BNDES RenovaBio finances R$ 140 million for energy-environmental efficiency in biofuel plants in SP and MT

The National Bank for Economic and Social Development (BNDES) approved financing for FS Bioenergia (R$100 million) and Alcoeste (R$40 million). The resources will be invested in expanding energy-environmental efficiency and certifying the production processes of biofuel plants located in Lucas do Rio Verde (MT) and Fernandópolis (SP), respectively. These are the first operations supported by the new format of the BNDES RenovaBio Program, which in December had its cost reduced and now has targets for reducing carbon emissions linked to the energy-environmental efficiency of each client.

Since its launch in 2021, the BNDES RenovaBio Program has accumulated a portfolio of 12 operations and more than R$1 billion in financing. The Bank's financial support in this line is included in the National Biofuels Policy (RenovaBio), of the Ministry of Mines and Energy (MME).

The expectation is that, with this set of operations, companies will achieve the emission of CBIOs corresponding to 3,4 million tons of carbon avoided per year, an increase of around 13% from the current figure (3 million). This total is equivalent to the carbon capture provided by the annual planting of 23,8 million trees.

The financing constitutes a type of financial credit aligned with ESG criteria (which considers environmental, social and corporate governance aspects), aimed at encouraging the reduction of carbon emissions through the use of biofuels.

If the client proves that the target has been met, the BNDES' basic interest rates can be reduced by up to 0,4%, reaching 0,9% per year. The total interest rate of the loan is also increased by the financial cost, which can be TLP, Selic, among others.

According to José Luis Gordon, Director of BNDES, “the BNDES RenovaBio Program plays a doubly important role in the priorities of the new BNDES management, as in addition to being connected to a Public Policy of the Federal Government, it stimulates the more efficient production of biofuels and thus contributing to the decarbonization of the transport sector”.

“Stimulating the increase in energy-environmental efficiency in the production of biofuels is in line with the current government's commitment to an effective environmental agenda, resuming RenovaBio as a fundamental instrument for the decarbonization of our fuel matrix, generating incentives for those who supply and guaranteeing greater predictability for those who buy”, declared Pietro Mendes, secretary of oil, natural gas and biofuels at the MME.

“FS ethanol has one of the smallest carbon footprints in the world and we were pioneers in implementing a rigorous socio-environmental policy, with tools that allow traceability and monitoring of processed corn. We will continue to seek efficiencies towards our vision of producing ethanol with a negative carbon footprint”, says Rafael Abud, CEO of FS.

“The development of the RenovaBio program has the merit of recognizing and remunerating energy efficiency, in addition to reducing greenhouse gas emissions throughout the process of production, commercialization and use of biofuels, generating greater sustainability for the green and renewable fuels market. , improving extremely desirable results for the future of Brazil and the rest of the world. Alcoeste's fundamental objective is to continually improve its production with Renovabio, and one of the best scores since the first evaluation in 2018, but our objective is to continuously improve, even further, our eligibility score for Renovabio”, declared Luis Antonio Arakaki, CEO of Alcoeste

Main Targets

Loans are not associated with specific projects, but with environmental, social and/or governance performance goals to which customers commit when accessing credit. Companies that achieve the CO2 emission reduction targets stipulated by the program will have a reduction in the interest rate.

To assess compliance with the goals, BNDES uses the Decarbonization Certificate Emission Factor (CBIOs), an official indicator published by the National Agency for Petroleum, Natural Gas and Biofuels (ANP) that covers all RenovaBio certification through Assessment of the Life Cycle (LCA) of production processes.

CBIO is an environmental asset registered by financial institutions and traded by fuel producers and distributors and other investors in the organized market. One unit of CBIO corresponds to one ton of carbon that is no longer emitted into the environment due to the use of fossil fuels.

The BNDES RenovaBio Program thus intends to contribute to increasing productivity and the dissemination of technological innovations in the sector, as well as to the development of the national market for carbon credits and payment for environmental services.