Main Point

With the deadline for meeting the targets approaching, demand for Cbio increased in September.
As a result, the price of the asset came out of the stagnation and reached a high of 48 BRL/Cbio.
Even with accelerated purchases, distributors still need to buy 9 million Cbios in just over 3 months.

Reminder: Waht is RenovaBio?

RenovaBio is the Brazilian national biofuels program launched in 2016
The main instrument of the program, in accordance with the Paris Agreement, is the establishment of annual national decarbonization targets for the fuel sector.
The national targets will be divided into mandatory individual targets for fuel distributors
To meet their goal, fuel distributors will need to acquire CBIO certificates on the stock exchange
Each CBIO emitted by biofuel producers corresponds to a ton of carbon that is not released into the atmosphere.
Biofuel producers voluntarily issue CBIOs, based on their energy-environmental efficiency rating of the volume of biofuels sold.

For the year 2021, the goal requires that 24.86 mm CBIOs are acquired by 136 distributors:
So far, the total credits issued by biofuel producers this year have been 23 mm.
The deficit between emission and demand will be remedied by the remaining balance for 2020.

Distributors have already purchased 16 mm of Cbios, which represents 64% of their targets.
There are about 9 mm Cbios left to be purchased by December 31, 2021.
According to the ANP, some distributors have already proven that they have met the targets set for the year.
Therefore, everything indicates that the other distributors will reach the goal within the deadline.

Until the month of August, the trading volume of Cbios and its price did not vary much.
An average of 176,000 Cbios were traded per day, far from the liquidity seen at the end of last year.
And so the price of Cbio “parked” between 26 and 29 reais.
However, as of September, demand picked up and the Cbios prices broke with stability, raising 48 BRL/Cbio – an increase of 77% in the month.

Despite different circumstances, the behavior of the September 2020 and 2021 negotiations was similar.
As the deadline for achieving the goals approaches, the demand for Cbio has increased.
Period also when it is less likely that there will be some type of review in the obligations of distributors.
Another point is the large batches of Cbio purchases, made by distributors with the largest share of the target.
Like Petrobras, which has a weight of 26% of the decarbonization target.
This also affected demand, thus raising the price of Cbio.

Until now, the volume of Cbios traded on B3 generated a financial value of 548 million reais.

This all reverts the revenue to the issuers of Cbios, that is, the biofuel mills.
With the goal not yet met, by the end of the year, issuers can receive around 297 mm reais.
Remembering that this revenue is free cash for mills, so they can allocate the money wherever they need it.

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