Renewable biogas could be Brazil’s energy future

. Oct 23, 2020
biogas renewable energy

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Today, we cover Brazil’s potential for biogas, a dependable renewable energy. The prospects for the agro economy. And what you need to know about the 2020 election.

Biogas is hidden Brazilian treasure

With Brazil facing heat from international players due to environmental issues,

investors have started to pay attention to an often-overlooked energy source: biogas. Renewable and produced from agricultural residue, biogas remains underexplored in Brazil — but some noteworthy projects are beginning to pop up.</p> <ul><li>Last Friday, energy giant Raízen — a company owned by Cosan and Shell — inaugurated the world&#8217;s biggest biogas plant based on agricultural inputs. The facility can produce up to 138,000 megawatt-hours, enough to supply electricity to a city of 240,000 people.</li><li>In an attempt to &#8220;green-wash&#8221; his image, President Jair Bolsonaro — the <a href="https://brazilian.report/podcast/2020/09/23/un-general-assembly-jair-bolsonaro-gives-brazil-a-bad-name/">world&#8217;s unofficial environmental bogeyman</a> — <a href="https://agenciabrasil.ebc.com.br/politica/noticia/2020-10/bolsonaro-e-ministros-inauguram-fabrica-de-biogas-em-sao-paulo">attended the opening</a>, flanked by a handful of cabinet members.</li></ul> <p><strong>Why it matters.</strong> Brazil has tremendous potential for renewable energy, though sources such as solar and wind power are only available intermittently. Biogas is much more dependable.</p> <p><strong>Potential.</strong> According to 2019 data from the Brazilian Biogas Association, the country could supply 40 percent of its energy demand and 70 percent of diesel consumption with biogas. However, Brazil is only using 2 percent of its potential.</p> <ul><li>If all plants just within the state of São Paulo used the entirety of their residues for energy production, they could generate the equivalent of 40 percent of the output of Itaipu — the <a href="https://brazilian.report/power/2019/08/15/itaipu-paraguay-brazil-tension-mario-benitez-impeachment/">massive hydroelectric plant Brazil shares with Paraguay</a>. This finding comes from the Research Center for Gas Innovation, a think tank operating within the University of São Paulo and partially sponsored by Shell.</li><li>While the sector remains incipient, it has recorded marvelous growth in recent years. Of Brazil&#8217;s 366 plants, 82 opened in 2019 — and biogas production potential is up 50 percent over the past year. Things slowed down in 2020 due to the pandemic, but the government expects the sector to pick up where it left off once the economy edges closer to normality.</li></ul> <p><strong>Carbon market.</strong> After three years of planning, decarbonization credits — a cornerstone of Brazilian biofuels policy RenovaBio — made their debut on the São Paulo stock exchange. Now, as trading picks up, these so-called CBIO credits may be leading the way toward a broader carbon market in Brazil, according to Fabio Solferini, CEO at agribusiness consultancy StoneX. <a href="https://brazilian.report/business/2020/10/19/one-step-toward-a-broader-carbon-market-in-brazil/">He spoke to <strong>The Brazilian Report</strong> this week</a>.</p> <hr class="wp-block-separator"/> <h2>Agro economy improves prospects for 2020</h2> <p>The Institute for Applied Economic Research (Ipea) has revised its <a href="https://www.ipea.gov.br/portal/index.php?option=com_content&amp;view=article&amp;id=36926&amp;catid=3&amp;Itemid=3">growth projections</a> for the agricultural sector in Brazil from 1.6 to 1.9 percent. Ipea based its new analysis on promising crop forecasts, notably soybeans (+7 percent), coffee (+21 percent), and corn (which remains stable at record levels).</p> <ul><li>While farming continues to grow, cattle ranching is set for a 1.9-percent contraction in 2020. The drop is not necessarily a sign of poor performance, but rather a result of an abnormally intense H2 2019.</li></ul> <p><strong>Why it matters.</strong> Agribusiness remains a sole bright spot in what is a very sluggish and uncertain Brazilian economy.</p> <p><strong>Yes, but … </strong>Agriculture is an increasingly automated business, meaning that its positive results do not necessarily translate into more jobs, higher wages, and prosperity for the Brazilian economy as a whole. However, agribusiness has a massive production chain that affects several other sectors.&nbsp;&nbsp;</p> <hr class="wp-block-separator"/> <h2>2020 Election roundup</h2> <p>These are the main things you should know about Brazil&#8217;s 2020 municipal elections, with the first round scheduled for November 15:</p> <ul><li><strong>Losing steam.</strong> São Paulo Mayor Bruno Covas is starting to look like the clear favorite for winning re-election in Brazil&#8217;s biggest city. He is leading the polls for the first time in the campaign, though still in a technical tie with Bolsonaro-backed Congressman Celso Russomano (23 to 20 percent, respectively). The trend, however, doesn&#8217;t look good for Mr. Russomano, who was polling 9 points ahead just one month ago. He even risks losing the second runoff spot to left-wing candidate Guilherme Boulos, now polling at 14 percent and rising.</li><li><strong>Et tu, evangelicals?</strong> Former Rio de Janeiro Mayor Eduardo Paes seems poised to return for what will be a third term at the head of City Hall. He is polling at 28 percent, 15 points ahead of any other candidate — and leads among nearly every single voter group. The only exception is Evangelical Christians, the <a href="https://brazilian.report/opinion/2020/08/23/religion-simply-cannot-be-divorced-from-brazilian-politics/">core base of support</a> for incumbent Marcello Crivella, who is himself a preacher. Still, Mr. Paes has halved the mayor&#8217;s lead among this group to just 5 points. Mr. Crivella is polling at only 13 percent overall, tied with Martha Rocha, a local police chief.</li><li><strong>Partisanship?</strong> One piece of data illustrates just how little <a href="https://brazilian.report/power/2018/09/28/rebranding-brazil-parties-election/">partisan affiliation</a> can mean in Brazil. Two-thirds of politicians running for re-election in 2020 have changed parties since 2016. This game of musical chairs is connected with what Brazilian political scientists call &#8220;electoral headhunting.&#8221; Similarly to what corporations do, Brazilian parties go after &#8220;talents&#8221; currently working for the competition — and try luring them with promises of more campaign funding and party control.</li></ul> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Impeachment. </strong>A special trial committee will decide today whether or not legislators in the state of Santa Catarina shall hold an <a href="https://brazilian.report/power/2020/09/17/witzel-moises-impeachment-season-in-brazil/">impeachment</a> vote against Governor Carlos Moisés, accused of illegally granting salary raises to prosecutors. Besides the case, the governor faces two other impeachment requests and his ousting seems more likely than not. </li><li><strong>Environment. </strong>The dry season is still ongoing, but Brazil&#8217;s Environmental Protection Agency (Ibama) has suspended <a href="https://brazilian.report/environment/2019/08/22/amazon-deforestation-bolsonaro-fires/">fire-fighting operations</a> in forest areas due to an alleged lack of funds. The institute&#8217;s president says some contractors have not been paid for three months — and Vice President Hamilton Mourão promised to release money in order to resume operations. The number of forest fire outbreaks in 2020 approaches the 90,000 mark and is already above 2019 levels.</li><li><strong>Supreme Court.</strong> Chief Justice Luiz Fux scheduled the inauguration ceremony of Kássio Nunes Marques, Brazil&#8217;s new Supreme Court Justice, for November 5. The ceremony will be held remotely — a decision made after Chief Justice Fux&#8217;s in-person inauguration resulted in several authorities testing positive for the coronavirus.</li><li><strong>Trade.</strong> An audit by Chinese regulators on four Brazilian meat processing plants flagged as possible coronavirus breeding grounds was considered &#8220;positive&#8221; by Brazilian authorities. A number of sanitary compliance issues were identified, but exports to China may be resumed as soon as they are fixed.</li><li><strong>Award.</strong> Alessandra Korap, a leader of the Munduruku indigenous ethnic group, has won the 2020 Robert F. Kennedy Human Rights prize for her work defending land rights and culture of indigenous peoples in Brazil.  </li><li><strong>Philanthropy.</strong> Earlier this year, the Covid-19 pandemic sparked a never-before-seen response from both Brazilian companies and civil society. The question was whether it would be enough to <a href="https://brazilian.report/society/2020/04/29/could-covid-19-spark-culture-charity-brazil/">promote a lasting culture of charity</a> in the country. The answer, apparently, is no. Since August, donations have ground to a halt — with no significant amount being donated since October 12. &#8220;People, however, continue to be in need,&#8221; says Celso Athayde, a community leader in Rio de Janeiro.

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