for trading.
  • the bookkeeper, after the first deal, allocates the quantities for the buyer, indicating the sales PU of the CBIOs.
  • Customer Representative** buyer confirms the operation launched by the Bookkeeper.
  • DVP do CBIO: asset is changed position through payment confirmation.

Within the B3 Environment - CBIO Retiree

  • Customer Representative Posts Retirement CBIO on behalf of the client/investor.
  • At B3, the system identifies quantities in custody and requests double command of the Bookkeeper.
  • The Bookkeeper double-commands the operation to have control of the carrying amounts.
  • B3 Retires the CBIO removing the positions from the client.

*The Bookkeeper is responsible for the registration of the issue in the B3 environment and, also, by the registration of the CBIO trading in the primary market. The negotiation can be done through of the trader, platform widely used by the market for trading Public titles, debentures, CRI and CRA.

**Fuel distributors and investors will not directly access B3's systems. it will be done only through their representatives, which will include the offers on Trader and will confirm the change of ownership of the asset in the registration system. will fit, yet, to the customer's representatives to identify the beneficiaries of the CBIO in "Party Thank You" and "Party No Thank You", according to the definition of current regulation.

Want to know more?

The following legal documents can help you:

  • She 13.576/2017 – Provides for the National Biofuels Policy (RenovaBio).
  • Decree 9.888/2019 – Provides for the definition of mandatory targets for reducing greenhouse gas emissions and establishes the RenovaBio Committee.
  • Ordinance 419/2019 – Provides for bookkeeping, Registration, negotiation and retirement of decarbonization credits.

original content B3.com.br. For more information and questions about consulting services to adapt to the Renovabio Program and issue CBIOS, contact us.