Incentive to biogas and biomethane: understand the legal framework

Incentivo ao biogás e biometano: entenda o marco legal

In the coming years, renewable sources will develop in Brazil. See how PL 3865/2021 will encourage biogas and biomethane.

Bill 3865/2021 aims to encourage actions to encourage biogas and biomethane with the creation of the Incentive Program for the Production and Use of Biogas, Biomethane and Associated By-products (PIBB).

The project was proposed by deputy Arnaldo Jardim, who is vice president of the Parliamentary Front for Renewable Energy. The proposal came a day after Brazil joined the Global Commitment on Methane, which provides for a 30% cut in emissions by 2030. Thus, the approval of the project would be one of the necessary steps for the country to be able to decarbonize the sectors and curb the global warming.

Incentive to biogas and biomethane: what does the project foresee?

With an energy transition underway in the country, biogas and biomethane are emerging as important renewable sources for this change. Currently, less than 1% of the energy matrix is ​​represented by biogas, but the sector could generate 47 billion m³ of gas per year. The amount is enough to supply nearly 35% of Brazil’s energy demand. However, one of the obstacles to the development of the source is the few investments and regulation of the sector, which could make many projects viable.

PL 3865/2021 proposes the creation of a new regulatory legal framework, including stimulating joint actions by the Union, through tax incentives to encourage investments in the production of biogas and biomethane, in addition to credits with differentiated interest rates for the implementation of plants.

Among the objectives of the proposal is the encouragement and expansion of renewables in the energy matrix through the generation of gases from biomass. In addition to stimulating infrastructure and logistics, in order to facilitate the internalization and expansion of the model.

In order to be a project that really meets the demands of the sector, the text was prepared with the contribution of the Brazilian Biogas Association (ABiogás), the Cogeneration Industry Association (Cogen) and Unica (Sugarcane Industry Union) and support technician from the Ministry of Agriculture and Embrapa.

According to the PL, to increase the use of biofuel, it is necessary to contract biogas plants in auctions until reaching 1,000MW, with a fixed percentage and a 15-year supply period, in each event until the auctions held in 2027.

The bill also provides for the National Treasury to allocate a portion of the budget to the incentive program. This targeted value is critical to developing the sector, as the source is still more costly than others.

Advantages of the Bill

Brazil has the greatest biogas production potential in the world, which can reach 19 GW of installed capacity or 120 million m³/day of biomethane. Thus, the incentives for biogas and biomethane consist of a short and medium-term solution for expanding the supply of decarbonised, dispatchable and decentralized energy. This is fundamental, especially at this time when the electricity sector is going through a crisis and needs stable and non-intermittent sources.

The project also seeks to correct regulatory distortions that prevent isonomy between sources, including biomethane in the Special Incentive Regime for Infrastructure Development (Reidi). According to Abiogás, this extension to biomethane could unlock investments in the order of R$ 10 billion over the next five years.

In addition to developing the sector, the PL also contributes to the Union’s obligations regarding the correct handling and disposal of waste. In other words, by investing in biogas plants, it is possible to deal with an externality, giving a new end to organic waste that serves as possible for energy generation, stimulating the bioeconomy.

Thus, the incentive program has the objective of making biogas a growing reality in the national territory. Thus, it is possible to contribute to the diversification of the matrix, to sustainability and energy security.
If you are interested in the subject, read the text and find out why investing in renewables is better than fossil fuels.


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