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Ethanol plants and sugarcane suppliers duel for carbon credits as there is no consensus on the division of CBios revenues
Ethanol plants and sugarcane suppliers are dueling over the division of revenue from carbon credits from the federal RenovaBio program, the Decarbonization Credits (CBios). Despite the program that has been in force for a year, forcing distributors to buy CBios from biofuel producers, the rules for dividing this revenue are the responsibility of private agents, who do not reach consensus.
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Independent producers in the Center-South supply a third of the cane processed in the industries, that is, about 200 million tons of a harvest of 600 million in the last harvest (2020/21). Last year, sales of CBios moved R$ 650 million. Each CBio is equivalent to 1 ton of carbon emissions avoided by replacing fossil fuels with biofuels.
Farmers threaten to leave RenovaBio
Due to the collegiate that arbitrates the chain's private relations, Consecana, not having an agreement on the CBios in the negotiations, which began in 2019, since the beginning of the year the ethanol plants started to propose agreements with producers and regional associations to conclude the payments for the 2020/21 cycle, which ended on March 31st. Farmers are not satisfied and some are threatening to leave the RenovaBio.
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It was proposed by Unica that the division of CBios revenues should follow the same proportion of payment for sugarcane, as it considers them one more product sold by the mill based on the raw material supplied, such as sugar and ethanol. By this logic, producers who had their private data used to calculate the potential emission of CBios by the plants would receive 60% of the credits related to the ethanol produced from their raw materials. In the case of ethanol plants that used a “standard” database for producers to carry out certification in RenovaBio, the transfer would be 50%.
Orplana demands that farmers be paid 100% of the CBios generated from ethanol made from sugarcane
However, the Organization of Associations of Sugarcane Producers in Brazil (Orplana) demands that farmers be paid 100% of the CBios generated from ethanol made from sugarcane, given that, if the mills stop processing the supplier's sugarcane, the Ethanol production eligible for the program also decreases, which reduces in equal proportion the ability of plants to issue CBios.
Through RenovaBio, CBios are issued after proof of sale of ethanol batches, based on two elements: the volume sold and the efficiency score, which corresponds to how much the biofuel avoids emissions compared to the fossil equivalent.
Unica informed Valor, in a note, that the negotiations are now individual, but defended the “joint work in the search for consensus”. The entity, however, rejected the proposal for full appropriation of the CBios by the producers and argued that "the reduction of emissions promoted by biofuels does not result from the cultivation of the raw material", but rather when it "is converted into biofuel" and replaces the competitor fossil.
Raízen of the Shell Group wants to build three plants producing ethanol made from sugarcane bagasse and straw
Raízen, the global giant producing ethanol together with Shell, intends to build three more cellulosic ethanol plants — or second generation. The good news was announced by businessman Rubens Ometto, from Cosan, last Monday (15/03)
The technology for producing cellulosic ethanol emerged from a partnership between Shell and the Canadian company Logen, specialized in biotechnology. In the past harvest (2019/20), the Piracicaba unit produced 226 liters of ethanol for each ton of dry biomass.
