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1、Seed of the future:Brazils agriculture fostering climate transitionJune 2023Authors:Arthur Ramos,Julien Imbert,Andr Pinto,Heitor Carrera,Ricardo Pierozzi,Lucas Moino,Thais EstevesBoston Consulting Group partners with leaders in business and society to tackle their most important challenges and captu
2、re their greatest opportunities.BCG was the pioneer in business strategy when it was founded in 1963.Today,we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow,build sustainable competitive advantage,and drive positi
3、ve societal impact.Organizations should combine digital and human resources to succeed.Our diverse,global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change.BCG delivers solutions through leading-edge management consulting amp
4、lified by technology,design,corporate and digital ventures.We work in a uniquely collaborative model across the firm and throughout all levels of the client organization,fueled by the goal of helping our clients thrive and enabling them to make the world a better place.BOSTON CONSULTING GROUP 1Execu
5、tive SummaryFor decades agribusiness has been a significant driver of growth in the Brazilian economy.It plays a critical role in the worlds value chain,feeding 10%”and delete exports of the worlds population1,according to Embrapa data.While it promotes development,agribusiness is a major source of
6、greenhouse gases(GHG),being directly responsible for 20%of Brazils emissions2.Moreover,historically,some sectors of the agricultural chain have contributed to deforestation,which accounts for 50%of the countrys total emissions.Therefore,it is essential to pursue effective solutions for minimizing en
7、vironmental impact and promoting sustainable practices.The same land use challenges that have led to an increase in emissions can represent a major opportunity in ensuring that the food chain has less impact on the environment,and in generating renewable energy and circularity to support the goal of
8、 reducing net carbon dioxide emissions to zero.3In this BCG report,we explore how agribusiness can maximize its potential to further boost its productivity while also becoming the central focus of the climate change agenda in making a decisive contribution to reducing greenhouse gas emissions(GHG)in
9、 the country.In summary,we will cover:Priority levers such as sustainable agriculture,carbon credits,nature-based solutions,and bioenergy identifying initiatives to materialize the main opportunities and the critical path to unleashing them.Business opportunities with estimated investment of over US
10、$100 billion that has the potential to prevent+1800 MtCO2e emissions by 2030.Enablers of the main opportunities,including regulatory environment,funding,and value chain engagement.Transforming challenge into opportunity:the potential to boost agricultural productivity and reduce emissions2 SOWING TH
11、E SEEDS OF FUTURE:AGRIBUSINESS AS A PILLAR OF CLIMATE TRANSITION IN BRAZILEmissions from Brazilian agribusiness represent 8%of global emissions in this sector,placing Brazil as the third largest emitter,behind only China and India.However,agribusiness is Brazils great economic driver contributing si
12、gnificantly to the worlds food supply.The sector represented 36%of Brazilian exports5 in 2022,and worth R$676 billion6,according to IBGE,equivalent to 7%of the national GDP.Looking ahead,the potential of Brazilian agribusiness remains high.World demand for food will increase around 30%by 2050,placin
13、g unprecedented challenges on the net zero agenda in agribusiness.Therefore,achieving scalable and sustainable agriculture is imperative.The strength of Brazilian agribusiness is a great advantage:local productivity is three times higher than average productivity in the rest of the world.Moreover,Br
14、azil has the fourth largest area suited for farming activities.Despite the clear advantages of Brazilian agribusiness,there is still a lot to be done to reach carbon neutrality,which would put the sector on an even stronger competitive position.There is an opportunity for Brazilian agribusiness to b
15、ecome a global powerhouse,while at the same time becoming a climate action booster,helping both the country and the world to reduce GHG emissions.Context and motivationsThe climate issue is urgent and demands our attention.Extreme climate events are becoming more frequent,and with increasingly sever
16、e consequences.The Paris Agreement,signed in 2015 by 196 countries,has established that every nation must reduce its GHG emissions,so the world average temperature does not exceed 1.5C more than pre-industrial temperatures.The goal is ambitious and,considering the minimal progress to date,the risk o
17、f missing the target is huge.If the world continues to follow existing practices,emissions and temperatures will continue to rise,(Picture 1),inducing serious natural disasters,and negatively impacting biodiversity,especially through forestry loss.The first step needed to keep temperatures at accept
18、able levels is enormous,requiring investment of between US$100 trillion and US$150 trillion over the next three decades,according to an estimate from the Climate Finance Markets,produced by BCG and GFMA(Global Financial Markets Association).4Brazil features among the ten biggest GHG emitters in the
19、world,but exhibits a key difference from other nations.While in most countries emissions are mainly due to energy generation(around 30%)and industry(around 20%),in Brazil nearly 50%of emissions arise through deforestation,while 20%comes from agriculture and livestock.Picture 1 The need to limit glob
20、al warmingNote:1.Carbon budget refers to the cumulative amount of C02 emissions allowed over a period of time to stay below a certain temperature.Source:Carbon Brief;Carbon Tracker;IEA;Reuters.BOSTON CONSULTING GROUP 3We see three main levers sustainable agriculture,carbon credits and nature-based s
21、olutions,and bioenergy broken down into 12 priority themes,as seen above(Picture 2).1.Sustainable AgricultureSustainable agriculture is a broad concept that encompasses a set of techniques that enable the best use of resources and the reduction of environmental and climate impacts while boosting pro
22、ductivity.Such techniques are already largely deployed in Brazilian agriculture.However,to expand their use,an investment of US$75 billion is needed by 2030,considering the necessary investments as detailed in each initiative below.1.1 No-tillage farming This method is already used across 60%of Braz
23、ilian territory,with potential to further expand.It consists of using seeding techniques that decrease the impact of machines on the soil and of maintaining the stubble from the previous crop,increasing productivity by about 20%and reducing emissions per hectare by around 1 tCO2e.Additional benefits
24、 include:the absorption of organic matter into the soil,which helps to better control soil erosion;increased levels of humidity and organic matter in the soil;and a reduction in capital investment in infrastructure and the workforce needed to operate tillage machinery.The process requires the soils
25、nutrition levels to be corrected,which,added to other initial adjustments,leads to an initial investment of approximately US$0.3 thousand per hectare.It should be noted that such figures vary significantly and have recently been hit by feedstock costs.Other challenges include the need for technical
26、support during initial implementation and the greater use of herbicides,which are not always available for small-scale rural producers.1.2 Irrigated systems Artificial soil irrigation is an efficient technique for boosting crop growth and productivity.This method,already used across almost 15%of the
27、 total agricultural area,is usually deployed with rice,sugar cane and coffee.It has the potential to increase productivity by up to 100%,increasing revenue and reducing emissions by about 3 tCO2e per hectare of production.Implementation requires investment in irrigation equipment and technical feasi
28、bility studies of the area concerned.Such investment may reach US$2,000 per hectare,with the amount varying according to the crop and irrigation technique to be used.Among the challenges to deploying this technique are the availability of water resources,which are poorly distributed across the count
29、ry,and the acquisition of modern and efficient machinery,which enable the most effective water usage.1.3.Biological nitrogen fixation This methodology method helps to control pests and improves soil health,reducing the need for fertilizers,and has a positive impact on productivity of up to 25%while
30、reducing GHG emissions by about 1.8 tCO2e per hectare.Currently,synthetic nitrogen fertilizers are often used,despite having a greater impact on the environment.Picture 2 Initiatives to reduce Brazilian agribusiness emissions in three leversDecarbonization opportunities for Brazilian agribusiness4 S
31、OWING THE SEEDS OF FUTURE:AGRIBUSINESS AS A PILLAR OF CLIMATE TRANSITION IN BRAZILTo enable their use,Brazil imports close to 85%of its nitrogen,phosphorus,and potassium,and is thus highly dependent on the external market.Consequently,in using the biological nitrogen fixation technique,and thus repl
32、acing chemical fertilizers with microorganisms,Brazil shall not only positively impact the environment but also reduce its vulnerability to external market movements.Initial investment in the technique is modest,covering,mostly,the inoculation of microorganisms.1.4.Degraded pastureland recovery In 2
33、021,this technique was already used in 18%8 of the Brazilian territory.The method centers on the re-establishment of forage production;maintaining the species or forage crop;increasing the density and quality of feed;and reducing costs by avoiding the deforestation of new areas for pasture.However,f
34、rom the moment a rancher decides to start applying this methodology,it takes two to three years before the cattle can graze effectively.This lead time,together with investment that can reach US$500 per hectare,depending on the degree of soil degradation,tends to discourage some producers from adopti
35、ng the technique.On the other hand,the benefits in terms of productivity and the reduction of GHG emissions are significant,reaching up to a 70%increase in productivity and a reduction of approximately 4 tCO2e per hectare.1.5.Integrated Systems Farming,Cattle Breeding,and Forestry Cultivation techni
36、ques that optimize soil use by integrating farming,cattle ranching,and forestry activities in the same area,whether through cooperation,succession,or rotation.Examples include simultaneous crop planting and a third harvest in some locations in Brazil.This technique enables increased profitability pe
37、r hectare,while contributing to the optimization of soil health.The benefits include increased productivity of approximately 65%,with additional revenue lines and a reduction in GHG emissions of up to 4 tCO2e per hectare.To make these benefits viable,an initial investment of up to US$6,000 per hecta
38、re is needed,used in introducing new crops and feasibility analyses.The ABC Plan played a significant role in addressing the main challenges to adopting such techniques,with special funding and knowledge sharing aimed at spreading this method among farmers with different profiles.Further techniques
39、incorporated in the ABC+Plan may present opportunities,especially for Brazilian cattle ranching,including:the Management of Animal Waste Products,which covers non-fecal waste,encouraging the use of by-products obtained,such as bioenergy and biofertilizers;BOSTON CONSULTING GROUP 5and intensive termi
40、nation,which consists of intensifying the feeding cycle during the final phase of cattle raising ahead of slaughter.Further positive externalities Changing the transport infrastructure for agricultural products especially grains could bring benefits not only for the climate,with an estimated 8%reduc
41、tion in emissions,but also in profitability,with a 26%decrease in transport costs.This change,foreseen in the National Logistics Plan 20359,presupposes the greater use of railways for transporting grain.Under the plan,highway use is expected to drop from 72%to 51%;while the use of railways will incr
42、ease from 20%to 42%Ever-evolving technology will also help farmers use fewer resources and reduce environmental impact.AgTechs and Biotechs will play a crucial role in further expanding adoption and innovation in agriculture.In summary,the potential of the sustainable agriculture initiatives describ
43、ed above to mitigate GHG emissions in Brazil could reach+200 M tCO2e by 2030,with the investment needed to unlock this potential being approximately US$75 billion,as shown in Picture 3.It is worth noting that the potential for reducing emissions is even greater when considering all the techniques in
44、 the ABC+Plan that include other additional initiatives,such as maintenance of the forestry,which we will describe below.Finally,such levers can lead not only to the reduction of emissions,but also to an increase in productivity,contributing to the expansion of the agricultural sector.2.Carbon credi
45、t and NBSThere is another lever that may be used in agribusiness in the search for a more sustainable model:exploring nature-based solutions(NBS)to ensure the conservation of biodiversity and the harnessing of new economic avenues,through carbon credits.The carbon credits market is an exchange and c
46、ompensation regulated tool instrument used among economic stakeholders to compensate emissions from several countries.For each ton not emitted or for each ton of carbon dioxide removed,a credit is generated.This way,when an industry uses a production technique with lower emissions or applies a metho
47、dology that enables the capture of emissions,it is possible to calculate how much was not emitted or removed and sell this amount as credit to organizations willing to reduce their emissions.2.1.Regulated Carbon Markets As the name suggests,there are legally binding emissions targets set by governme
48、nts for different economic sectors.To achieve their targets,companies in the same territory may trade credits among themselves.Companies with low emissions may sell additional credits to large emitters.Alternatively,companies may resort to nature-based solutions to acquire carbon credits and compens
49、ate for their emissions.2.2.Voluntary Carbon Markets In this model,corporations,governments,and individuals volunteer to compensate and/or neutralize their emissions by buying carbon credits.Credits are generated by projects that avoid,reduce,or remove GHG emissions,such as reforestation,improved fo
50、restry management,restoration of humid zones and Picture 3 Sustainable Agriculture Technique Impacts Summary Note:1.PLANO ABC+;EMBRAPA;Interviews with experts;BCG Analysis6 SOWING THE SEEDS OF FUTURE:AGRIBUSINESS AS A PILLAR OF CLIMATE TRANSITION IN BRAZILrenewable energy.Most of these follow rules
51、established by independent regulatory agencies.As of 2024,the demand for carbon credits will be higher than the offer,according to a BCG study in partnership with Shell10,which estimates that demand shall exceed 0.4 GtCO2e per year.This may present an opportunity for Brazil,since,by 2030,the country
52、 might represent 25%to 45%of the voluntary carbon market supply,mitigating between 1.5 billion and 2 billion tCO2e in carbon credits,mainly from credits generated by nature-based solutions.2.3.Avoided Deforestation,Aforestation and Reforestation The term nature-based solutions NBS is broadly defined
53、 and consists of“actions to protect,sustainably manage and restore natural or modified ecosystems,which address societys challenges effectively and adaptively,while providing benefits to human well-being and biodiversity.”Over the last 40 years,Brazil has devastated approximately 15%of its native ve
54、getation.Reversing this trend might lead to an annual mitigation of 0.6 to 1 GtCO2e,applying economically viable solutions(less than US$100 per tCO2e),placing Brazil as the number one nation in terms of potential to mitigate emissions on this front.Nature-based solutions are key to the global climat
55、e agenda and to the competitiveness of Brazilian agribusiness.The main contribution stems from reduction in deforestation and the restoration of degraded forests.By ensuring the conservation of forests,agribusiness,in addition to meeting global best practices and national and international regulatio
56、ns,mitigates the damage caused by deforestation,such as soil erosion.Some studies estimate that the Brazilian agriculture sector loses,on average,the equivalent of 1%of its gross annual production value,due to extreme climate events11.Finally,through natured-based solutions,agribusiness might also b
57、enefit from opportunities within the carbon market,with the potential to generate and sell carbon credits.Carbon credit market regulation is still under discussion and has a direct impact on the pricing of NBS projects.The expectation is that,by 2030,the value might reach US$100/ton.Depending on the
58、 actual figure,the return on investment for producers and investors may be significant,through forestry restoration and preservation projects,further boosting the climate agenda.Nature-based solutions can contribute not only to the generation of credits for agribusiness to enter carbon markets,but a
59、lso to the reduction of emissions via offsets(carbon offset compensation mechanisms),contributing to the climate transition of the agricultural sector.If the full potential of nature-use based solutions for carbon credit generation is captured,the estimated investment to boost this market is approxi
60、mately US$15 billion,including investment in expanding reforestation and conservation projects,leading to a reduction of up to 1.5 GtCO2e.This would ensure the conservation of biodiversity and the generation of economic value.As a reference,to preserve the Amazon Forest there is an annual cost of,at
61、 least,US$310 billion,according to a report released by the World Bank regarding the development in the Legal Amazon land area.BOSTON CONSULTING GROUP 7Thus,we see a huge opportunity for Brazil to lead the production of low-carbon energy,with a fundamental contribution to increasingly sustainable in
62、dustries.(Picture 4)In the bioenergy market,we highlight four14 main opportunities that should be explored in Brazil in the coming years,covering both first-and second-generation sources.3.1 Traditional biofuels(ethanol and biodiesel)Traditional biofuels,like ethanol and biodiesel,are already part o
63、f a mature and well-established ecosystem in Brazil,but with the growth opportunities.Ethanol production is expected to increase by 2.5%per year between 2022 and 2032,according to EPEs Ten-Year Energy Expansion Plan 203215,reaching 47 billion liters 80%from sugar cane).But to do so,will be necessary
64、 to overcome challenges,such as increasing barriers to its adoption arising from restrictions associated with crops that can be used for food purposes.In this context,second-generation ethanol,based on agricultural waste,emerges as an additional solution,as it increases productivity and mitigates fo
65、od security concerns.The production of second-generation ethanol is expected to reach 560 million liters per year by 2032,according to EPE.Picture 4 Brazil is developing an even greener energy matrix Note:Considering current policy scenarios and announced commitmentsSources:IEA World Energy Outlook
66、2022,BCG Analytics3.BioenergyBrazil is already a world reference in the production of clean energy,especially for its hydroelectric plants and biofuels.And,in recent years,bioenergy has been gaining more importance,including in exports,so that Brazil is now the second largest exporter of ethanol and
67、 biodiesel12.By 2023,Brazils Energy Research Company(EPE)projects that 42%of the energy matrix will be made up of renewable sources,placing Brazil in first place among large countries.There is already a large share of green energy in electricity generation,as 92%of the matrix already comes from rene
68、wable sources.13And the expectation is for the production of clean energy to continue to grow:between 2020 and 2040,the share of renewable sources(electricity and bioenergy)should grow 2.3%per year,while that of natural gas/other energy sources of fossil origin should reduce 1.6%per year.This growth
69、 will come from the evolution of low-carbon technologies,supported by government incentive programs such as RenovaBio,Metano Zero,Fuel of the future(Combustvel do Futuro),and others.Therefore,looking to 2040,in addition to an electricity grid that is nearly fully sustainable,Brazil has the potential
70、 to achieve up to 70%of its total energy matrix from low-carbon sources.On this same time horizon,for the rest of the world,the share of renewables will be less than 40%,despite all the global efforts to reduce emissions in the energy sector.8 SOWING THE SEEDS OF FUTURE:AGRIBUSINESS AS A PILLAR OF C
71、LIMATE TRANSITION IN BRAZILPicture 5 Four opportunities for the Brazilian bioenergy marketNote:Estimated investments based on opportunity for additional production capacity.Does not include logistics and transport.Source:BCG AnalysisI In addition,there is potential for growth in biodiesel,blended in
72、to fossil fuel(gasoline/diesel)to reduce carbon emissions.The policy of the National Energy Policy Council is for the percentage of biodiesel blending to grow from 12%to 15%by 2026.3.2 Drop-in alternatives to substitute fossil diesel and jet fuel16 SAF and HVO are alternative biofuels produced from
73、vegetables oils,animal fats,used cooking oil,among other renewable sources,that directly replace fossil diesel in industrial use,sea and road transportation,and aviation,among others.Recently,some important projects have been announced.BBF Group has signed a partnership with Vibra Energia to invest
74、R$1.8 billion in a biorefinery at the Free Economic Zone of Manaus to produce HVO from palm oil;operations are expected to start in 2025.Acelen has signed an investment memorandum for a R$12 billion-biorefinery at Mataripe plant,in the state of Bahia,to produce HVO/SAF,beginning in 2026.Finally,Petr
75、obras estimates R$3.1 billion in investment for a new HVO plant,with operations starting in 2028.Investments of such significance might boost the sector growth,which,according to our studies,may lead to HVO production of approximately 2.8 billion liters per year,and SAF production of 0.2 billion lit
76、ers per year.3.3 Biogas and biomethane Biogas is produced from the use of agricultural waste,animal residues,and other urban/industrial organic waste.Biomethane is derived from upgrading of biogas and can directly replace natural gas of fossil origin in industrial processes and transportation(drop-i
77、n concept).It can also replace diesel in trucks and be used in producing heat for industry,as well as serving as a raw material for producing ammonia or other chemicals.Brazil also has great potential to improve urban waste collection,through landfills producing biomethane.Moreover,there is enormous
78、 potential to use by-products from confined animal farming,and from vinasse and filter cake in sugar mills,to produce a large volume of biomethane in the interior of the country.According to the Brazilian Biogas Association(ABiogs),Brazilian biomethane production has the potential to jump from less
79、than 2M m3/day in 2023 to about 30M m3/day in 2030.3.4 Residual Biomass Biomass waste is generated from the remains of various agricultural products,such as pine bark,coconut shell and straw.They are processed into pellets,a kind of cylindrical wafer,which can replace coal in power plants without th
80、e need for investment in equipment and with the advantage of being cleaner in terms of carbon intensity.This also offers export opportunities to other regions,where the use of fossil coal is large and should be reduced.For example,Europe accounted for 83%of the global pellet market in 2021,reinforci
81、ng this potential.From 2022 to 2032,it is estimated that the volume of sales on Europe will grow by approximately 9%per year17.We estimate that,in Brazil,the production of this energy source can reach from 6 to 12 million tons per year by the end of this decade.We see bioenergy as a sector in which
82、Brazilian agribusiness can be the protagonist and serve new markets,contributing to the decarbonization of other sectors of the Brazilian and world economy.In total,the four main opportunities listed above have the potential to mitigate 100 MtCO2e by 2030 and drive investments of US$25 billion.(Pict
83、ure 5)BOSTON CONSULTING GROUP 9But for an agenda with more than$100 billion in investment needed by 2030,just for the levers detailed in this study,there is vast potential for both the government and financial institutions to target programs that encourage the reduction of the sectors carbon footpri
84、nt.In this regard,there is broad scope to encourage capital allocation aligned to decarbonization goals,as already seen in other countries where these goals are reflected in public policies,such as the IRA(Inflation Reduction Act)in the USA and the EU Green Industrial Plan in the European Union.One
85、of the main barriers to financing the climate transition is the fragmentation and complexity of the supply chain.Financial institutions can contribute by promoting broad transparency;developing products for financing activities that contribute to the climate agenda;supporting entities committed to t
86、he transition;and promoting the gradual divestment of high-emission activities.Supply chain engagement and collaboration Finally,engagement of stakeholders is fundamental in advancing the agenda.The government has a key role in setting public policies,however sectorial associations and agencies have
87、 an important role in teaming up with the private sector in developing and promoting an agenda,and in anticipating consumer needs and regulatory pressures.To this end,the traceability of products to ensure that raw materials are produced sustainably is critical.Agricultural producers have a unique w
88、indow of opportunity to further leverage Brazils already mature emissions mitigation solutions and to promote the reduction emissions on their properties.In addition,companies providing solutions for the agricultural sector can develop more sustainable alternatives.For example,the use of biomethane
89、or green hydrogen can be an important lever in boosting supplies for the nitrogen fertilizer sector(which currently depends more than 80%on imports),with a low emissions configuration.In a new global scenario with ever-greater pressure to advance the climate agenda,coordination between different lin
90、ks of the chain is critical.Brazilian agribusiness must act to maintain its competitiveness and pioneering spirit,thus cementing its leading position in new markets promoting nature-based solutions,championing transparency and a proactive agenda aligned to a role of global leadership.The enablers fo
91、r agribusiness in the climate agendaRegulation For innovations to become a reality and emissions reduction to be effective,the regulatory environment needs to provide changes to stimulate investment,export,and the consumption of low-carbon energy sources.Looking at the global regulatory landscape,re
92、gulatory advances are already impacting the agricultural sector in other countries.For example,in the most developed countries,regulated carbon markets already cover approximately 20%of global emissions.Other tools,such as the CBAM(Carbon Border Adjustment Mechanism)adopted by the European Union,est
93、ablish levies on imported products according to their emissions,to preserve the competitiveness of local products(already impacted by the carbon tax or cap and trade).In addition,the FERC(Forest and ecosystem-risk commodities),a policy aimed at restricting the importation of goods related to defores
94、tation or the violation of the rights of indigenous peoples,will place significant challenges on the placement of Brazilian agribusiness goods in the European market.This scenario reinforces the importance of proactive action by the Brazilian public and private sectors in shaping the local regulator
95、y agenda and anticipating actions that mitigate risks to the supply of Brazilian products in the global market.Brazil possesses initiatives and mechanisms,such as designated preserved areas for protecting standing forest,the implementation of even more ambitious targets for ABC+Plan,and RenovaBio,fo
96、r promoting bioenergy.Moreover,the country has already established a national decarbonization commitment(NDC),with targets and listing industry sectors that will have to articulate plans for fulfilling such ambitions.However,it needs greater consistency to position itself on the worlds edge in the c
97、limate agenda.In addition to carbon market regulation(under discussion at the National Congress),there are important steps needed to unlock incentives to promote the bioeconomy(such as jurisdictional REDD+).To go further,it is also necessary to break down NDC into clear,tangible targets for each sec
98、tor and to collaborate with other countries,to ensure a global taxonomy(such as common regulation of credit credibility from Article 6,under discussion since COP26)that incorporates Brazilian particularities.Funding The provision of financial resources will play a critical role in enabling the reduc
99、tion of GHG emissions in various sectors,but particularly in the agricultural sector.Several mechanisms,such as the Safra Plan,already provide an important starting point,signaling growing ambition to push the climate agenda.10 SOWING THE SEEDS OF FUTURE:AGRIBUSINESS AS A PILLAR OF CLIMATE TRANSITIO
100、N IN BRAZIL This study emphasizes agribusiness fundamental role in the Brazilian economy and how it can be leveraged to drive the climate agenda by pursuing a path of low emissions.1.Agriculture sectors leading role is anchored in three pillars:acting proactively to preserve the forest and biodivers
101、ity,respecting global best practices,and joining the carbon credit market,coupled with nature-based solutions and emissions reduction.2.Empowering new sustainable ways of production and farming,such as no-tillage farming and irrigation.3.Increasing the production of bioenergy from the use of first-a
102、nd second-generation biomass.These pillars differ from each other on the aspects of maturity,clarity of the investments profitability and the need of incentives to enable opportunities.Land use solutions,covering Brazils vast standing forest area and the importance of reducing the impact of deforest
103、ation,represent the greatest potential for reducing emissions,at almost 1,500 MtCO2e by 2030,an amount equivalent to 83%of all the AFOLU emissions Brazil reported in 2021(which represents about 80%of all Brazils emissions in 2021).Unlocking such an opportunity,ensuring its economic feasibility,and r
104、educing uncertainties related to the carbon market,could lead the Brazilian agriculture sector beyond neutrality,compensating for more than the emissions generated from its own activities.Next comes sustainable agriculture,which is more mature from an economic standpoint due to advantages related no
105、t only to emissions reduction but also to an increase in productivity To expand,it is necessary to enable funding solutions and to incentivize farmers.Finally,bioenergy has significant potential to reduce emissions and to provide new growth opportunities for the Brazilian agribusiness.However,it alr
106、eady benefits from mature initiatives and has the potential to explore further emissions reduction within the transportation,industry and energy generation sectors.The importance of this agenda is illustrated by its potential to reduce+1,800 MtCO2e in emissions,with investment estimated at over US$1
107、00 billion,as shown in the figure below.(Picture 6)To achieve an economic model that is less harmful to the environment,every sector needs to undergo change.However,agribusiness supply chain faces a unique opportunity to gain recognition as an increasingly thriving and sustainable sector.Picture 6 I
108、nvestments and mitigation of potential emissions between 2023 and 2030 in sustainable agriculture,bioenergy,and carbon creditSource:Interviews and BCG AnalysisThe potential to pursue growth and low emissionsBOSTON CONSULTING GROUP 1112 SOWING THE SEEDS OF FUTURE:AGRIBUSINESS AS A PILLAR OF CLIMATE T
109、RANSITION IN BRAZILAuthors Arthur Ramos Managing Director and Partner at BCG and leader of BCGs Climate&Sustainability practice in Brazil.He has more than 25 years of experience in projects executed in several areas,especially energy and infrastructure.You can contact him by email at Andr Pinto Mana
110、ging Director and Senior Partner at BCG and leading the Energy practice in Brazil.He has more than 15 years of experience in strategic consulting focused on electricity,fuels including biofuels and agribusiness.You can contact him by email at Thais Esteves Project Leader at BCG and a member of the C
111、limate&Sustainability,Agriculture and Social Impact practices.You can contact her at Julien Imbert Managing Director and Partner at BCG.He has more than 17 years of experience in strategic consulting with projects in the agribusiness area executed in Brazil and abroad.You can contact him by email at
112、 Ricardo Pierozzi Managing Director and Partner at BCG and a member of the Energy and Climate&Sustainability practices,working especially on issues related to bioenergy.You can contact him by email at Heitor Carrera Managing Director&Senior Partner at BCG.He has more than 30 years of professional ex
113、perience with projects executed in Brazil and abroad in several areas,including agribusiness.You can contact him by email at Lucas Moino Partner at BCG and a member of the industrial goods practice,leading the agriculture and corporate venturing verticals in Brazil.He has 17 years of professional ex
114、perience.You can contact him by email at The authors would like to thank the contributions of Bruna Mascotte,Eduardo Assad,Julio Natalense,Leonardo Molan,Leonardo Munhoz,Pedro Barros,Roberto Frana and Tamara Fain.AcknowledgmentsFootnotes1-https:/www.embrapa.br/busca-de-noticias/-/noticia/59784047/o-
115、agro-brasileiro-alimenta-800-milhoes-de-pessoas-diz-estudo-da-embrapa|2-https:/climatetrace.org|3-Net Zero o compromisso de reduzir as emisses de gases de efeito estufa para o mais prximo possvel de zero.O com-promisso assumido no Acordo de Paris atingir esta meta at 2050|4-https:/www.sifma.org/wp-c
116、ontent/uploads/2020/12/Climate-Finance-Mar-kets-and-the-Real-Economy.pdf|5-https:/www.gov.br/economia/pt-br/assuntos/noticias/2023/janeiro/Balanca2022.pdf|6-https:/agenciadenoticias.ibge.gov.br/agencia-sala-de-imprensa/2013-agencia-de-noticias/releases/36371-pib-cresce-2-9-em-2022-e-fecha-o-ano-em-r
117、-9-9-trilhoes|7-https:/www.gov.br/agricultura/pt-br/assuntos/sustentabilidade/plano-abc/plano-abc-agricultura-de-baixa-emissao-de-carbono|8-UFG-Lapig,MapBiomas,Embrapa|9-https:/www.gov.br/infraestrutura/pt-br/assuntos/politica-e-planejamento/copy_of_planejamento-de-transportes/pnl-2035|10-https:/ al
118、.2017.“Agricultural Market Insurance Development:Policy Note Brazil.”Policy Note.Washington,DC:Banco Mundial.http:/ com potencial tangvel,aguardando novas tecnologias e solues|15-https:/www.epe.gov.br/pt/pub-licacoes-dados-abertos/publicacoes/plano-decenal-de-expansao-de-energia-2032|16-leo vegetal
119、hidrotratado|17-Future Market Insights:https:/ Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it was founded in 1963.Today,we help clients with total trans
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