1、Infrastructure planning to deliver the climate transition in BrazilInfrastructure Forum The pathway to infrastructuresustainabilitySep/2022Secretary for Infrastructure DevelopmentSDI/SEPEC/Ministry of EconomyMINISTRY OF ECONOMY“The future is green and digital”Theses words represent two important dri

2、vers of the Brazilian infrastructure planning process.Climate change and ESG goals are part of societys set of concerns,which affect firms and governments decisions.By acknowledging that these will be constant factors in international relations,trade,production technologies,economic and social resil

3、ience,etc.,infrastructure policies and outcomes must also go in this direction.2019 CONTEXT2019 CONTEXTSeveral statistics pointed to a strong gap between optimal and actualinfrastructure investments andcapital stock.Important fiscal constraints of the public sector at the federal,state andmunicipal

4、levels.Regulatory barriers to competition and private entrepreneurship in manysectors.Needofimprovementsinthe decision processofpublicbudgetaryallocation.Brazillian action plan has been based on four pillarsRegulatoryReformsGovernanceTransparencyand MonitoringFinancial mechanismsDecree 10526/2020 cr

5、eates Interministerial Committee for Infrastructure Planning to foster better governance practices for infrastructure investmentINFRASTRUCTURE GOVERNANCE REFORMINFRASTRUCTURE GOVERNANCE REFORMCapacity building programmes to disseminate best practices and accelerate the development of better investme

6、nt projects.Integrated Long Term Infrastructure Plan to harmonize existing plans from different sectors and require social-economic valuation for large-scale projectsDissemination of standardized methods for project preparation(Five Case Model Guidance),ex ante valuation(CBA Guide),and ex post valua

7、tions.Standardized methodologies for structuring projects aligned with international references for environmental and social assessmentsINVESTMENT MONITORINVESTMENT MONITORThe Investment Monitor is a hub of information about investments and sustainability in Brazil that aims to facilitate access to

8、relevant data and promote interaction between government,investors,academia,multilaterals and the civil society.PARTNERSHIPS IN THE DESIGN OF THE INVESTIMENT MONITORPARTNERSHIPS IN THE DESIGN OF THE INVESTIMENT MONITORINVESTMENT MONITORINVESTMENT MONITORPROJECTS PANEL PROJECTS PANEL-PIPELINEPIPELINE

9、RoadsSanitationPortsSecurityEducationElectric EnergyAirportsUrban terminalsRailroadsFishing terminalsCommunicationMuseumsWaterWaterwayData processingMiningParksSolid wasteReal StateMetro/TramsFood supplyPublic HealthOil&GasPublic lighting+USD 180bi+USD 180biEstimated CAPEX of the investments project

10、s auctioned or authorized by the Federal Government since 2019PROJECTS PANEL PROJECTS PANEL -INVESTMENTSINVESTMENTSPROJECTS PANEL PROJECTS PANEL SUSTAINABILITY REFERENCESSUSTAINABILITY REFERENCESPROJECTS PANEL PROJECTS PANEL FRAMEWORK FOR SUSTAINABLE INFRASTRUCTUREFRAMEWORK FOR SUSTAINABLE INFRASTRU

11、CTUREDimensions4Phases4Atributes49Maturity levels(tiers)3PROJECTS PANEL PROJECTS PANEL FRAMEWORK FOR FRAMEWORK FOR SUSTAINABLE INFRASTRUCTURESUSTAINABLE INFRASTRUCTURESOCIAL Poverty,Social Impact andEngagement withCommunities Human and Labor Rights Cultural PreservationENVIROMENTAL Climate andnatura

12、l disasters Preservation ofnatural environment Pollution Efficient use ofresourcesGOVERNANCE Alignment withGlobal andNationalStrategies Governance andSystemic Chance EffetiveManagement Systems andAccountability Capacity BuildingECONOMIC AND FINANCIAL Financial sustainability Policy attributes Econom

13、ic returnwww.gov.br/investimentosannual total(2019)Mton CO2CO2 EMISSION CO2 EMISSION ENERGY SUBSECTORENERGY SUBSECTORworld=4,9OCDEEuropean UnionBrazilG20per capita(2019)t CO2/hab9,22,16,16,112.03004512.73030.790world=100%=37.640https:/www.climatewatchdata.org/ghg-emissionstotal cumulative(1990-2019)

14、Gton CO2377,9610,5197,98759,18world=100%=899,62G20European UnionOCDEBrazilBrazil current status is equivalent to the European transition goalhttps:/energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-targets-and-rules/renewable-energy-targets_enRENEWABLE ENERGYRENEWABLE ENERGY45%R

15、EPowerEU Plan 2022(2030)11.50%14.10%44.70%RENEWABLE(TOTAL ENERGY)Brazil(2021)World(2019)OECD(2019)https:/www.epe.gov.br/pt/publicacoes-dados-abertos/publicacoes/balanco-energetico-nacional-202230.80%26.60%83.80%RENEWABLE(ELETRICITY)Brazil(2021)World(2019)OECD(2019)https:/www.epe.gov.br/pt/publicacoe

16、s-dados-abertos/publicacoes/balanco-energetico-nacional-2022EUROPEAN COMMISSION TARGETCLEAN ENERGY TRANSITION:CLEAN ENERGY TRANSITION:National Biofuels Policy-RenovabioSince 2017 Brazil has a regulated market of biofuels certificates.The goal is to reduce greenhouse gases emissions in the fuel secto

17、r.Supplyside:Biofuelproducersvoluntarilycertify their production and receive,as a result,energy-environmental efficiency scores.Thesescores are multiplied by the volume of biofuelsold,whichresultsintheamountofDecarbonization Credits(CBIOs)that a givenproducer can issue and sell on the market.Demand

18、side:Annually,the Government setsnational targets for ten years ahead,which arebrokendownintomandatoryindividualtargets for each fuel distributor.CBIO volumes traded:2020-14.9 million/US$0.13 billion2021-29.8 million/US$0.22 billion2022 36 million(goal)Each CBIO is equivalent to 1 ton ofavoidedCO2eq

19、 emissions.CLEAN ENERGY TRANSITION:CLEAN ENERGY TRANSITION:Distributed Micro and Mini Generation(DMMG)New Regulatory Framework(Law 14300/2022)maintains tariff subsidies for those units that requested grants before Mar/2022.DMMG Installed Capacity Forecast(GW)Scenario:Business as Usual(end of subside

20、s in 2020)Scenario:with subsides DMMG4.6%of the total energy supply3.2%of the total energy supplyCLEAN ENERGY TRANSITION:CLEAN ENERGY TRANSITION:Green HydrogenBrazil has the potential to be the largest export hub,given its endowments to develop wind and solar energy projects.Potential wind power cap

21、acity 10,000 GW Potential solar power capacity 300 GWp(only best areas)Investmentsintheproductionofgreenhydrogen from ethanol in the vehicle itself arealso noteworthy.Ethanol would be a sort ofliquid hydrogen,not requiring major changesto the distribution infrastructure.Electric vehicle powered by a

22、Solid Oxide Fuel Cell(SOFC)which generates energy fromtheuseofbioethanol.TheJapanesecompanyNISSANhas signed a new agreementwith the Brazilian Institute forEnergy and Nuclear Research(IPEN)toresearchfueltechnologiesformodelspoweredbyhydrogenandethanol combined.CLEAN ENERGY TRANSITION:CLEAN ENERGY TRA

23、NSITION:Green HydrogenProductionOthersFuel CellsPurificationStoragePurification Combustion Engine HydrogenMethodology,Standard,CodesSegmentation of Hydrogen R&D projects in BrazilCearastate government,Federation of Industries of the State of Cear(FIEC),the FederalUniversityofCear(UFC)andthePortodoPe

24、cmComplexsignedinFeb/2021amemorandum to build a hub for hydrogen in the Port of Pecm,with the purpose ofexporting the green hydrogen and also use in Brazil.State government also signed a memorandum with the Australian company Enegix,whichintends to install a plant for the production of green hydroge

25、n,with planned investments ofUS$5.4 billion,including a construction of an electrolysis plant.PROJECTS IN BRAZIL:PROJECTS IN BRAZIL:Hydrogenhttps:/www.epe.gov.br/sites-pt/publicacoes-dados-abertos/publicacoes/Documents/PDE%202031_RevisaoPosCP_rvFinal_v2.pdf p366Decree 10946/2022 allowedthe allocatio

26、n of maritimeareastoprivatesectorprojectsonwindenergyand other sources.CLEAN ENERGY TRANSITION:CLEAN ENERGY TRANSITION:Battery Energy Storage Systems(BESS)Brazil has improved its regulation in order to allow for the insertion of BESSs in generation,transmission and distribution,allowing an increase

27、in operational efficiency and reduction incosts.In implementation,the first BESS in the country,using lithium batteries,with a power of30MW.Illustrative image of the storage system(ISA CTEEP),30 MW.PROJECTS PANEL PROJECTS PANEL-RAILROADSRAILROADSRailroadsGoal Metrics:Estimative authorization of+8,00

28、0 km of new rail projects with low GHG emissions and low ecological footprint by 2032.The modal shift from roads to railways promotes a reduction of up to 85%of GHG emissions considering diesel-propulsion for the same load unit.If the option considers electro-propulsion,the emissions are close to ze

29、ro.Goals:Toreducegreenhousegasesemissionbyswitchinglogistics from trucks to trains;in addition,the gradualadoptionoflowcarbonenergysourcesisexpected:biodiesel,electric,green hydrogen,etc.TheNewLegalFrameworkforRailways(Law14273/2021)allowedauthorizationsforinvestorstobuildtheir own railways,with pri

30、vate capitaland little regulation.The long-distance transport matrix willmigratefromtruckstotrain.Thegreaterenergyefficiencyoftrainscompared to trucks will allow Brazil tohaveamorecompetitiveandsustainable economy the same time.WATER SUPPLY AND SANITATIONWATER SUPPLY AND SANITATIONConcession of wate

31、r supply and sanitationservices,by groups of Municipalities in theState of Rio de JaneiroGrant Amount(US$4,883.3 MM)EstimatedInvestments(US$6,679.6 MM)35 yearsTotal Population(13.6 MM)Federal Law n.14026/2020Targets:by 2033,increase of safe andaffordable drinking water service from85%to 99%of popula

32、tion and adequatesanitation(sewagecollectionandtreatment)from33%to90%ofpopulation.EmpowermentoftheNationalWater and Sanitation AgencyIncreaseprivateparticipationininfrastructureSupportfromthefederalgovernment to municipalities in designofcontractsandthebiddingdocuments.Foto:Reproduo InternetFicha de

33、 sustentabilidade Federal Law n.14.260/2021Creates economic instruments to stimulate individuals and firms to recycle.Income tax discounts and authorized the formation of investment funds to support recycling projects(ProRecicle).Executive Orders(Federal Decrees)n.10.240/2020 and 10.388/2020Creates

34、the reverse logistics system for electronics(implemented in the 27 state capitals of Brazil)and expired medicines.33 billion aluminum cans recycled in 2021(98.7%=a new world record).53.5 thousand tons of packaging recovered in 2021(94%=new record)566 million liters of lubricating oil recycled in 202

35、1(new record)Executive Order(Federal Decree)n.11.043/2022Institutes the National Solid Waste Plan(Planares),important instrument to materialize the National Solid Waste Policy,expected for over a decade.+750 dumps closed since 2019(23%reduction)Goal 100%closed by 2024 Executive Order(Federal Decree)

36、n.11.044/2022Creates the“Recycling Credit Certificate”(Recicla+),to provide the injection of private investments in the recycling of products and packaging discarded.It is expected the entry of about R$14billion/yr of investments in recycling.WASTE MANAGEMENT WASTE MANAGEMENT NEW REGULATIONSNEW REGU

37、LATIONSINCENTIVIZED DEBENTURES:INCENTIVIZED DEBENTURES:Infrastructure BondsInfrastructureDebenturesThereisabillunderdiscussion in the Congressthat is expected to create anew type of debt securities topromote fiscal incentives tothe issuer.Fast track analysis,ifthedebenture aims to financesustainable

38、developmentprojects(greenbonds).0040005000600070008000900000212022IN MILLION US$EnergyTransportTelecomWater and SewerageOTHER GREEN ECONOMY INITIATIVESOTHER GREEN ECONOMY INITIATIVESGreen Rural Product Certificate:Credit title intendedto finance reforestat

39、ion activities and maintenanceofnativevegetationonruralproperties.TheMinistry of Economy estimates a potential marketof US$6 billion in four years.“Forest+”Program(Ordinance Act 288,jul/2020):Itis an action by the Federal Government to create,promoteandconsolidatethemarketforenvironmental services,r

40、ecognizing and valuingtheenvironmentalactivitiescarriedoutandencouraging their monetary and non-monetaryretribution in all Brazilian biomes.“ABC+”Plan(oct/2021):ABC stands for low carbonagriculture.The plan aims to promote adaptationto climate change and the control of greenhousegases emissions in the Brazilian agriculture.Publiccredit is one of the plans funding sources.Thank you!Edson Silveira Sobrinho,PhDedson.silveiraeconomia.gov.brMINISTRY OF ECONOMY