“The measure is inconsistent with Brazil’s commitment to the environmental agenda, reinforced at COP27, in Egypt, and at the World Economic Forum, at Davos…”
Evandro Gussi is the president and CEO of the Brazilian Sugarcane Industry and Bioenergy Association – UNICA, was a federal deputy for the State of São Paulo and inspector of the Chamber of Deputies.
Gussi holds a master’s degree in constitutional law from the Federal University of Rio Grande do Sul and a doctorate in State theory from the University of São Paulo.
UNICA is an entity dedicated to providing clean, renewable and natural energy in the form of sugar, biofuels, bioelectricity and biomass.
AgriBrasilis – What is the Provisional Measure (MP) No. 1,157? What are its effects on the sugar-ethanol sector?
Evandro Gussi – MP No. 1,157 reduces to zero the contribution rates for the federal taxes on gross revenue, PIS/PASEP and Cofins, levied on operations carried out with ethanol and gasoline until February 28th, and other products until the end of the year. In practice, this measure maintains a gasoline subsidy policy implemented by the Bolsonaro government, that favors fossil fuel over renewable fuel, considered by consumers as substitutes.
The measure is inconsistent with Brazil’s commitment to the environmental agenda, reinforced at COP27, in Egypt, and at the World Economic Forum, at Davos. From an economic perspective, the losses for the sugar-ethanol sector are around US$ 579 million in two months, directly impacting the entire sugar-ethanol chain, that has invested heavily in research and development to increase productivity, offering a product lined up with the country’s decarbonization goals in view of international agreements to face the climate crisis.
AgriBrasilis – Why are decarbonization credits relevant in this context?
Evandro Gussi – The CBios, created by the National Policy on Biofuels, RenovaBio, started to be offered by bioenergy producers as of 2020. This tool offers an opportunity to offset emissions for economy sectors with higher mitigation costs, in addition to representing the beginning of a promising market for the sugar-ethanol chain. Each CBio represents a tonne of Equivalent CO2 (CO2eq) that is no longer emitted because of the replacement of fossil fuels by biofuels.
One of the consequences of the loss of competitiveness of ethanol is the reduction in the emission of CBios. The fuel source decarbonization dashboard from FGV shows that GHG emissions reached 27.3 million tonnes of CO2eq in the light fuel source in the third quarter of 2022, an increase of 0.79% compared to the same period of 2021. It is a road on the opposite way of mitigating the climate crisis.
AgriBrasilis – To Europe alone, Brazil exported 800 million liters of ethanol in 2022. Is Brazil competitive to compete for market share with USA?
Evandro Gussi – More than competing for market share with USA, we want to join efforts to create a global ethanol market, turning the product into a commodity.
The necessary condition for this is that a free market prevails, without tariff or technical barriers, within a healthy environment of competitiveness.
AgriBrasilis – You took part in the new government’s transition group. What to expect from the new management regarding the sugar and alcohol sector?
Evandro Gussi – I took part in the Agriculture’s transition group, led by Minister Carlos Fávaro, who follows a path connected with our vision that only agriculture and livestock with a very high socio-environmental commitment will be strong and have space in the 21st century.
In the sugar-ethanol sector, we have competitive advantages that can position Brazil at the forefront of the low-carbon economy, and the government demonstrates to be aligned with this perspective. We hope that the speeches translate into effective measures and actions.
AgriBrasilis – What changes have been brought about by the National Policy on Biofuels since its creation?
Evandro Gussi – RenovaBio is a very important regulatory framework for Brazil’s energy policy, recognized worldwide. When considering the contribution of biofuels to the reduction of greenhouse gas emissions, the program has provided investments in expanding capacity, technology and ethanol production, with the consequent generation of more jobs in the sector.
In the regulatory sphere, the program encourages carbon markets in Brazil and public policies for mobility that preserve technological neutrality and aim at lower GHG emissions per kilometer driven.