Advantages of Joining the RenovaBio Program for Companies: The Value of CBIOs
The RenovaBio Program, established by Law no. 13.576/2017, has stood out as an important initiative by the Brazilian government to stimulate the production and use of biofuels, in addition to promoting the reduction of greenhouse gas emissions. Companies joining this program offer a series of advantages, with emphasis on the value of Decarbonization Credits (CBOs) marketed. This article will explore the specific benefits that companies can gain by joining RenovaBio, with a special focus on the value of CBIOs.
The RenovaBio Program: Brief Overview
RenovaBio's main objective is to recognize the strategic role of biofuels in the Brazilian energy matrix, promote energy efficiency and reduce greenhouse gas emissions. It sets annual decarbonization targets for fuel distributors, which are converted into Decarbonization Credits, the famous CBIOs, by biofuel producers.
A peculiarity of buying and selling CBIOS is the difference between the voluntary market and the regulated market.
– No regulated market, governments set mandatory emissions reduction targets for specific sectors of the economy. This is done through a scheme known as “cap and trade”, where a maximum emissions limit is established for regulated entities. Emissions permits compatible with this limit are created, that can be purchased, sold or distributed free of charge. The prices of these permits are determined by the market.
– In the voluntary market, companies and individuals compensate their CO2 emissions voluntarily, often due to pressure from consumers and investors. In this market, transactions are bilateral and are not subject to specific regulation. despite that, there are certifiers and best practices to guarantee the integrity of carbon credits.
In both markets, the purchase and sale of carbon credits may vary in terms of prices, quality and types of projects that generate credits. In the voluntary market, Prices can vary significantly due to the location of projects, credit offer, perception of carbon integrity and purchase volume. Furthermore, projects that sequester carbon and have “co-benefits” such as biodiversity protection or economic development of nearby communities may have different values. Already in the regulated market, emission permit prices are determined by the market itself, according to supply and demand.
These differences between regulated and voluntary markets reflect the diversity of approaches to addressing carbon emissions and mitigating climate change., offering options for different types of actors and contexts.
Advantages of Joining RenovaBio for Companies
1. Valuing Sustainable Production
When joining RenovaBio, companies that produce biofuels now have their production valued in the market, since the generation of CBIOs is directly related to the reduction of carbon emissions. This contributes to enhancing the company's image as a promoter of sustainable practices.
2. Revenue Generation from the Commercialization of CBIOs
The generation of CBIOs can represent an important source of revenue for companies, since these credits can be sold on the financial market. The sale of CBIOs can provide a new source of income and contribute to the profitability of companies in the biofuels sector.
In the year of 2023 a CNPE (National Energy Policy Council) designed for 2024 meta de 38,78 millions of CBIOS, and in November the credit was sold on average for R$ 118,04, with an annual increase of 16,3%.
3. Meeting Decarbonization Targets
Joining RenovaBio allows companies to meet their decarbonization goals more efficiently, since the generation and commercialization of CBIOs directly contribute to meeting these goals. This can avoid possible penalties and fines, in addition to reinforcing the company's commitment to reducing greenhouse gas emissions.
4. Stimulating Innovation and Energy Efficiency
RenovaBio encourages companies to invest in innovation and energy efficiency, as the search for more sustainable and less emissive production processes becomes not only a necessity, but also an opportunity to obtain more CBIOs and, consequently, greater profitability.
5. Strengthening Position in the International Market
Joining RenovaBio and actively participating in reducing carbon emissions can strengthen the position of Brazilian companies in the international market, especially in a global context of greater attention to environmental and sustainability issues.
Joining the RenovaBio Program offers several advantages for companies, with emphasis on the value of CBIOs. In addition to contributing to the reduction of greenhouse gas emissions, companies can benefit financially and strengthen their image as sustainability agents. Therefore, joining RenovaBio represents a strategic opportunity for companies in the biofuels sector in Brazil.