Brazil currently may not have official general criteria or guidelines for companies seeking to align their practices with USGE (sustainability, environment, social and governance) practices and strategies, but important steps are being taken across the board. countries to move towards a low carbon economy.
SESG is a term increasingly used in business circles to refer to good business practices that focus on reducing negative impacts and generating positive impacts on the environment and society; USGE practices can also provide a framework for investment risk analysis.
The adoption of initiatives supporting a USGE program has been recognized as a way to bring significant benefits to organizations, adding value, enhancing competitiveness, promoting business continuity and reducing risks and costs. – as well as the integration of the organization into a broader societal collaboration. around the sustainable development of economic activities.
Several initiatives have been adopted in Brazil which focus on the USGE agenda. In this alert, we focus on Element E of USGE – the sustainable use of environmental resources, such as measures to reduce greenhouse gas emissions; appropriate waste management; energetic efficiency; and eco-efficiency, optimizing products and processes – as well as phasing out the use of fossil fuels and replacing them with renewable sources.
More specifically, the transition to a renewable energy matrix is defined in Brazil’s National Policy on Climate Change (PNMC) and its regulations. This policy established the creation of sectoral climate change mitigation and adaptation plans; aimed to expand the supply of alternative renewable sources; and created the Ten-Year Energy Expansion Plan (PDE), a specific sector plan for the energy production and distribution sectors. The latest version, PDE 2029, predicts that by 2029, renewables in the Brazilian matrix will have grown 48% above 2019 figures. Of this total, 19% is expected to be produced from biomass sources ( bioenergy or bioelectricity).
The production of bioenergy has also been encouraged and regulated from a legal point of view, through several rules at the federal and state levels.
At the federal level, in 2011, the National Energy Policy was amended to include an incentive for the production of energy from biomass and by-products of biofuel production (such as biodiesel and ethanol). Also in 2011, the National Solid Waste Policy was promulgated, including among its objectives the incentive to reuse solid waste for energy production.
In 2017, the National Biofuels Policy (RenovaBio) was created, one of the foundations of which is the importance of adding value to Brazilian biomass. RenovaBio defines the criteria for the certification of biofuels, which measures and assesses the role of energy efficiency and greenhouse gas emissions in the life cycle of a biofuel. Producers of biodiesel, biomethane and ethanol generated from sugar cane and corn are eligible for this certification.
In 2020, Brazil made significant legislative advances at the federal level, including:
- the approval of Bill No. 476/2020, known as the New Gas Law, which provides incentives for projects to produce biogas and biomethane from landfills and organic waste and
- approval of the legal framework for sanitation, established by Federal Law No. 14,026 / 2020, which aims to guarantee better access to wastewater collection and treatment systems. This framework aims to increase the number of wastewater treatment plants and, in turn, to increase the possibilities of using biomethane and biogas for energy production.
At the state level, at least 12 states have also published public policies to encourage the production and improvement of a sustainable energy matrix, including bioenergy, providing financial, credit and tax incentives for such activities. In some states, this incentive is also given through specific public policies related to the production of biomass to generate bioenergy from the use of reforested areas – such as Piauí, Rio Grande do Sul and Rondônia – or in the framework of climate-related public policies. change, as in the states of Rondônia and Mato Grosso do Sul. The states of São Paulo, Santa Catarina, Rio Grande do Sul, Paraná and Goiás have created specific policies to encourage the production of biogas and biomethane, in order to improve energy production from biomass.
In addition to these public policies, other state regulations grant special conditions for the environmental authorization of activities related to the production of bioenergy.
Going forward, we expect to see these policies, regulations, and initiatives expand as Brazilian organizations seek to advance their USGE agenda and contribute to the transition to a clean and sustainable energy matrix.