Figure with a light gray background with green circular patterns.

Bioeconomy in Brazil – Main Discussions

Bioeconomy is an industrial production model based on biological resources, aiming to replace the use of fossil and non-renewable resources in production chains. This proposal, which involves low emission of greenhouse gases (GHG), meets society's growing concern and expectation regarding environmental and climate issues.

The model employs technology and innovation to originate products that encompass various industrial segments. Among its main pillars, the following stand out: the production of bioenergy, biologically-based chemical inputs and renewable materials, which involves the production of biodegradable plastics, biopolymers, biopesticides, pigments, functional and biofortified foods, medicines, fragrances and cosmetics.

Brazil has comparative advantages and great potential to develop the bioeconomy, as it holds around 20% of the planet's biodiversity and great environmental assets. Currently, there are successful bioeconomy models in the country, mainly in the energy and agriculture sectors, in addition to several ongoing discussions for the development of the theme, mapped below.

Current regulations

Although there is no specific Legal Framework on the subject, there are sectorial policies and regulations that allow the promotion of the bioeconomy in different sectors. This framework is mainly formed by the Biodiversity Law (Law 13,123/2015) and, more recently, for Brazil's adhesion to the Nagoya Protocol.

The Biodiversity Law regulates access to biodiversity, associated traditional knowledge and the sharing of its benefits for the conservation and sustainable use of biodiversity. The Nagoya Protocol is the main multilateral agreement governing the exchange of genetic material between countries. Accessory to the Convention on Biological Diversity (CBD), its objective is to facilitate the fair and equitable sharing of benefits derived from the use of genetic resources from biodiversity and the traditional knowledge associated with them.

The country's adhesion to the Protocol contributes to the legal security of users and suppliers of genetic material and can play an important role in the process of valuing Brazilian environmental assets, especially in the context of payment for environmental services and in the development of the bioeconomy.

Also related to the topic of bioeconomy: the Biosafety Law (Law 11.105/2005), which establishes safety standards and inspection mechanisms for activities involving genetically modified organisms (GMOs) and their derivatives; the Industrial Property Law (Law 9279/1996), which regulates rights and obligations related to industrial property; the Innovation Law (Law 10973/2004), which establishes measures to encourage innovation and scientific and technological research in the productive environment; and the Law of Good (Law 11.196/2005), which provides incentives for technological innovation.

Initiatives under debate

Agriculture, Livestock and Supply

National Bioinput Program: Launched by the federal government in May 2020, the Program aims to boost the use of biological resources in Brazilian agriculture, taking advantage of the country's biodiversity and reducing dependence on imported inputs.

In the agricultural field, bio-inputs cover a wide range of technological solutions, such as inoculants, plant growth promoters, biofertilizers, products for plant and animal nutrition, plant extracts, pesticides made from beneficial microorganisms for pest control, parasites and diseases, such as fungi, bacteria and mites, even herbal products or technologies that have biological assets in their composition, both for plants and animals, as well as for processing and post-harvest.

The Program has a strategic committee, composed of representatives from MAPA, the Ministry of Science, Technology and Innovation (MCTI), the Brazilian Institute for the Environment and Renewable Resources (Ibama), the National Health Surveillance Agency (Anvisa), in addition to agricultural entrepreneurs, organic producers and entities that work in rural extension.

The establishment of partnerships with agencies and entities, public or private, is planned to implement, disseminate and develop actions for the use of bio-inputs, in addition to fostering national and international cooperation projects to promote the topic.

Brazil Bioeconomy Program - Sociobiodiversity:  O program was established by the Ministry of Agriculture, Livestock and Supply (MAPA) in 2019. The objective is to promote the articulation of partnerships between the Government, small farmers, family farmers, traditional peoples and communities and their enterprises and the business sector. These partnerships should promote production systems based on the sustainable use of resources from socio-biodiversity and extractivism, and the production and use of energy from renewable sources that allow for expanding the participation of these segments in productive and economic arrangements involving the concept of bioeconomy.

Embrapa Agroenergy: The Brazilian Agricultural Research Corporation (Embrapa) has the National Agroenergy Research Center (CNPAE), a decentralized unit that operates with a strategic vision of agribusiness and with a focus on technological innovation in agroenergy production chains. The focus of the unit is to promote and carry out research for the development of new biomass for application in industrial use, in the production of biofuels and new bioproducts.

Energy

National Biofuels Policy (RenovaBio): was instituted by law 13.576/2017 and establishes annual national targets for decarbonization of the fuel sector to encourage increased production and participation of biofuels in the country's transport energy matrix.

The targets are established by the National Energy Policy Council (CNPE) and are broken down into individual mandatory targets for fuel distributors according to their participation in the fossil fuel market. Biofuel producers and importers, after being certified by the ANP, can generate ballast for the primary issuance of Decarbonization Credits, the so-called CBIOs, using biofuel sales invoices.

The program has demonstrated effectiveness and, in 2020, 98% of the target for acquiring decarbonization credits was met. For 2021, the Ministry of Mines and Energy reaffirms the goal of 24.86 million CBIOs to be acquired in the market organized by distributors. Throughout the year, the CNPE should consolidate the emission reduction target for 2022-2031.

Alternative Sources Incentive Program (PROINFA): was created by Law No. 10.438/2002 with the objective of increasing the participation of alternative renewable sources (small hydroelectric plants, wind power plants and thermoelectric projects using biomass) in the production of electric energy, favoring entrepreneurs that do not have corporate links with generation, transmission or distribution concessionaires.

The Ministry of Mines and Energy (MME) is responsible for establishing the annual planning of actions, defining the annual amount of contracting and evaluating the impact resulting from the costs to final consumers. The implementation of contracting and selection of projects for purchase and sale are carried out by Eletrobrás.

Environment

The development of the bioeconomy is appointed by the government as the main tool to combat illegal deforestation in the Amazon, as it generates alternative income for the population. Vice President Hamilton Mourão has stated on several occasions that this model is the most suitable for the Amazon region and defends the mapping of value chains for local products and the improvement of sustainable logistics infrastructure. In a virtual session of Agenda Davos, he stated that the participation of private capital in research and investments in the bioeconomy is essential. According to the vice president, the government will not have a surplus available to direct these activities in the post-pandemic economic scenario.

National Biological Diversity Program (Pronabio): Created to coordinate the implementation of the commitments of the Convention on Biological Diversity, by the Decree 4.703/2003, the program promotes the partnership between the Government and civil society for the knowledge and conservation of biodiversity, sustainable use of its components and fair and equitable sharing of the derived benefits.

The National Biodiversity Commission, composed of representatives of government agencies and civil society organizations, is responsible for implementing the commitments assumed by Brazil and for identifying and indicating priority areas and actions for research, conservation and sustainable use of the components of biodiversity.

National Benefit Sharing Fund: Established by the Biodiversity Law, the Fund's objective is to value the genetic heritage and associated traditional knowledge and their sustainable use. In 2020, it was defined that the National Bank for Economic and Social Development (BNDES) would be the federal financial institution responsible for managing the resources arising from royalties from genetic heritage.

The collection is done as follows: companies that benefit from the Brazilian genetic heritage must contribute to the fund with 1% of the annual net income obtained from economic exploitation, while the activity lasts.

The expectation is to provide a financial return that generates sustainable development for communities that have knowledge of traditional use, in addition to encouraging sustainability, combating biopiracy and providing investors with legal certainty.

Science, Technology and Innovations

National Scientific and Technological Development Fund (FNDCT): Created in 1969, its objective is to financially support priority programs and projects for national scientific and technological development.

The Financier of Studies and Projects (Finep) is the Executive Secretariat of the FNDCT, being responsible for administrative, budgetary, financial and accounting activities. Finep has already developed other initiatives that benefited the bioeconomy sector, such as the Support Program for Innovation in the Sugar-Energy and Sugar-Chemical Sectors (PAISS).

THE Complementary Law 177/2021 it prohibits the blocking of FNDCT resources and transforms it into a financial fund. Thus, the Fund's resources should support Science Technology and Innovation (CT&I) programs, projects and activities aimed at neutralizing greenhouse gas emissions and promoting the development of the bioeconomy sector. In addition, the loan for technological development projects of companies with reimbursable resources had its limit increased from 25% to 50% of the FNDCT budget.

National Strategy for Science, Technology & Innovations (CT&I) 2016-2022: prepared by the Ministry of Science, Technology and Innovations (MCTI), it guides the preparation, conduct and monitoring of ST&I actions. Thus, the Action Plan on Science, Technology and Innovation in Bioeconomy to produce and apply scientific and technological knowledge, fostering the strategic insertion of the Brazilian bioeconomy in the global scenario.

For the construction of the Plan, the MCTI created a Technical Working Group composed of specialists in Bioeconomy to assist it as an advisory body. The Group is made up of representatives from the government, academic and business sectors.

Bioeconomy Productive Chains Program: Established by Ordinance 3877/2020, the Program encourages actions to promote the productive chains of Brazilian biodiversity and will support actions aimed at the development of new products, technologies, inputs and materials from and for these chains. The Program will articulate actions at the federal, state and municipal levels, operating through orders, public calls and cooperation agreements, including with the private sector.

Economy

Fund for Sustainable Development and Bioeconomy of the Amazon: Launched by the Inter-American Development Bank (IDB), the fund has an initial allocation of US$ 20 million for technical cooperation and project design to promote inclusive and sustainable activities. The objective is to promote the bioeconomy and development based on forest assets. The amount for sustainable projects in the region is expected to reach the level of US$ 1 billion.

AMACRO Project: The Sustainable Development Zone project for the States of Amazonas, Acre and Rondônia proposes a forest protection belt offering a set of multi-sector actions aimed at promoting sustainability through the socioeconomic development of an area that covers about 32 municipalities and population estimated at 1.7 million people.

Amazon Biotechnology Center: Managed by the Manaus Free Trade Zone Superintendence, it was created to encourage research and development of new technologies based on the sustainable use of Amazonian biodiversity. There are currently 23 projects underway, involving research on natural fibers, microorganisms for bioremediation and waste treatment, among other topics.

Tax reform: The Chamber of Deputies has promoted debates on proposals for Tax Reforms that consider sustainable development measures in line with the 2030 Agenda. Parliamentarians and civil society entities have defended the implementation of principles to guide a sustainable tax system. Among the possibilities raised are: introduction of the concept of externality as a parameter for defining taxation; end of subsidies for highly carbon-emitting activities; creation of selective tax; carbon taxation; differentiated treatment to green activities; and creation of CIDE-Carbon.

In a statement during the Brazil 2021 Investment Forum, the Minister of Economy, Paulo Guedes, defended a tax reform that shifts the axis of tax exemptions to favor the development of the green economy in order to make the country the center of the bio-sustainable economy. It also invited international investors to invest resources in the country to develop the environmental economy.

foreign relations

Platform for the Biofuture: International initiative formed by Argentina, Brazil, Canada, China, Denmark, Egypt, United States, Philippines, Finland, France, India, Indonesia, Italy, Morocco, Mozambique, Netherlands, Paraguay, Sweden, United Kingdom and Uruguay.

It is a coalition of countries that emphasizes the role of bioenergy in the transition to a clean energy matrix and aims to promote the production, trade and global use of sustainable bioenergy through the development of analyses, policies, programs and projects. This contribution is made through international dialogue among decision makers regarding benefits, opportunities and priorities.

The Platform established Five Principles for the Recovery and Acceleration of the Post-COVID Bioeconomy: not going back on existing programs and guaranteeing the continuity, in the long term, of programs and systems for the production of biofuels and sustainable products; create incentive and/or financing programs to reduce, in the short term, economic losses in the biofuel production chain resulting from the pandemic; reassess the need to maintain subsidies on fossil fuels, taking into account the current drop in oil prices; integrate the sustainable bioeconomy sector into broader plans for economic recovery; and create mechanisms to encourage the sustainable production of biofuels, bioenergy and bio-products.

Main challenges

Fostering the bioeconomy could stimulate technological advances and innovation in an area of great potential for the country, promoting sustainable development and a low-carbon economy, improving Brazil's image abroad.

However, there are still fronts that need improvement for the topic to advance. Among them, there is the need to improve and update legislation, both for norms related to the use of biodiversity and for innovation and intellectual property.

Political coordination and the elaboration of a National Bioeconomy Plan are still needed, in addition to the modernization of the set of laws, decrees, regulations and norms in force that have an impact on specific sectors of the bioeconomy. Other points that should be improved are: labor qualification; facilitating access to resources for research and innovation; promotion of public-private partnerships; valuation of the country's environmental assets and services; mapping and promotion of production chains in the Brazilian bioeconomy; and improving infrastructure and logistics in the Amazon region.

Last Update: 06/17/2021

Prepared by Umbelino Lôbo Team: Gabriela Barbagalo, Isabella Puglisi and Jessica Coneza

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