Brazil's renewable natural gas (RNG) sector will continue growing in 2024, but challenges remain.
The certification market for RNG is still in development, with rules for international standards still under construction and demand for domestic RNG — also known as biomethane — unclear. For now, solutions such as self-certification, state-specific standards and biomethane renewable energy certificates (Gas-RECs) will continue to be adopted, depending on specific needs.
In a few years, the certification market may be more unified, but for now the sector will turn to the national biofuels policy Renovabio, the development of a voluntary carbon market, and creation of a regulated one, said Leidiane Ferronato Mariani, founder of biogas think tank Amplum.
In 2024 states will likely look at RNG incentives and increased supply as more projects come to fruition, Mariani said. There are 649,786 m³/d of RNG production, spread across 12 projects, expected to be completed in 2024 awaiting regulator ANP's authorization.
The sector will continue to struggle to find a biomethane price, with variables depending on region, final use of the gas, and the need for either the molecule or its green attributes in the form of a credit. The lack of transparency will remain a challenge as long as there is no price reference.
Transportation will remain a challenge, with most RNG plants located far from pipelines, even as more projects announce plans to inject directly into pipelines. States will also likely incentivize RNG plants to inject production into the gas grid this year, said Mariani.
Last year saw an increase in biomethane project announcements, with clear interest from state distributors and industries in decarbonizing operations. RNG also started to be discussed within energy transition bills in congress, with pressure from producers for a mandate.
Brazilian natural gas trading and logistics company Compass also moved to consolidate itself as one of the most important biomethane players in the country in 2023, signing supply contracts with Brazilian energy group Sao Martinho and solid waste management company Orizon. Sao Martinho's biomethane plant is close to the Sao Paulo state distribution network Necta, which is one of gas distribution subsidiary Commit's companies, offering Compass a route to grow demand.
Bioenergy company Raizen's authorization to connect its Sao Paulo biomethane plant to Comgas' gas distribution network was also a key 2023 development, marking the first time Brazil's largest RNG region was able to access a distribution system.
