Sustainable Industry

Industrial sector’s proposal for a productive, competitive and sustainable Brazil

By Davi Bomtempo, executive manager for Environment and Sustainability at the National Confederation of Industry (CNI)

Balancing production and environmental conservation is a non-negotiable principle for any nation that intends to be competitive, prosperous and sustainable. Overcoming this challenge is everyone’s responsibility and should involve action by governments, the private sector and citizens. Brazil’s industrial sector is a relevant part of the solution for the country’s sustainable development and, as such, has been a great ally in the promotion of green investments.

To this end, the National Confederation of Industry (CNI) has engaged the sector with a strategy based on four pillars: energy transition, carbon market, circular economy, and forest conservation. We seek to tap into the country’s advantages and potential to develop and encourage the adoption of alternative sources of clean energy, the establishment of a carbon market, a circular economy, and efficiency in the use of natural resources while generating business models that are less reliant on new raw materials, and advancing supply chains that are based on the sustainable use of biodiversity and forests.

As a way of further contributing to this agenda, we are sharing two studies containing proposals on sustainability with the presidential candidates for this year’s elections: The Low-Carbon Economy: Towards a Sustainable Future and Environmental Licensing: Development with Conservation. These topics were chosen for their relevance to the issues that most impact the sustainability agenda and for the pressing need to overcome bottlenecks that prevent the country from developing.

Embracing a low carbon economy driven by clean technologies and more efficient production processes is essential to leverage the country’s sustainable development and make companies more competitive in both the domestic and international markets. It has the potential to change global value chains and put financial and production resources to work, thereby enhancing the competitiveness of economic segments that generate jobs and income. Our suggestions to boost the low carbon economy include expanding biofuels, promoting adequate incentives to make energy consumption more efficient, establishing offshore wind farms and regulating the hydrogen market.

The establishment of a regulated carbon market according to the Emissions Trading System (ETS) model is also an important aspect. This strategy is increasingly being used by governments to encourage GHG emission reductions and to achieve the goals under the Paris Agreement, and Brazil cannot afford to lag behind. The establishment of a well-operated carbon market that is based on a robust governance framework could attract new business and investments and generate ‘green jobs,’ in addition to fostering technology transfer. Hence, we intend to promote a virtuous cycle by accelerating the pace of regulatory and structural improvements required to strengthen the country’s industrial sector based on the strengths that the country has – and these are many!

Now, the proposals on environmental licensing stem from the need to put in place a more agile and efficient process that makes Brazil’s regulatory and business environment competitive at the international level, but without undermining the environmental wealth. Licensing industrial projects in Brazil is a costly process that involves red tape and legal uncertainties. Striking a balance between economic activity and sustainability is key. In order to achieve this goal, we are in favor of improving the licensing process and harmonizing it with other environmental planning mechanisms.

It should be pointed out that streamlining and harmonizing rules does not mean lowering environmental protection, which continues to have the same level enshrined in the environmental legislation. However, like any public policy, a piece of legislation that has been around for 40 years needs to be overhauled and improved.

Environmental licensing rules should be clear and in line with best international practices, and they should ensure that projects commit to environmental conservation once they leave the drawing board. It does not make sense to have 27,000 regulations on the matter. It does not make sense for an operating license application to take up to seven years. Nor is it acceptable that an entrepreneurial country like Brazil does not have a streamlined licensing model that benefits micro and small enterprises. This deprives the business sector from the ability to bear the deadlines and the associated burdens.

The actions we are proposing are designed to promote process improvements by rationalizing and streamlining procedures, integrating land use planning and management instruments, building a centralized database that would store the information from previous environmental assessments, etc. We would like to reiterate that this would not involve waiving the necessary environmental safety that the licensing should provide to projects.

Brazil’s industrial sector is aware of the importance of licensing, whether in terms of environmental protection or for improving the project management. That is why we argue for overhauling the legislation and accepting our proposals, which result in a smarter and more organized model that is more integrated with a policy of land occupation and management. In summary, a more efficient model that makes it easier to attract investments and boosts job and income generation for Brazilian citizens while strengthening the country’s environmental riches.

The sustainability agenda is a major national challenge. We cannot afford to miss the opportunity to propose actions and pathways so that, over the next four years, Brazil can overcome historical bottlenecks that hamper its competitiveness and gear up for the challenges of the economy of the future.