Brazil set to certify its biogas amid expansion plans [Gas in Transition]

The International REC Standard Foundation, a non-profit organisation formed to provide reliable standards for renewable energy certificates, said on May 22 that it had signed a memorandum of understanding (MoU) with a multi-national consortium including Instituto Totum, Brazil’s national environmental certification agency, to develop a new standard for biogas and biomethane consumption.

In a statement, I-REC Standard said the MoU outlined plans for working with the consortium – which also includes Evident, a UK-based clean energy certifier, and US-based M-RETS, the largest voluntary registry of renewable energy certificates (RECs) in North America – to develop a biogas and biomethane product code. This code, which will be known as I-REC(G), will comply with all the requirements included in I-REC Standard’s International Attribute Tracking Standard, the statement said.

I-REC Standard did not say exactly when it would begin work on the I-REC(G) code or how much time the parties might need to complete the process. However, Argus Media had reported separately on May 17 that the organisation was expected to roll out the new biogas/biomethane code in Brazil later this year. I-REC(G) is likely to secure Brazilian accreditation by the end of 2023, it said, followed by accreditation in the US in the first half of 2024 and then in at least one more country in the second half of the same year, it said.

Expansion ahead

The foundation’s announcement is good news for Brazil, in light of expectations that the South American state’s biomethane sector is heading for a major expansion.

Brazil currently turns out 5mn m3/year of biomethane, equivalent to around 360,000 m3/day, according to data from Abiogas, a trade association representing the country’s biogas producers. Abiogas believes this number has the potential to skyrocket, rising all the way to 121mn m3/d within the next few decades. (This would represent a more than 24-fold increase.)

Fernando Giachini Lopes, the CEO of Instituto Totum, told BNamericas in February of this year that this upswing was being driven by the Brazilian sugar-alcohol industry’s growing interest in biomethane and biogas. This development is relatively new, he said in an interview, as until recently, most of Brazil’s biogas and biomethane projects were outgrowths of livestock and pig farming, in which small-scale animal husbandry operations used the gases they generated for distributed energy generation. Now, though, Brazilian sugar-alcohol producers are making use of vinasse – the liquid that is the final by-product of sugar and ethanol manufacturing – as biogas/biomethane feedstock, he explained. And since the sugar-alcohol sector is so large, the companies involved have large volumes of vinasse and can produce enough biogas/biomethane to supply industrial consumers.

Thus, Brazil’s sugar-alcohol industry, together with landfills, has already become a source of renewable fuel for large-scale consumers that buy gas on much larger scales than small farming operations. And if it lives up to its potential, as Abiogas expects, it will become an even larger and more important source of fuel for Brazilian business and industry.

Lopes pointed out, though, that as production rose, buyers would need more than just increased supplies. They will also need to be able to prove that they are using gas from renewable sources instead of fossil fuels in order to uphold their emissions reduction commitments, he said.

The new IREC Standard code is designed to enable them to meet that need, while also serving as a globally recognized standard for certifying biogas/biomethane use.

Addressing challenges

What’s more, I-REC(G) is likely to address certain challenges facing Brazil’s biogas/biomethane sector.

One of these challenges is the lack of standardisation within Brazil itself. Argus Media noted in early May that the South American country had yet to evolve a unified standard for certifying consumption of renewable gas. Instead, it said, multiple producers have been rolling out their own certifications – and since none of these competing certifications match each other exactly, consumers are sure to have a harder time proving the extent to which their purchases of biogas and biomethane are actually in line with their emissions reduction goals. But the I-REC(G) code will resolve the challenge by serving as the single standard for the entire country.

A related challenge is the gap between Brazilian standards and global standards. Gabriel Kropsch, the vice president of Abiogas, told Argus Media in early May that this was a particular problem for multinational companies operating in Brazil, since those firms were committed to meeting global standards. If the consumers in question cannot certify their renewable gas consumption in line with global standards, he explained, their Brazilian documentation will not have much real value. (This is not a theoretical issue, given that the first company to sign a deal for gas-related RECs in Brazil was Heineken, based in the Netherlands.) But as I-REC Standard explained in its May 22 statement, the new code will resolve this challenge because it will “adhere to the strict requirements of the I-REC Standard’s International Attribute Tracking Standard.”

I-REC(G) may even serve to resolve a tricky point that Argus Media highlighted in early May. It noted that participants in Brazil’s renewable gas market had recently objected to a move by Greenhouse Gas Protocol (GHGP), a voluntary emissions reporting framework, to update its guidance on standards for issuance of RECs. The Brazilian players have complained particularly about GHGP’s stipulation that only physical deliveries of biogas/biomethane may now be counted toward net-zero emissions goals. They say this standard presents problems in Brazil, where “book and claim” operations involving pipelines are common.

Abiogas, one of the critics, has gone further, pointing out that the I-REC Standard issues RECs for electricity on the basis of “book and claim” operations. Lopes also made a case for the existing system in February, saying that pipelines were the best option for biogas/biomethane in Brazil since the alternative would be to deliver the gas using trucks that burned diesel fuel.

But I-REC Standard’s statement hints that the parties may be on their way to hammering out an agreement. It does not mention “book and claim” arrangements specifically, but it does indicate that the new code will take a neutral stance on delivery methods. “The goal of the I-REC(G) Product Code is to develop a standardised tracking methodology that is fact-based, ex-post and technology-agnostic, which would serve as the basis for a certificate instrument for [consuming] biogas and biomethane,” it said. “This mechanism will support organisations’ claims for biogas or biomethane usage, including that of low or net zero-carbon products.”

As of press time, I-REC Standard and the consortium were still at the MoU stage and had not said when they expected to sign a final agreement on certification for renewable gas consumption. However, the parties do appear to be making good progress toward a deal. As such, assuming that recent media reports are reliable, they should be in a position to establish a new standard for the Brazilian biogas/biomethane market by the end of the year – well in advance of the anticipated uptick in production.