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National Biofuels Policy – RenovaBio

Environmental law and Climate changes
| Mattos Filho

On December 27, 2017, Federal Law No. 13,576/2017 (“Law No. 13,576/2017”) was published. Law No. 13,576/2017 institutes the National Biofuels Policy, called “RenovaBio”, establishing principles, objectives, rationales and instruments. It also contemplates: (i) Biofuels Certification; (ii) the goals for reduction of greenhouse gas (“GHG”) emissions for the fuel sector; and (iii) issuance and negotiation of Decarbonization Credits (“CBIOs”).

Pursuant to Law No. 13,576/2017, producers and importers of biofuels are subject to a certification process. Those who satisfy certain criteria, based on an evaluation of energy efficiency, in terms of GHG reduction for biofuel, compared with fossil fuel, will receive the Biofuels Efficient Production Certificate, which will be valid for up to four years. 

Each fuel supplier will have specific GHG reduction targets, which will be established in accordance with the supplier’s participation in the fossil fuels market in the preceding year. In order to meet these targets the supplier must demonstrate the number of CBIOs it holds as at a date to be established. The applicable fine for not satisfying an individual reduction target may range from BRL 100,000.00 (one hundred thousand Brazilian reais) to BRL 50,000,000.00 (fifty million Brazilian reais).

CBIOs will be traded on organized markets and issued by banks or other financial institutions, which will be chosen by biofuel producers or importers for such purpose.

Despite the importance of Law No. 13,576/2017 in order for Brazil to comply with its commitments under the Paris Agreement and in achieving the goal of increasing the share of biofuels in the national energy mix, some key aspects for the implementation of RenovaBio will need to be established in future regulations. For instance, further rules should establish: (i) the criteria, procedures and responsibilities for the granting, renewal, suspension and cancellation of the Biofuels Efficient Production Certificate; (ii) mandatory annual GHG reduction targets for the sale of fuels; and (iii) issuance, expiration, distribution, intermediation, custody, negotiation and other aspects relating to CBIOs.

In view of the importance of this topic, we will host a breakfast meeting, to be conducted in Portuguese only, on January 30, 2018 to discuss the impacts and challenges for the implementation of RenovaBio. 

For further information, please contact: 

Lina Pimentel Garcia
T +55 11 3147 2824

Luiz Gustavo Bezerra
T +55 21 3231 8293
T +55 11 3147 4627

Viviane Otsubo Kwon
T +55 11 3147 2735

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