Paris Agreement, Sugarcane and RENOVABIO

Much has been discussed, at the beginning of the new government, about what environmental policy the country will follow from now on. The first signs, manifested before the tragedy in Brumadinho (MG), pointed to some type of flexibility in environmental matters, whether in licensing or inspection control, among others. However, it is necessary to monitor the movements that will follow from now on.

On the climate issue, the first rumors were that Brazil was about to abandon the Paris Agreement. However, shortly after taking office, the new Minister of the Environment said that ¨for now¨ Brazil would not leave the Agreement.

For our part, we received this information with relief and we are rooting for Brazil to remain committed to the emissions reduction targets it has assumed before the international community.

Firstly, because it seems quite difficult to deny the evidence that the global warming experienced in recent years is due to human action and its anthropogenic activities carried out across the planet. And the stagnation or reversal of this is directly linked to commitments to reduce greenhouse gas emissions.

Secondly, because in the case of Brazil, meeting the emissions reduction targets agreed in the Paris Agreement is an immense opportunity for agribusiness, especially with regard to the sugar and alcohol sector. And this is very simple to see.

Our energy matrix is ​​extremely clean. Whether for the purpose of generating electrical energy through hydroelectric plants, or taking into account the production of biofuels (ethanol and biodiesel), as well as the increasing introduction of wind and solar energy generators into the Brazilian energy base.

Faced with this reality, the Temer government tried to regulate the way in which Brazil would meet its goals assumed in the Paris Agreement. Edited Federal Law n^o 13576/2017, which created RENOVABIO, a program through which our country establishes the ways in which it will reduce its emissions by 2030.

The first step was to define emission reduction targets. Now, the next action is left to the current government, which is to set targets for expanding the addition of ethanol and biodiesel that will be mixed with gasoline and diesel, so that these reduction targets are achieved.

In practice, we will, literally, mix more biofuels with fossil fuels derived from petroleum.

This means increasing the production of ethanol and biodiesel, with a huge economic perspective for the sugar and alcohol sector. Furthermore, RENOVABIO provides for the generation of CBios, which are credits that the biofuel producer can generate for themselves and later sell on the stock exchange. Something similar to what we have already experienced with carbon credits, generated based on the rules of the old Kyoto Protocol.

It is, therefore, a huge opportunity to expand our sugar and alcohol production, with enormous repercussions for agribusiness and generation of economic growth. And this was only possible because we adhered to the Paris Agreement, because we did our homework by approving in Congress a legal instrument that points to this path and that will generate a reduction in emissions with economic growth and generation of wealth for the sector and for the Brazil.

That's why abandoning the Paris Agreement seems unthinkable to us.