RenovaBio is Brazil's national biofuel policy that creates tradable carbon credits called CBIOs. Certified biofuel producers (ethanol, biodiesel, biomethane) generate credits based on their environmental efficiency. Fuel distributors must purchase credits on the B3 stock exchange to meet annual targets.
The system achieved 88% compliance in 2025, with targets of 36-49 million CBIOs. The market mechanism directly links fuel distribution to decarbonization incentives, creating a functioning carbon price without the cap-and-trade complexity that stalled European and US systems.
RenovaBio is notable because it works. While many carbon markets struggle with verification and compliance, Brazil's system builds on measurable biofuel production with established supply chains. It's a pragmatic, sector-specific carbon pricing mechanism rather than an economy-wide scheme.