Delaying environmental target could reduce value of diesel and gasoline, experts say

The possibility of postponing the fulfillment of environmental targets by fuel distributors, after a recommendation from the federal government, could lead to a reduction in the price of diesel and gasoline. That’s what industry sources heard by the CNN .

According to these sources, without the immediate need to pay for carbon credits at this time, companies have lower operating costs and must pass this on to the consumer. So, in about two weeks, Brazilians can start to feel a drop of R$ 0.07 in both fuels.

The RenovaBio Committee, made up of members from various ministries and the National Petroleum Agency, guided the extension of the deadline for fuel distributors to reach the goal of Decarbonization Credits (CBIOs). The limit, which is now annual, would be taken to the end of 2023, that is, 24 months.

Fossil fuel distributors must buy these credits, issued by biofuel plants, especially ethanol, to offset greenhouse gas emissions.

The recommendation was announced after the price of CBIOs had a price jump. “The measure is part of the current context of the state of emergency in Brazil, resulting from the extraordinary and unpredictable rise in the prices of oil, fuels and their derivatives and the resulting social impacts, recognized by the National Congress last Wednesday,” said the statement. RenovaBio Committee.

In June 2020, the credit was purchased at R$15. In June of that year, it was found at R$209, according to data from the Cana Observatory, which gathers B3 figures. After the disclosure of the possibility of changing the deadline, the value dropped to R$ 123 on Tuesday (19).

According to sources heard by the CNN , when a CBIO exceeded R$ 200, the impact on the price of fuel to consumers was R$ 0.15 per liter. With the drop, a reduction of R$ 0.07 is expected in the medium term, reaching R$ 0.10, if the value continues to fall.

Each CBIO is equivalent to one ton of carbon dioxide. The Decarbonization Credit is a measure adopted by the National Biofuels Policy (RenovaBio), created to fulfill the commitments made by Brazil at COP 21, the United Nations Climate Change Conference.

Asked how this recommendation will be evaluated and incorporated, the Ministry of Mines and Energy said that “the form of implementation of the measure will be verified in due course.”

The expectation is that the decision will be endorsed by the National Energy Policy Council (CNPE), chaired by the Minister of Mines and Energy, Adolfo Sachsida.

CBIO issuers must question recommendation at CNPE

If the measure encourages fuel distribution companies, it bothers CBIOs issuers. The president of the Brazilian Sugarcane Industry Association (Unica), the main entity that brings together certifiers, Evandro Gussi, stated that he should speak out against the extension at the CNPE.

For Gussi, the measure needs to go through public consultation. “We don’t see legal support, legal support. For us, it is clear that the fulfillment of these goals must be done annually. And we are talking about environmental goals. Postponing this does not seem appropriate to me,” he declared.

The rise in the price of CBIOs made the Ministry of Mines and Energy request an investigation from the Administrative Council for Economic Defense (Cade) on “a possible violation of the economic order practiced in the negotiations of the asset”.

The president of Única says that he does not see irregularities and that the price follows the market movement, with fluctuations in view of the freedom of negotiation of the CBIOs.

“When the CBIO was at R$29, we did not complain that it was too low, even considering our costs. Price is a market mechanism, today we have a liberal government that likes the orthodox economic process, that is, that respects the free organization of the market”, he said.