FS increasingly invests in sustainability and innovates with green credits.
Lucas do Rio Verde, July 10, 2020 – FS, the first ethanol player in Brazil that uses corn in 100% of its production, has been improving its environmental and sustainable initiatives and certifications and, in 2020, it obtained the certification to join RenovaBio and issue Decarbonization credits (CBIOs). FS holds the best Energy-Environmental Efficiency Rating (NEEA) for anhydrous ethanol and the second best rating for hydrated ethanol. FS is also the only certified corn ethanol producer that discloses primary data, including traceability of agricultural emissions from grain suppliers, and we are aligned with the Green Bond principles, as confirmed by an assessment from SITAWI.
In 2020, Company raised R$530 million in green issues with two financial institutions – Santander and Credit Suisse. The first step was the issuance of Agribusiness Receivables Certificates (CRA), in the amount of R$210 million, by Credit Suisse, in February 2020. Following, in June 2020, FS issued R$140 million in Real Estate Receivables Certificates (CRI), also with Credit Suisse and, lastly, it issued a bilateral loan with Santander, in the amount of R$180 million. These last two operations are linked to sustainable goals, issued for the first time in Brazil.
The CRI with Credit Suisse and the bilateral loan with Santander are remunerated according to interest linked to sustainable goals, which, if achieved, will reduce the rates applied by the banks. The goals were to: (i) remain in RenovaBio’s top 10 anhydrous ethanol ranking; (ii) increase the information disclosure transparency by achieving the GRI – Global Reporting Initiative seal in its sustainability report; and (iii) receive certification for the issue according to the CBI – Climate Bonds Initiative standards.
“The eyes of all organizations and countries around the world are increasingly focused on the urgent need to reduce carbon emissions and raise concerns in having sustainable operations. Having the opportunity to consistently contribute to this goal is satisfying and makes us proud. We will continue on this path to seek increasingly sustainable energy”, said Rafael Abud, the CEO of FS.
FS was also the subject of a study coordinated by Agroícone and published in the Nature Sustainability journal, which analyzed socioeconomic and environmental aspects of ethanol production from second-crop corn in the Midwest region of Brazil. The results show that the economic potential in the region is allied to the significant contributions that corn ethanol production offers in mitigating greenhouse gas (GHG) emissions, which can reach levels between 71% and almost 100% compared to gasoline. The percentage varies according to the attributional or consequential valuation methodology used.
Second-crop corn productivity in the Midwest region of Brazil increased notably over the last 20 years, benefiting the investments made by the biofuel industry in the second-crop corn ethanol modality. The outlook is an increase in Brazilian production of corn ethanol, reaching 3 billion liters by 2021. Investment speed and volume indicated the need to carry out an analysis to measure the socioeconomic impacts, greenhouse gas (GHG) emissions and changes in use of land caused by the second-crop corn ethanol industry.
There are some characteristics of the corn ethanol production process that contribute to these very positive results. The first one is that corn ethanol produced in Mato Grosso derives from second-crop, which is interspersed with soy planting, therefore protecting the soil, optimizing productivity and resources, and avoiding deforestation, in addition to not competing with food production. The second reason is the use of eucalyptus, instead of fossil fuel, as a source of energy for the plant’s operations. These two factors differentiate Brazilian corn ethanol from the one produced in the United States, with significant environmental benefits.
In addition to ethanol, the manufacturing process also produces rich animal nutrition products called DDGs (Dried Distillers Grains) and corn oil, thus reducing demand for corn and soybeans as animal feed. The plant’s surplus bioelectricity (produced with eucalyptus) is also transferred to the national electric grid, reducing demand for other sources of energy.