FOLHA DE S.PAULO highlights
As a highlight of its edition of March 12, a matter in which it indicates that a possible increase in the ethanol blend in gasoline, from the current percentage of 27% to 40%, would be being evaluated by the government. There is nothing more wrong than that. This issue comes on the eve of the possible federal decree to regulate the RenovaBio, an innovative program to induce increased efficiency in the production of biofuels, but has not yet considered in any opportunity or instance the change of ethanol mixture in gasoline .
RenovaBio opens the possibility of setting long-term targets for biofuels, aiming to stimulate private investments to increase efficiency, with consequent reduction of costs, and prices of biofuels paid by consumers. Future volumes of biofuels will be directly related to these decarbonization targets, which should still be discussed and defined by the government. The decree that should regulate the RenovaBio will define the governing bodies that will be responsible for the definition of these decarbonization targets, and for the monitoring of their compliance. This should be done in addition to the law that created RenovaBio (Law 13,576), approved in the Chamber of Deputies on November 26 last, in the Federal Senate on December 12, and sanctioned by the President of the Republic on December 26. The decree should not define future volumes for any of the biofuels.
The matter is even more implausible in supposing that a decree could alter a law. The mixture of ethanol in gasoline is regulated by Law 13.033, dated 24.09.2014, which defines the limits of ethanol blending in gasoline between 18% and 27.5%. The 27% mixing percentage currently in force was defined by Portaria MAPA No. 75, dated 03.03.2015.
The FOLHA indicates that there would be a clash between the Civil House and the Ministry of Finance around the program, which aims to meet the interest of the ethanol sector, with the Civil House in favor, and the Treasury against. It seems unlikely that this is the case. The text also indicates that projections from the Ministry of Mines and Energy and consultancies, without revealing what they are, indicate that the discussions would be related to the expansion of ethanol supply from 18 billion liters in 2018 to 26 billion liters in 2022, and 31 billion liters in 2030.
Firstly, the RenovaBio is not just about biofuel ethanol. It is a modern and innovative plan that regulates the market of biofuels in general, ethanol, biodiesel, biogas and biomethane and bioquerosene. Second, ethanol production in 2017 was 27.9 billion liters, and in 2018 it is estimated at 28.5 billion liters. In addition, production has already reached the volume of 30.4 billion liters in the 2015/16 crop. Therefore, indicate that there is a clash within the government to increase the ethanol blend content from 27% to 40%, to increase the supply of ethanol from 18 to 26 billion liters in 2022 and 31 billion liters in 2030 seems at least strange.
The reality is that the decree that will eventually be enacted regulating the RenovaBio should not define any volumetric goal, but only establish the instances of government that will be responsible for setting decarbonisation targets, and other government actions defined by law. It is even expected, and desirable, that these goals be defined in harmony between biofuels and fossil fuels.
With RenovaBio, for the first time in the history of the development of biofuels in Brazil, started in 1927 with the production and sale of ethanol by the Serra Grande Power Plant in Alagoas, and later intensified with the extinct National Alcohol Program of 1975, biofuels have the prospect of a future reference on the size of the market ahead, but which still needs to be defined.
RenovaBio will introduce criteria for meritocracy and recognition of the energy and environmental efficiency of producers. It is expected that this recognition will stimulate new investments in improvements and increase of productivity, taking advantage of the enormous stock of innovations available, reducing the cost of production, and consequently the price of the fuels used in the Country.
The RenovaBio was conceived within the government, with broad participation of civil society and all the economic sectors involved. It was submitted to a public consultation, had its guidelines approved by the National Energy Policy Council, was presented as proposed bill by Congressman Evandro Gussi (PV-SP), was approved in the Chamber in a significant vote of 299 votes in favor and only 9 against, was approved by the Federal Senate by acclamation, and was sanctioned by President Temer last December.
RenovaBio is aligned with the most modern in the world in terms of carbon pricing in the market and non-interventionist induction regulation of private agents towards the expansion of the use of bioenergy and biofuels, fundamental actions to be achieved the goal of limiting global warming to 2 degrees Celsius, by 2050. The world expects this protagonism of Brazil.
The federal government is right and gives a very strong signal of cohesion in approving and stimulating the advances advocated by RenovaBio, within an integrated vision for the public policies of energy, environment, industry, agriculture, and social, economic and regional development. The use of biofuels produced in a sustainable and efficient manner will give us longevity for the exploitation of our valuable oil reserves.
* Plínio Nastari is Civil Society Representative at CNPE, National Energy Policy Council