Biomethane market participants in Brazil are still wary of investing in voluntary emissions certificates such as GAS-RECs, as Greenhouse Gas (GHG) Protocol guidelines are still under development.
GHG Protocol, an organization run by the World Resources Institute and World Business Council for Sustainable Development, launched a consultation last year to update some of its guidance for its standards for projects to generate renewable energy certificates (RECs). But the draft proposal did not accept biomethane certificates for book and claim operations through pipelines — in which customers can claim an amount of renewable energy through certificates. Instead, it only allowed physical deliveries to end-users to count towards net neutrality goals.
After receiving criticism from the World Biogas Association (WBA) and many of its members, the proposal was reviewed, and the physical deliveries demand was withdrawn. Until new guideline is published, the biomethane market is in the dark regarding the specifics of how GAS-RECs will figure into companies' decarbonization.
"We currently are where I-RECs were in 2014," biomethane producer and GAS-REC issuer MDC's executive manager of new businesses Oliver Jones said during the GAS-REC panel at the I-REC Day Brazil 2024 conference in Sao Paulo last week. "We are educating the market [on GAS-RECs] so that companies know it better. There is an arduous path to convince companies, but having the GHG Protocol's seal of approval associated with GAS-RECs makes it easier."
Participants also expressed concern over triple counting between GAS-RECs, Cbio decarbonization credits and carbon credits. There are differences between the three, despite all of them being possible biomethane plant products. Carbon credits correspond to the amount of carbon a certain biomethane use avoids being released to the atmosphere. GAS-RECs certify the origin of that gas as renewable, while Cbios are connected to the transportation sector.
Argus' biomethane parity prices use Cbios as a reference to price the green attribute of the molecule, as it is the most transparent and liquid of the three options. Cbio credits made up R0.28/m³ ($0.06/m³) out of the average R2.66/m³ biomethane parity price between Rio de Janeiro, north and south Sao Paulo on 21 March.
