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Biogas sector sees a favorable scenario with a strengthened environmental agenda in the next governm

SAO PAULO (Reuters) - The biogas sector sees a favorable horizon for the expansion of electricity generation and biomethane projects in Brazil in the medium and long term, with growing demand gaining extra momentum from a strengthened environmental agenda in the next administration.

For agents who participated in the Biogas Forum this Tuesday, the "green" gas segment will follow an irreversible path of growth, anchored in the global energy transition process, with much potential yet to be explored.

"The programs we have for biogas, Renovabio, have already gone through other governments, I don't see an interruption. On the contrary, (we see) an even stronger environmental agenda, a desire for Brazil to insert itself in global chains of decarbonization", he said. Alessandro Gardemann, president of the sectoral association Abiogás, during the event.

He pointed out that biogas is emerging as a solution to enable the decarbonization of more complicated sectors, such as chemical industries and transport.

Biogas is a renewable fuel obtained from organic urban and agricultural waste. Its main uses are generating electricity and converting it into biomethane, a renewable substitute for natural gas.

Although it is still relatively small, the biogas market has been growing in Brazil due to government incentives and investments by large companies, such as Raízen, Vibra and Urca Energia. Between 2019 and 2021, the sector doubled its national production capacity, with the installation of 140 new plants, adding 38 megawatts (MW) in electricity generation and 120,000 m³/day of biomethane, according to data from Abiogás.

Raízen sees great value in solutions involving biogas and biomethane, forecasting to expand its production significantly until 2030, according to Debora Cardoso Vieira, COO of Raízen Geo Biogás.

The executive said she does not see any rupture in the biogas incentive policies in the coming years and defended that the great "watershed" will be the creation of a carbon market in the country.

"If we manage to leverage the green attribute, separating the physical (gas product) from carbon monetization, the better", said Vieira, noting that the great current challenge for projects is to connect the supply of biogas and biomethane to customer demand.

"Brazil has a potential to monetize carbon that we still don't understand, it's an enormous amount," he said, adding that in the European market an important premium is paid for this type of product.

Raízen already produces biogas in a unit attached to the Bonfim bioenergy park, in Guariba (SP), a project in association with Geo Energética. The company is building a second biogas plant, which will be entirely dedicated to the production of biomethane, at the Costa Pinto bioenergy park, in Piracicaba. This project has R$300 million in investments and will have a production capacity of 26 million m³ of biomethane per year.

According to the COO, new biogas projects are being prospected, so that Raízen can take more of these units to its 35 bioenergy parks spread across the country.

According to a study by consultancy McKinsey this Tuesday, given the high availability of raw material for biogas, Brazil would have the potential to reach a production of 460 million MMBTU by 2030 -- equivalent to 25% to 30% of gas demand domestic natural -- reaching a market value of 7.7 billion dollars.


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