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Bruno Serapião

CEO of Atvos

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The importance of Brazil for the global energy transition

A major global event, such as the Conference of the Parties, is always an important event. After all, the Conference helps to outline the guidelines for what society should seek in terms of socio-environmental balance. In this sense, we want to increasingly value the leading role of biofuels in the climate agenda and Brazil's leadership potential on international stages of this size.

The great global challenge, which has already been addressed, is the need to prevent the increase in the global average temperature from exceeding, in the coming decades, the level of 1.5 degrees Celsius in relation to pre-Industrial Revolution levels. This is precisely why the biggest powers and the main companies in the world are setting targets to reduce their carbon emissions. What is becoming increasingly clear is that the use of biofuels, on a large scale, will play a key role in the transition of the global energy matrix, as a way of reducing dependence on and use of fossil fuels.

During the Conference of Parties 28, Brazil showed concretely that it can be a major protagonist in this movement, due to its undeniable potential in the production of biofuels. Representatives of the national public authorities, on different occasions, made it clear that the country's willingness is to pave this route, and business representatives also tried to demonstrate the solidity of large Brazilian producers, capable of delivering quality, competitiveness and volume to the extent of that the planet needs.

There are few countries in the world with such expertise and solid programs to promote this type of production, which, in the case of Brazil, has sugarcane ethanol as one of its main protagonists. Still in 1931, the country took the lead by implementing the mandatory use of 5% ethanol in gasoline, increasing to 25% in 1975, almost fifty years ago. And, since 2003, it started to adopt the concept of flex cars fuel, with possible use of ethanol and gasoline.

It was actions like this that helped to consolidate a biofuel production structure that is practically unique in the world, in quality and scale of supply to different markets and locations on the planet, and which will be a powerful platform for the energy revolution that the planet seeks. This change will not be a trivial task. To become an effective solution, the adoption of bioenergy must respect a triad: be sustainable, reliable and economically viable. Bringing these three qualities together is not simple, but the good news is that Brazil already has many of the solutions.

The solution to decarbonizing transport needs to be sustainable from start to finish, and, in this aspect, ethanol stands out. A study carried out by Stellantis and released in March 2023 showed that cars powered by Brazilian ethanol are more beneficial to the environment than electric models, which use energy sources available in Europe, when taking into account the entire energy generation cycle, in concept known as "from the well to the wheel".

Ethanol is responsible for carbon dioxide emissions of 107.2 grams per kilometer driven, while a 100% electric European car emits 126 grams of carbon dioxide for every kilometer traveled. The Brazilian solution is also reliable, with the adoption of programs that enabled the strengthening of the most robust fleet of flex-fuel vehicles fuel in the world, with use on a proven scale and quality and with ethanol presenting itself as an economically viable solution.

Creating an infrastructure capable of guaranteeing the supply of a large number of electric cars would involve a gigantic investment of resources, difficult to apply in countries in the global South. These nations, however, already have a complete network of gas stations, whose adaptation to biofuel would be much simpler and economically feasible.

Another urgent demand is to design a possible proposal for the decarbonization of air transport. To this end, the implementation of sustainable aviation fuel must be a priority. Europe recently imposed a requirement that energy companies and airlines meet targets of 6% use of sustainable aviation fuel by 2030, increasing to 70% by 2050. In other words, all possible solutions for this production must be encouraged, and the alternative based on sugarcane ethanol, which has already proven to be a valuable possibility, must be accelerated, based on a boosting national regulatory framework.

To guarantee the necessary traction for the decarbonization of transport, it is also necessary to consolidate the Book & Claim model, which allows a company to appropriate carbon credits generated by another organization that already uses renewable energy, through payment. It is an economical solution to encourage decarbonization, and there is a large market for national companies to adhere to this format, since the Brazilian energy matrix is well ahead of the world.

In this sense, Brazil was also a pioneer with the National Biofuels Policy. Considered the largest decarbonization program on the planet, the initiative has already prevented the emission of more than 100 million tons of carbon dioxide equivalent into the atmosphere and rewards the efficient production of ethanol with the generation of Decarbonization Credits.

These shares are sold on B3 and are a step forward in consolidating the Brazilian sustainable energy matrix. For this year alone, the government's estimate is to issue 38.78 million bonds. Still in the aspect of sustainability, but with a focus on the social sphere, we cannot fail to highlight the social inclusion that the sugarcane chain provides, especially in the interior of Brazil. By establishing themselves in small cities, bioenergy companies generate wealth and economic movement in regions that often lack investment.

In addition to generating employment and income for the surrounding communities, small businesses and businesses are strengthened and help to rotate the local economy, helping to prevent the migration of this population to large urban centers in search of better living conditions. The protagonism that Brazil has been gaining tends to solidify until November 2025, when the Conference of Parties 30 is scheduled to be held in Belém (Pará), which will also be the first capital in the Amazon to host this very important conference of the Organization of Nations United.

It will be the perfect opportunity for the government, civil society and companies to engage in transforming public policies into actions, demonstrating that the country is of central importance for global energy security, through the use of bioenergy. As CEO of Atvos, one of the main biofuel producers in Latin America, I will be increasingly present at global events to highlight the evolution of transport decarbonization and the importance of the Brazilian energy matrix for mitigating global warming.