Brazil's biogas producer Gas Verde aims to expand its production to 1mn m³/d from 130,000 m³/d until the end of 2025. Chief executive Marcel Jorand told Argus about the company's plans for growth, the sector's outlook in Brazil, biomethane's price compared with natural gas and the need for more infrastructure investments in the country. Edited highlights follow.
How will Gas Verde increase its biogas production?
Gas Verde produces 130,000 m³/d of biogas at its Seropedica plant in Rio de Janeiro state. We are investing R500mn ($98.36mn) this year to expand production to 200,000 m³/d and to replace biogas thermal plants in Nova Iguacu and Sao Goncalo with biomethane plants. Together, they will produce 400,000 m³/d by 2024. In addition, we are looking at the market to expand our presence in Brazil to reach 1mn m³/d by the end of 2025.
How will biogas be priced compared with natural gas? Can it compete with fossil gas at the same price level?
Gas Verde aims to support companies' net zero journey, which is becoming increasingly urgent because of the climate crisis and the emissions reduction targets that countries need to achieve. We believe that biogas is the most efficient solution, as it reduces greenhouse gas (GHG) emissions by 100pc, eliminating the need for carbon credit compensation.
Therefore, there is already huge demand for this biofuel from both the industry and transport companies that need to reduce their emissions. While natural gas is a transitional energy fuel, biogas is 100pc renewable. So, it is difficult to compare the price of biogas with natural gas. Biogas has a significant advantage in that its production is 100pc domestic and its price is tied to the national inflation rate, ensuring cost planning and predictability for companies, which natural gas does not offer.
How can the government drive the sector's growth?
There is a need for "green" credit lines to stimulate biofuel market participants and accelerate expansion and production plans. We also understand that Brazilian states need to create the legal framework for biogas, which will enable us to advance in production volume and adherence to various sectors.
With this scenario and the increasing demand for biogas, there is a natural need to think about the best ways to deliver this 100pc renewable energy solution. That leads us to investments in infrastructure, such as access to gas pipelines. We believe that the sector, industry and government can work together to create a fundamental environment to harness the full potential of biofuels in Brazil.
Could the lack of pipelines in Brazil's countryside hinder the growth of biogas?
Gas Verde's growth is not directly related to pipelines. Obviously, access to them will allow us to expand the distribution of biogas beyond the geographic radius of our plants. Nevertheless, we will continue to distribute by road transport, as there are customers who are not connected to the pipeline.
Our distribution strategy aims to meet customer needs and for that reason we need to have a range of logistics solutions. Today, we deliver compressed natural gas [in trucks] and are converting our fleet to also be fueled by biogas.
How does Gas Verde see the future of the certificate market in Brazil and in the world?
Last year, we launched BIORec, the first biomethane certificate from urban solid waste in Brazil. With it, it is possible to prove the environmental attribute of production, treatment and distribution of acquired biomethane. Recently, the GHG Protocol included biomethane in the list of renewable fuels for accounting emissions in Brazil. That is an important recognition for biomethane and an additional attraction for companies that want to prove their emissions reduction.
