We are closing 2021, a great year for biofuels, with a lot of good news for the sector worldwide, which signals good expectations for the new year. Aircraft with SPK (Synthetic Paraffinic Kerosine, a biokerosene, also known as SAF) are already flying in the skies around the world.
The aviation sector is seeking to comply with the definitions of CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) and advanced biofuels will play a key role in the pursuit of these GHG (greenhouse gas) reduction targets by the aviation industry.
The international agreement came into force in 2021 with the adoption of the Voluntary Regime for each country (European Union countries chose to join the regime at this stage) and this mandatory Regime will be adopted between 2027 and 2035.
The governments of Norway and Sweden have enacted laws supporting sustainable biofuels in aviation, while France is discussing a mandate for its introduction in the near future. In the United States, there is already voluntary adoption and major airlines are using biokerosene.
Brazil, in turn, despite having approved quality specifications, needs to move forward with the definition of regulatory frameworks and public policies that support the investment process in the country for this industry.
COP26
Another good news this year was the impact of the 2021 United Nations Climate Change Conference (COP26), held in November. The sense of urgency demonstrated by the main global leaders places biofuels as an ideal solution for large urban centers because they represent a low investment cost in the transition process and do not require changing engines.
The Brazilian business sector was present at COP26 and demonstrated its commitment to sustainable development, economic growth and the generation of green jobs.
While proposals for Electric Vehicles (EV) and the use of hydrogen propulsion have not yet demonstrated their effective contribution to reducing GHG emissions in numbers, biofuels are playing a leading role as an environmentally more sustainable alternative to fossil fuels, with the advantage of not requiring major technical changes or investments in supply infrastructure.
In line with the global trend towards the use of renewable HVO (Hydrotreated Vegetable Oil) or green diesel, ECB Group, through its subsidiary BSBIOS Paraguay, has begun construction work on the infrastructure of our biorefinery in that country. The Omega Green project, with an estimated investment of US$1 billion, involves the first HVO plant in the Southern Hemisphere. Operations are scheduled to begin in 2025.
I personally witnessed during COP26 the worldwide recognition that our National Biofuels Policy (RenovaBio) has as an efficient strategy for introducing biofuels for the transition to a clean energy matrix.
Brazil made a mistake by reducing the blend to a content of 10% (when it should be 13% in 2021 and 14% next year) and I believe that this error will be quickly revised, especially since the country expanded its GHG emissions reduction target from 43% to 50% by 2030. At the time, it was clear that the main path to meeting this target involves and will involve biofuels.
I am increasingly certain that Brazil and Latin America have a huge opportunity to become a Green Middle East of biofuels. To achieve this, we need clear public policies and their continuity so as not to scare away new investments.
By Erasmo Carlos Battistella
CEO of BSBIOS, an ECB Group company
