Brazil’s Petrobras, BNDES sign carbon credit deal

Brazil’s federal oil firm Petrobras and development bank BNDES have signed a protocol of intent to contract carbon credits generated from forest restoration in the Amazon rainforest.

Called ProFloresta+, the program will promote the restoration of up to 50,000ha of degraded areas in the region, capturing around 15Mt of carbon. 

The initial phase includes a call for tenders for up to 5mn carbon credits, covering 15,000ha, which will generate investments of more than 450mn reais (US$78.4mn) in restoration alone, as well as 4,500 jobs.

A market consultation was opened on Monday so that interested parties can contribute to the draft of the first public notice and the first carbon purchase contract. 

“This is a very important initiative for Petrobras and for Brazil. It will enable us to meet our climate commitments with carbon credits of high quality and integrity and, at the same time, foster the development of the restoration sector in the country,” Petrobras CEO Magda Chambriard said in a statement.

BNDES president Aloizio Mercadante said that the program will contribute to scaling up the restoration of the Amazon rainforest and the decarbonization strategies of Brazilian companies. 

“With the initiative, we will transform forest restoration and maintenance, making them profitable for companies, for local communities and, above all, for the environment, combining the country’s environmental and climate demands,” said Mercadante. 

BNDES will offer financing for reforestation to the developers of these projects through special credit lines, such as the Climate Fund, with rates and terms suitable for restoration projects.

Context

Initially, the project will take place in the voluntary carbon credit market, since the functioning of the regulated environment relies on the implementation of greenhouse gas emissions trading system SBCE in the next six years. 

This information was confirmed to BNamericas by the Petrobras’ energy transition head Maurício Tolmsaquim. 

In a recent interview with BNamericas, Luiz Bezerra, a partner at law firm Tauil & Chequer, said that the government is studying the possibility of creating an executive secretariat to regulate the market in the country. 

One of the main initiatives underway in Brazil is RenovaBio, the national biofuels policy, which establishes the compulsory purchase by fuel distributors of decarbonization credits, so-called CBIOs.  

CBIOs are environmental assets issued by biofuel producers in an amount proportional to the efficiency score of their certified production and the volume of biofuel sold. 

One CBIO is equivalent to 1t of greenhouse gases not emitted due to the use of biofuels to replace fossil fuels.

In 2024, by issuing 42.4mn CBIO credits, the same equivalent amount would no longer be emitted into the atmosphere, generating 3.9bn reais in financial value.

RenovaBio’s target for 2025 will be 40.4mn CBIOs, which means a reduction of 40.4Mt of carbon dioxide equivalent in the atmosphere. 

Other Petrobras actions

Petrobras’ business plan foresees US$16.3bn for energy transition projects. In addition to low carbon energy projects, it includes projects to decarbonize operations and research and development, which permeates all segments (oil and gas exploration and production, refining). 

Besides biofuels, green hydrogen and renewable energy generation projects under study or in operation, Petrobras avoids the emission of significant greenhouse gas volumes by reinjecting CO2 in its oil and gas fields. 

Last week, the company announced that it reinjected 14.2Mt of CO2 into the pre-salt reservoirs of the Santos basin last year, compared to 13Mt in 2023. 

According to Petrobras, the reinjected volume corresponds to 28% of the global capacity reported for 2024.