RenovaBio and Cbios, carbon credits, have significant potential to drive the transition to a low-carbon economy and contribute to reducing greenhouse gas emissions. The program has already shown positive results since its implementation, encouraging the production of advanced biofuels and the adoption of sustainable practices in the transport sector.
Nonetheless, There is still much to be done to unlock the full potential of carbon credits. It is necessary to continue investing in research and development of more efficient and sustainable technologies, to further reduce CO2 emissions. Furthermore, It is essential to strengthen regulation and supervision of the carbon credits market, ensuring its integrity and transparency.
PL 412/22
Brazil is taking its first steps towards, effectively, create measurement instruments, regulation and supervision in the creation of this PL.
The Bill establishes the Brazilian Greenhouse Gas Emissions Trading System (SBCE) and introduces changes to specific laws. The SBCE is a regulated environment subject to the regime for limiting greenhouse gas emissions and trading assets representing emissions., reduction or removal of greenhouse gases in Brazil.
The principles and characteristics of the SBCE include harmonization, compatibility with international agreements, participation and cooperation between different entities, transparency, economic competitiveness, reducing emissions in a cost-effective way, and respect for the rights of indigenous peoples and traditional communities.
The SBCE covers the promotion of reducing greenhouse gas mitigation costs, the establishment of transparent criteria for defining activities that emit greenhouse gases, and the gradual implementation of the system.
Furthermore, the project details the governance, Skills, assets that are part of the SBCE, taxation, national allocation plan, SBCE central registry, accreditation and de-accreditation of methodologies, penalties, oversight, and voluntary offer of carbon credits. The text also addresses the need to submit a monitoring plan, reporting greenhouse gas emissions and removals, and periodic reconciliation of obligations by operators subject to the SBCE.
The document establishes the infractions and penalties to be applied, as well as the corrective measures to be adopted. Furthermore, defines the voluntary offer of carbon credits by any natural or legal person, from projects or programs that involve the reduction or removal of greenhouse gases.
Carbon credits will only be considered Verified Emission Reduction or Removal Certificates included in the SBCE if they meet specific criteria, as origin from accredited methodologies and registration in the SBCE Central Registry.
The main controversy surrounding this PL is the exclusion of plantations and livestock – primary agricultural production – exempt from emissions limits. Nonetheless, This market is considered difficult to measure, since the methodologies to do so are still few and recent. No regulated market in the world includes agriculture.
Growing purchase of carbon credits
With growing awareness of the importance of sustainability and the pressure to reduce CO2 emissions, it is likely that demand for carbon credits will continue to increase in the coming years. This creates opportunities for companies that can reduce their emissions and generate surplus credits, that can be sold at a fair price.
https://conteudos.xpi.com.br/esg/credito-de-carbono-capturando-parte-da-solucao/
Economic value 12/08/21 “Bets on carbon credits boost the market”
Mega manager BlackRock projected in its ‘Private Markets Outlook’ report, published in 12/12/2023, that low-carbon solutions will be among the biggest investment opportunities next year.
The BlackRock Investments Institute projects that, in a transition scenario, Investments in the global energy system could rise from current US$ 2 trillion per year to US$ 4 trillion, until 2050. https://capitalreset.uol.com.br/financas/investimentos/2024-blackrock-aponta-investimento-em-baixo-carbono-como-mega-forca/
Petrobras has been carrying out tests for sustainable production of aviation kerosene (FROG). At your research center (Cenpes), the oil company has been studying ways to reduce the fossil content in fuels and find a balance between the use of renewable components in production, known as BioQAV.
Fabio Mendes, process engineer at Petrobras, said the challenge with this particular fuel is the freezing point of kerosene, which makes it difficult to obtain the appropriate formulation. “We have been testing the use of soybean oil to replace some of the fossil components of the QAV, but we are still in the data generation phase.”
Biokerosene for aviation (BioQAV) is made from vegetable oils using the same raw materials used to produce renewable diesel.
Forest credits, with emphasis on the REDD+ mechanism
The graph below shows where the carbon market is in Brazil.
Volume of carbon credits by category (em MtCO2eq)
Source: Ecossystem Marketplace – set/ 2021 (data in the accumulated 2021 until August)
REDD+ means Reducing Emissions from Deforestation and Forest Degradation (REDD) and includes the conservation and increase of forest carbon stocks and sustainable forest management (REDD+). In other words, the mechanism is based on reducing deforestation, standing forest conservation, appropriate use of land and forests, in addition to the increase in carbon stocks.
As we know, Forests play an essential role in regulating the climate, in the conservation of biodiversity and the protection of river basins. With the REDD+ mechanism, Owners are encouraged to keep their native forests standing through the sale of carbon credits generated.
https://www.sustainablecarbon.com/redd/
In conclusion, RenovaBio and carbon credits have the potential to unlock the power of a more
sustainable and contribute to the reduction of greenhouse gas emissions. Participate in the credit market
carbon is an opportunity for companies to demonstrate their commitment to sustainability, generate additional revenue and stimulate technological innovation.