Renovabio: an analysis of efficiency score, the granting credit and the cost of debt

• Grant number: 23/18323-2
• Support Opportunities: Research Program on Global Climate Change - Regular Grants
• Start date: May 01, 2024
• End date: April 30, 2026
• Field of knowledge: Applied Social Sciences - Administration - Accounting
• Principal Investigator: Ricardo Luiz Menezes da Silva
• Grantee: Ricardo Luiz Menezes da Silva
• Host Institution: Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (FEARP). Universidade de São Paulo (USP). Ribeirão Preto , SP, Brazil
• Associated researchers: Luiz Gustavo Antonio de Souza ; Mario Otavio Batalha

Abstract

RenovaBio corresponds to the National Biofuel Policy, aiming to reduce the carbon intensity of the fuel matrix by 10% by 2030, ensuring the sustainability of biofuel production and the reduction of GHG emissions. There is literature that evaluates the effectiveness of programs aimed at reducing greenhouse gases, indicating whether or not there was a decrease in the carbon intensity (CI) of the fuel. In this sense, we seek to compare the participation of plants in RenovaBio, given by the efficiency score, in relation to their peers, to assess whether the region, certifications, inspection firms, size, financial performance and indebtedness are elements that can influence the carbon intensity, and consequently the efficiency score. In addition, it seeks to investigate the determinants of private and public financing in programs aimed at low-carbon energy transition, highlighting the government's role in encouraging creditors to facilitate financing for the renewable energy sector. Finally, there is literature on the association between carbon intensity and cost of capital, indicating that creditors may demand a lower interest rate for cases of low GHG emissions, which represents an incentive to assess the relationship between the efficiency score and cost of third party capital of the plants. In view of this, the objective of the research is to understand the drivers of the efficiency ratings, the granting of credit and the cost of debt of the plants that participate in RenovaBio. The method comprises econometric models, questionnaires and interviews, and the data collected correspond to the period of 2020, 2021 and 2022. (AU)