The National Agency of Petroleum, Natural Gas, and Biofuels (ANP) has recently disclosed the compulsory individual targets for fuel distributors in 2024 under the RenovaBio program, Brazil’s National Biofuels Policy. These targets are crucial for promoting sustainable practices and reducing greenhouse gas emissions in the fuel sector.
Understanding CBIOs
Decarbonization Credits (Créditos de Descarbonização – CBIOs) are environmental assets issued by biofuel producers based on the efficiency rating of their certified production and the volume of biofuel sold. Each CBIO represents one ton of greenhouse gases not emitted into the atmosphere due to the use of biofuels instead of fossil fuels. These credits are traded on the Brazilian stock exchange (B3) and are acquired by distributors to meet their individual targets or by interested third parties.
Calculation of Individual Targets
The individual targets for 2024 were calculated based on the annual compulsory CBIO target of 38.78 million, as set by the National Council for Energy Policy (CNPE). Each fuel distributor’s market share in fossil fuel sales determined their individual targets, following the methodology described in Article 6 of ANP Resolution No. 791 of 2019.
Methodology for Calculating Market Share
1. Volume Commercialized by the Distributor (I):
- The total volume of fuel sold by the distributor during the relevant period.
- This includes each of the specified fuels listed in Item I of the Annex.
2. Fossil Fuel Quantity Corresponding to Product Volume (II):
- For each product commercialized, this variable represents the amount of fossil fuel (non-biofuel) associated with the volume.
- It accounts for the reduction due to the presence of biofuels in the product.
3. Calculation of Greenhouse Gas Emissions per Fossil Fuel Sold (III):
- The formula for calculating emissions from fossil fuels is provided in Item II of the Annex:
Emissions = Volume x Emission Factor
4. Summation of Emissions for Each Fossil Fuel Sold (IV):
- This step involves adding up the emissions corresponding to each fossil fuel type sold by the distributor.
- The formula is specified in Item III of the Annex:
Total Emissions = ∑Emissions for Each Fuel Type
5. Market Share of the Distributor (V):
- The distributor’s market share is determined using the formula outlined in Item IV of the Annex:
Market Share = Total Emissions / Total Emissions in the Market
Additional Considerations
1. Exclusion of Non-Substitutable Fossil Fuel Sales:
- Sales of fossil fuels for which there is no national substitute biofuel available at a commercial scale are not counted toward the distributor’s target calculation.
2. Annual Publication of Codes:
- The ANP annually publishes an updated list of codes corresponding to products and operations within the Product Handling Information System (Sistema de Informações de Movimentação de Produtos – SIMP). These codes are essential for calculating market share in fossil fuel sales.
3. Exclusion of Certain Volumes:
- Volumes sold to other distributors and those earmarked for export are excluded from the total volume of each fuel type commercialized by the distributor.
Compliance Deadline
Fuel distributors have until December 31, 2024, to demonstrate compliance with their 2024 targets.
The RenovaBio program plays a vital role in advancing Brazil’s commitment to sustainable energy and mitigating climate change. By incentivizing the adoption of biofuels, it contributes to a greener and more environmentally responsible energy sector.