The price of carbon credits in the fuel sector in Brazil hit R$202 on Thursday (30), putting pressure on gasoline and diesel prices at a time when federal and state governments give up revenue to try to lighten the consumer’s pocket.
The value of bonds, which are called Cbios, more than tripled in 2022. In one year, they became seven times more expensive. According to fuel distributors, today they represent between R$0.15 and R$0.20 of the final price of gasoline and diesel.
The fuel sector accuses ethanol and biodiesel producers of speculation, issuing a volume of bonds below demand. These, in turn, say that prices reflect tightening in the supply and demand scenario for certificates.
Fuel distributors are required to purchase certificates to offset the emission of pollutants in the consumption of products. The objective is to transfer resources from the sale of fossil fuels to the production of renewable energy, reducing its cost and encouraging consumption.
Cbios began to be traded in 2020, at a troubled time after the start of the pandemic and amid a clash between the fuel sector and ethanol and biodiesel producers. With the drop in consumption, the government even reduced the targets in the first year of the program.
Each Cbio is equivalent to the emission of one ton of carbon into the atmosphere. The goals of each distributor are calculated according to the volume of fossil fuels that each one puts on the market. In 2022, they will have to buy around 36 million bonds.
At the beginning of the year, when bonds were approaching R$80, the fuel sector asked for government intervention in the market, but it was not granted. Companies complain that the bond trading model currently represents a transfer of wealth from consumers to mill owners.
“The existence of the obligation to purchase by the distributors and the non-obligation by the issuers to offer the Cbios for sale is one of the distortions that we identified in the current model”, says Brasilcom, an association that brings together small and medium-sized distributors.
The entity says that the additional costs with the purchase of certificates need to be passed on to the consumer and currently estimates an impact of R$ 0.15 per liter. Thus, he says, consumers pay more to finance biofuel producers.
On the other hand, the assessment is that prices reflect a tighter market. For Ubrabio (Brazilian Union of Biodiesel and Biokerosene), the volume of certificates dropped due to the reduction of the mandatory blend of biodiesel to 10%, four percentage points less than the forecast for the year.
Unica (União da Indústria da Cana-de-Açúcar), the MME (Ministry of Mines and Energy) and the ANP (National Agency for Petroleum, Gas and Biofuels) had not responded to requests for an interview until the publication of this text.
In a conference call to detail the balance of the first quarter, the president of Raízen, Eduardo Mussa, said that the supply of certificates this year is sufficient, but the acquisition targets become more aggressive in 2023, which is leading buyers to anticipate acquisitions.
“Looking ahead, what we are going to see is a fairer market for Cbio and prices are reflecting that,” he said. In 2022, distributors will have to buy 36 million certificates. For 2023, the goal reaches 42 million titles.
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