Brazil - President Temer signs RenovaBio law

President Michel Temer signed RenovaBio into law on December 26, 2017, a program designed to stimulate biofuel production and use in Brazil in order to help meet the country’s commitment to reduce greenhouse gas emissions under the Paris Agreement.

Details of the program still have to be worked out and full implementation is expected to last about two years, or by early 2020.

Brazil's sugarcane industry expects RenovaBio to incentivise a new wave of investment in the sector, after years of stagnation. Industry association Unica said earlier in December that RenovaBio is expected to be effective by the 2019/20 season, after all the decarbonisation targets and regulations are defined.

Key elements of RenovaBio include the certification of emissions associated with biofuel production on a mill-by-mill basis, and the issuance of emission reduction certificates associated with the physical production of biofuels (principally ethanol and biodiesel) and other forms of clean energy (e.g. electricity production via biomass cogeneration and biogas production). Imported fuel will also be certified.

Fuel distributors will be given annual goals (linked to the Paris Agreement commitments) to accumulate a certain volume of emission reduction certificates and will be liable to penalties if they fail to achieve these goals. Distributors will be able to accumulate these certificates either directly via the purchase of ethanol or biodiesel, or indirectly, via a secondary market, from other distributors who may be willing to sell surplus certificates that they have acquired, or from any other parties who may be permitted to buy and sell the certificates.