**3. The most recent public policy on biofuels: RenovaBio**

### **3.1. What is RenovaBio?**

The National Policy on Biofuels or *Política Nacional de Biocombustíveis* (RenovaBio) is an integral part of the national energy policy to consolidate the production and use of biofuels in Brazil. This program, converted into Law No. 13576 by the Federal government on December 26, 2017 [30], aims to radically expand the production and use of biodiesel, biomethane, and ethanol, among other biofuels, and increase energy security throughout the country and, therefore, create more jobs and income, promote a greater social insertion of family farmers, and help Brazil meet its GHG emission reduction targets, committed at the COP21 [30].

Besides helping the biodiesel market, RenovaBio will also boost the ethanol industry and Brazil's foreign trade balance by diminishing the country's reliance on imported corn ethanol from the United States.

With a nationwide scope, this program also outlines rules for marketing biofuels in the country under the flag of environmental sustainability, and fosters credibility and predictability of national fuel supply. By doing so, RenovaBio will not just help the environment, but it will lay the market conditions for domestic and foreign private investments [31, 32].

This fresh and innovative regulatory framework is supported by two main pillars: the encouragement of energy efficiency throughout the production and use of biofuels and the recognition of biofuels capacity to remove carbon from the environment [33], or mitigate its impacts.

When formulating the basic tenets of RenovaBio, policy-makers and researchers took into account successful international models of initiatives that were enacted for the areas of biofuels and renewable energy, such as the Low Carbon Fuel Standard (LCFS), the Renewable Fuel Standard (RFS), and the Renewable Energy Directive (RED) [34, 35].

Both LCFS and RFS laws, implemented in the United States in 2005 and 2007, respectively, are primarily aimed at reducing carbon intensity in the transport sector [36, 37], while the RED directive, sanctioned in the Europe Union, in 2009, demand that each EU country expressively increase their share of renewable energy to the energy mix in a way that the overall EU share be 20% by the year 2020 [38].

#### **3.2. RenovaBio and Brazil's commitments to mitigate carbon dioxide emissions**

This law also authorizes the increment of up to 15% (B15) of biodiesel to fossil diesel sold to end users, in any part of the country, after completion (up to 36 months of its enactment) of specific tests and experiments on engines that validate the use of the mixture [29]. The specific tests (50 or so) shall be conducted by more than 20 different companies, spread out through

With the anticipation of the B10 blend to March 2018, there should be a progressive increase in the biodiesel-to-diesel mix aiming to achieve the B15 in 2025 in order to meet the country's

The National Policy on Biofuels or *Política Nacional de Biocombustíveis* (RenovaBio) is an integral part of the national energy policy to consolidate the production and use of biofuels in Brazil. This program, converted into Law No. 13576 by the Federal government on December 26, 2017 [30], aims to radically expand the production and use of biodiesel, biomethane, and ethanol, among other biofuels, and increase energy security throughout the country and, therefore, create more jobs and income, promote a greater social insertion of family farmers, and help Brazil meet its GHG emission reduction targets, committed at

Besides helping the biodiesel market, RenovaBio will also boost the ethanol industry and Brazil's foreign trade balance by diminishing the country's reliance on imported corn ethanol

With a nationwide scope, this program also outlines rules for marketing biofuels in the country under the flag of environmental sustainability, and fosters credibility and predictability of national fuel supply. By doing so, RenovaBio will not just help the environment, but it will lay

This fresh and innovative regulatory framework is supported by two main pillars: the encouragement of energy efficiency throughout the production and use of biofuels and the recognition of biofuels capacity to remove carbon from the environment [33], or mitigate its impacts. When formulating the basic tenets of RenovaBio, policy-makers and researchers took into account successful international models of initiatives that were enacted for the areas of biofuels and renewable energy, such as the Low Carbon Fuel Standard (LCFS), the Renewable Fuel

Both LCFS and RFS laws, implemented in the United States in 2005 and 2007, respectively, are primarily aimed at reducing carbon intensity in the transport sector [36, 37], while the RED directive, sanctioned in the Europe Union, in 2009, demand that each EU country expressively increase their share of renewable energy to the energy mix in a way that the overall EU share

the market conditions for domestic and foreign private investments [31, 32].

Standard (RFS), and the Renewable Energy Directive (RED) [34, 35].

more than 15 locations nationwide [21].

**3.1. What is RenovaBio?**

166 Biofuels - Challenges and opportunities

the COP21 [30].

from the United States.

be 20% by the year 2020 [38].

NDC, committed at the Paris Agreement [21].

**3. The most recent public policy on biofuels: RenovaBio**

Biofuels have aroused the interest of the Brazilian government in the light of its mitigating potential against the harm caused by petroleum-derived fuels, mainly in the transport sector [22]. Therefore, by enacting RenovaBio, the Brazilian government has overtly shown to the international scientific community its desire to comply with the Paris Agreement, in which the country presented its voluntary goals for 2030 under the NDC.

To achieve these goals, Brazil will adopt actions to reduce GHG projected emissions and increase the share of renewable energy and biofuels into the country's energy matrix [39], as aforementioned.

Furthermore, there is a possibility of voluntary use of biodiesel in mineral diesel to be greater than the mandatory blend in specific cases, such as: 20% in captive fleets or road users serviced by supply point; 30% in rail transport; 30% in agricultural and industrial use; 100% in experimental use, specific or in other applications [21].

Decree No. 9308, sanctioned on March 15, 2018, addresses the annual compulsory targets to reduce domestic emissions of GHGs and assigns to the National Energy Policy Council (CNPE) the definition of these goals, which are based on recommendations of the Interministerial Committee on Climate Change (CIM) [40].

The breaking down of the national mandatory targets—provided by CNPE—into an individual goal that must be assigned to each biofuel distributor is responsibility of ANP. The distributors that do not comply with their individual goals will be subject to a fine proportional to the noncompliance goal, which may not exceed 5% of their annual revenue, registered in the previous two years [40].

This decree has also established a RenovaBio Committee to provide technical support to CNPE in the process of defining—until June 2018—the annual national reduction targets and it is consisted of agents from seven Ministries, among them Mines and Energy, Environment, and Agriculture. Representatives of other federal, state, and municipal agencies, as well as public and private sector entities from the biofuels market, in addition to technicians and specialists from the sector, whose assistance will be considered provision of unpaid public services, may also be part of this committee as guests [40].

One of the new facets of RenovaBio, missing in previous biofuels policies, is the creation of two important market mechanisms: *Certificado de Produção Eficiente de Biocombustíveis* (CPEB), or Certificate of Efficient Production of Biofuels, and *Créditos de Descarbonização* (CBios), or Decarbonization Credits.

#### *3.2.1. Certificate of Efficient Production of Biofuels (CPEB)*

Chapter 2 of the RenovaBio policy defines the CPEB as a document issued exclusively by inspection companies as a result of the biofuel certification process. These companies must be highly qualified as such (ISO-standard) and be approved by the government in order to inspect the biofuel companies—either producers or importers [30].

After the inspection and certification are over, ANP will audit the whole process in order to approve or disapprove the issuance of the certificate. In case of approval, the list of certified producers and/or importers is published in the official government gazette so they can take advantage of their certification status when marketing their biofuels.

In case of disapproval, ANP then assesses the whole process to see if there was incompleteness or any sort of fraud. If the latter is the case, then ANP establishes an administrative process to revoke the accreditation of the inspection company. If the former is the problem, then ANP sends the whole paperwork to the inspection company redo the process again [41], as shown in **Figure 1**.

Article 28 of the RenovaBio law states that a bonus of up to 20% will be applied on the value of the energy and environmental efficiency grade of the producer or importer of biofuel whose CPEB proves a negative emission of GHGs in its life cycle in relation to its substitute of fossil origin.

It is up to the RenovaBio Committee, among other responsibilities, to monitor the market, supply, and development of the production of biofuels, particularly the installed capacity of companies that hold the certificate that deems their production efficient and environmentally friendly. Government Order No. 103 of March 22, 2018, has set the green light for this Committee to start its activities immediately [42].

The values of the annual mandatory targets were established in units of CBios, with each CBio

emissions in the life cycle of a biofuel and the emissions in the life cycle of its fossil substitute [40]. These calculations will consider energy efficiency in MJ/ton or cbm and environmental impact

e/ton or cbm [33] and will be carried out by RenovaCalc, which is a tool that accounts

eq/MJ [43].

Besides carrying out analyses and studies for the definition of compulsory goals, plus the evaluation and suggestion of preventive measures to adapt them, other responsibilities of the RenovaBio Committee are the monitoring of supply, demand, and price of CBios issued and traded in the stock exchange from the commercialization of biofuels. **Figure 2** shows the links of CBios with the biofuel producers and distributors and how they interplay with the

Historically, Brazil has adopted soybean and beef tallow as the main feedstocks for the fulfillment of biodiesel demand in the country. As previously mentioned, soybean alone accounts for three-fourths of the domestic production, mostly done in the Mid-West and in the South, regions that house the vast majority of Brazil's biodiesel plants, whose owners are also major soy producers and agribusiness companies, well established in both areas for a long time and, therefore, are better prepared to take advantage of the big soy market that was developed

**4. Current and future production, consumption, and capacity**

**4.1. Production, consumption, and installed capacity before RenovaBio**

eq, whose calculations consider the difference between the GHG

Biodiesel in Brazil Should Take Off with the Newly Introduced Domestic Biofuels Policy: RenovaBio

http://dx.doi.org/10.5772/intechopen.79670

169

corresponding to 1 ton CO2

throughout the country [3].

for the carbon intensity of a biofuel in gCO2

**Figure 2.** CBios flowchart. Source: Adapted from [41].

government agencies and certifying companies.

in gCO2

#### *3.2.2. Decarbonization Credits (CBios)*

Chapter 2 of the RenovaBio law states that Decarbonization Credits are instruments registered in the form of scripture for the purpose of attesting the individual target of fuel distributors whose proof of achievement shall be based on the amount of credits held by the fuel distributor on the date defined by the policy [30].

**Figure 1.** CPEB issuance process flowchart. Source: Adapted from [41].

Biodiesel in Brazil Should Take Off with the Newly Introduced Domestic Biofuels Policy: RenovaBio http://dx.doi.org/10.5772/intechopen.79670 169

**Figure 2.** CBios flowchart. Source: Adapted from [41].

After the inspection and certification are over, ANP will audit the whole process in order to approve or disapprove the issuance of the certificate. In case of approval, the list of certified producers and/or importers is published in the official government gazette so they can take

In case of disapproval, ANP then assesses the whole process to see if there was incompleteness or any sort of fraud. If the latter is the case, then ANP establishes an administrative process to revoke the accreditation of the inspection company. If the former is the problem, then ANP sends the whole paperwork to the inspection company redo the process again [41],

Article 28 of the RenovaBio law states that a bonus of up to 20% will be applied on the value of the energy and environmental efficiency grade of the producer or importer of biofuel whose CPEB proves a negative emission of GHGs in its life cycle in relation to its substitute of fossil

It is up to the RenovaBio Committee, among other responsibilities, to monitor the market, supply, and development of the production of biofuels, particularly the installed capacity of companies that hold the certificate that deems their production efficient and environmentally friendly. Government Order No. 103 of March 22, 2018, has set the green light for this

Chapter 2 of the RenovaBio law states that Decarbonization Credits are instruments registered in the form of scripture for the purpose of attesting the individual target of fuel distributors whose proof of achievement shall be based on the amount of credits held by the fuel distribu-

advantage of their certification status when marketing their biofuels.

Committee to start its activities immediately [42].

*3.2.2. Decarbonization Credits (CBios)*

tor on the date defined by the policy [30].

**Figure 1.** CPEB issuance process flowchart. Source: Adapted from [41].

as shown in **Figure 1**.

168 Biofuels - Challenges and opportunities

origin.

The values of the annual mandatory targets were established in units of CBios, with each CBio corresponding to 1 ton CO2 eq, whose calculations consider the difference between the GHG emissions in the life cycle of a biofuel and the emissions in the life cycle of its fossil substitute [40].

These calculations will consider energy efficiency in MJ/ton or cbm and environmental impact in gCO2 e/ton or cbm [33] and will be carried out by RenovaCalc, which is a tool that accounts for the carbon intensity of a biofuel in gCO2 eq/MJ [43].

Besides carrying out analyses and studies for the definition of compulsory goals, plus the evaluation and suggestion of preventive measures to adapt them, other responsibilities of the RenovaBio Committee are the monitoring of supply, demand, and price of CBios issued and traded in the stock exchange from the commercialization of biofuels. **Figure 2** shows the links of CBios with the biofuel producers and distributors and how they interplay with the government agencies and certifying companies.
