Brazil is considering integrating its biomethane certificate of guarantee of origin (CGOB) to Cbio decarbonization credits, as biomethane plants will be eligible to generate both.
The fuel of the future bill's approval established a mandatory biomethane blend into natural gas pipelines, which can be fulfilled either with the physical molecule or by buying the newly proposed CGOBs.
As a result, natural gas producers and importers will have to reduce greenhouse gas (GHG) emissions by 1pc in 2026 through the mandate that starts at 1pc and may increase to up to 10pc in subsequent years. Oil and gas regulator ANP is now leading regulatory discussions on the law.
As biomethane producers are eligible to issue Cbios once authorized under the biofuels carbon credit Renovabio program — also mandatory in Brazil but aimed at motor fuel distributors — there are discussions on how to prevent double counting.
Brazilian biogas producers association Abiogas points out that Cbios and CGOBs represent different concepts: the first acts as a carbon credit, while the latter is a guarantee of origin, so there is no risk of double counting. Additionally, Cbios are not used in companies' GHG emissions reports. "This would not be any different from what happens in the US," Abiogas' president Renata Isfer said. "The low-carbon fuel standard, which is similar to Cbios, is not counted in the inventories, while the US Renewable Fuel Standard, like the CGOB, is." Abiogas said there could be transparency to consumers, so they can opt to buy CGOBs from plants that do not issue Cbios if that concerns them. Critics worry this can lead to double counting and less international acceptability.
The market is also debating whether this certificate will need to be retired to satisfy mandatory buying, as is the case with Cbios, or if buyers will be able to resell CGOBs after purchasing them. Participants again worry this might lead to double counting, as producers and importers would be reselling a credit that has been accounted for in the voluntary market. "Motor fuels distributors will want to do the same with Cbios," a market participant said.
ANP will also have to define biomethane volumes necessary for the target, determine which gas producers and importers are big enough to be a part of the compulsory market and specify how much biomethane a CGOB will represent.
