A study by PriceWaterhouseCoopers and Brazil’s Development Ministry finds very few Brazilian carbon credit projects have left the drawing board despite Brazil’s potential for such credits.
“There’s a lack of interaction with the environmental areas in the companies,” PriceWaterhouseCoopers’ Rogerio Gollo said. “People still think that it’s a romantic idea, when in reality it has already become a business.”
The main reasons for companies’ failure to take advantage of carbon credits were the lack of broader discussion of the subject within companies and the lack of technical understanding of how the system works, as well as the cost of implementing a program that is often considered expensive.
Gollo said Brazil had great potential for generating credits, with the vast hydroelectric generation and biofuels programs in its energy matrix. More than 90 percent of its electric energy comes from hydroelectric projects and about 40 percent of all non-diesel fuel consumed by motorists is cane-based ethanol.
The study said projects that were already in place in Brazil were reducing the equivalent of 184 million tons of greenhouse gases a year. If commercialized, that could generate revenues of US$133 million, it added.
There are two principal ways to earn carbon credits: the substitution of fossil fuels in operations already in place and the implementation of new projects that generate clean energy that would otherwise come from fossil fuels.
The company must calculate how much greenhouse gas emissions it is eliminating and get accredited by the Brazilian government and the United Nations to qualify for the credits.
The study involved 163 companies, banks, and associations, of which 70 percent have annual revenues of more than 200 million reais (US$92 million).