Among the pioneers in the discussions on pricing towards decarbonization, Neoenergia anticipated with the analysis of the future impact of the Regulatory Framework on mandatory carbon pricing for the Brazilian economy. The company included the electricity sector to participate in the discussion of the theme, given through the Internal Carbon Pricing Project (PIC), started in September 2020 and with results presented at the end of the first half of this year. The PIC Project was coordinated by the company's Innovation and Sustainability Superintendence area and in partnership with the Center for Sustainability Studies of the Getúlio Vargas Foundation (FGVCes).
What is Internal Carbon Price?
The Internal Carbon Price represents the cost of rebate for each tonne of carbon emitted. To this end, the company's initiatives that are already reducing emissions - and may reduce further in the future - and their costs have been mapped. Among them the electrification of the fleet, operational improvements in Termopernambuco, which reduce the consumption of natural gas, R&D that exploits the use of electric trucks, energy efficiency actions, shielding the network reducing non-technical losses, R&D that provides for the use of batteries in Noronha, smart grids, among others. This information supports the company's commitment to having its growth strategy based on reducing emissions intensity.
"Neoenergia is ahead of the world's few companies that have already calculated their domestic carbon price to support and honor their climate commitment to reduce emissions intensity toward climate neutrality. Today, in the world, according to the World Bank (2020), only 850 companies have their internal price of carbon calculated",says Francisco Carvalho, Superintendent of Innovation and Sustainability of Neoenergia.
At the same time, Neoenergia seeks to know which regulatory framework designs have the greatest or lesser impact on the business, to position the company with technical information of excellence with the government. In addition, the project had a cycle of training and workshops to train employees in the business and corporate areas in methodologies for pricing.
In the technical part, the company had the participation of about 35 employees from various areas, suchas Energy Efficiency, Research & Development,Thermopernambuco, Regulation, Networks,Planning and Control, General Services, Risks, Renewable Control, Marketing.
"The construction of knowledge about carbon pricing at Neoenergia, done jointly with employees and supported by FGV is the differential of the project. It ensured that the technical results were robust and validated with the corporate and business areas. Thus, we have an asset of knowledge internalized in the company, creating autonomy to generate our own calculations on pricing from now on",says Juliana Speranza, of the Superintendence of Innovation and Sustainability and who coordinated the project.
Carbon pricing is an important tool to accelerate the energy transition and decarbonization of the economy, with economic opportunities for renewable businesses, which are potential sellers of carbon credit.
The next step is to use Neoenergia's carbon price to guide decision-making with investments, thus supporting the decarbonization route of the company's business. Carbon pricing is an important intake for achieving climate targets to reduce CO2 intensity by 50% by 2030 compared to the base year 2007 towards net neutrality by 2050.
The internal carbon price will be adjusted periodically, aiming to include the ongoing innovations in the company, with new decarbonization initiatives created that lead to emission reduction.