Decarbonizing the Cane Business – Experiences From Brazil
Over a three-year period, carbon accounting has been integrated into the Brazilian cane sector, one of Brazil’s biggest agricultural industries. The RenovaBio program has established a functioning market for decarbonization certificates (CBios) within Brazil’s motor fuel sector, and 90% of Brazil’s ethanol production capacity now takes part in greenhouse gas emissions auditing and certification. RenovaBio has created a (modest) new stream of revenue for agricultural producers and processors that is based on analysis of the carbon intensity of their activities, with greater rewards flowing to those with the lowest carbon intensity per unit of output.
The program is successful in that it has stimulated interest in improving field and industrial processes to reduce emissions per unit of biofuel sold. The projected impacts on CBio issuance and revenues now feature in the financial analysis of any new project at a cane mill. However, to date, the additional revenue that RenovaBio has created for biofuel producers has not been considered sufficient or reliable enough to catalyze the investment in new capacity that may be required in the long term to achieve the program’s ultimate goals. Today, RenovaBio operates as a closed market within a specific sector. As the necessity and ambition to see a wider and deeper carbon market evolve in Brazil’s agriculture and economy, RenovaBio may need to change with the times.
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Andy Duff
Head of RaboResearch Food & Agribusiness - South America; Global Strategist - Sugar Read more