Highlights in 2019
Update on clean energy innovation policies and strategies
According to the IEA (2018), Brazil has the greenest energy mix amongst large economies. In 2017, the proportion of renewables in the Brazilian energy matrix was around 43% and 80% in its electricity mix. In line with its goal to expand the use of renewable energy sources, it is expected to reach a share of 47% from renewable sources (electricity and biofuels) by 2027, according to the 2027 Ten Year Energy Expansion Plan.
In the transportation sector, Brazil has strong biofuels mandates (27.5% ethanol mix in gasoline and 12% biodiesel mix in diesel) and it aims to increase biofuels in the energy mix to 18% by 2030 (RenovaBio). The Rota 2030 programme, announced in 2018, requires vehicle manufacturers to increase energy efficiency of their fleet by 11% by 2022, and grants tax cuts on the purchase and import of electric and hybrid vehicles.
The Science, Technology and Innovation Plan for Renewable Energies and Biofuels 2018-2022 is a strategic orientation document of the Ministry of Science, Technology, Innovation and Communications to operate in the areas of renewable energies and biofuels, being part of the National Science, Technology and Innovation Strategy (ENCTI 2016-2022).
In energy efficiency, given the current structure of our economy, a combination of policies has driven efficiency gains of 14% between 2005 and 2018, with emphasis on the residential and transport sector.
In the power sector, auction design has led Brazil to the addition of 30 GW renewables (wind, solar and biomass) in 15 years, using effective planning tools to combine hydropower, gas power, biomass and a continental-size transmission infrastructure to maximize integration of renewables.
Nuclear is also part of the solution. Brazil is developing efforts to make new nuclear plants viable, seeking synergies and externalities in other uses of nuclear technology, as well as assessing the sharing of costs and benefits and paying attention to the communication process with society.
Major innovation initiatives and programmes in 2019/20
Participation in MI provided an inspiring environment for improving Brazil’s database on clean energy innovation investments. The existing experiences have helped accelerate the design of more effective reporting and use it as a tool for improving policies and strategies. One example is the collaboration between Brazil and the International Energy Agency (IEA) aiming at capacity building and methodological development to support a national platform for clean energy innovation spending reports and indicators. Various collaborators have joined this initiative since the last Ministerial Meeting. Third MI Ministerial (MI-3) side events and networking were useful to create links that proved effective to help Brazil build a strategy for improving the data governance on innovation investments for advancing clean energy.
In Brazil the governmental support for research and development activities in the energy sector is fragmented between several institutions. There are programs managed by regulatory agencies, investments by public banks, funding agencies and different public funds. It is understood that the design of a tool capable of concentrating information and classifying it according to international best practices is fundamental to optimize the use of resources and enable greater integration between research and development (R&D) activities with other countries. This is expected to improve the quality of investments, boost public-private collaboration, strengthen innovation networks and accelerate development of clean energy technologies.
A set of programmed activities took place in 2019, including joint work on the development of a data management tool to support tracking clean energy R&D and innovation spending in the Brazil and a fact-finding mission.
With Brazil’s National Policy for Biofuels (RenovaBio) full implementation in 2020, Brazil now has a competitive carbon mechanism in the fuel sector, focused on efficiency and sustainable biofuels. Also, mandatory biodiesel mix has reached 12% by volume (B12) in 2020. Brazil is world’s second largest biodiesel producer, using soybean oil as the main raw material.
The National Agency for Petroleum, Natural Gas and Biofuels (ANP) and the National Electric Energy Agency (ANEEL), responsible for sector regulation, have been active in supporting energy innovation, supervising legal obligations of investments for private companies in research, development and innovation projects in the energy sector.
Other public institutions have been active in financing or offering grants for R&D in clean energy, including the National Development Bank (BNDES) and FINEP (that manages a national fund for R&D, including energy).
Major activities in support of the Innovation Challenges in 2019/20
IC4 (Sustainable Biofuels): Last April, the Brazilian National Biofuels Policy (RenovaBio), became fully operational with the program´s decarbonization credits (CBIO) available for purchase on the Brazilian stock exchange. Certified national and foreign biofuel producers can now sell tradable certificate, each unit corresponding to a total savings of one ton of CO2 equivalent in comparison to fossil fuel emissions. Around 200 production units are now certified with carbon life cycle and sustainability criteria scores, and domestic fossil fuel distributors must start complying with yearly targets for transport fuel matrix carbon intensity reduction with CBIOs.
The effort to take Renovabio from paper to reality started with its approval and publishing on December 2017. Aiming to reduce the carbon footprint of the transport sector and to ensure a long-term demand for low-carbon fuels, RenovaBio was operationalized with the creation of a new and complex regulatory framework.
The overall goals of RenovaBio are to provide consumers with more sustainable fuel choices, foster the continued diversification of Brazil´s energy matrix and promote investment in more efficient and lower carbon feed stock production and conversion processes.
National plans and priorities for clean energy innovation
Brazil seeks to double its government and/or state directed investment in clean energy technology innovation in five years, focusing on renewable and clean energy technologies with the potential to reduce the cost, accelerate public and private partnerships for research, development, demonstration and deployment, and achieve meaningful scale to meet our energy security, economic prosperity, environment sustainability and climate change challenges.
The proportion of clean energy in the Brazilian energy matrix is around 47.5% (renewables and nuclear), with the most important sources being sugar-cane ethanol and hydropower. The share of renewable energy sources in its electricity mix varies between 70% and 90%. This includes hydropower, biomass, wind power, and more recently, solar PV. In line with its goal to expand the use of renewable energy sources, Brazil intends that its total energy matrix reaches, by 2030, a share of 28% to 33% from renewable sources (electricity and biofuels) other than hydropower. Brazil also intends to increase the share of renewables – beyond hydropower – in its electricity generation mix to the level of at least 23% by 2030, from around 13% in 2015.
In 2015 the Brazilian Government spent approximately R$ 1 billion (US$ 270 million) on clean energy technology research, development and demonstration activities. Brazil will seek to double this figure over the next five years. The full suite of low carbon technologies will be considered, including end use energy efficiency, renewable energy, biofuels, nuclear energy, electric grid technologies, carbon capture and storage and advanced transportation systems.