Brazil - Resource Efficiency Program for Brazil’s Beef Supply Chain

Beef production is the single biggest contributor to Brazil’s greenhouse gas emissions (GHGs). It was directly responsible for 17% of Brazilian GHG emissions in 2014 and indirectly responsible for another 24% (due to its impact on deforestation). The beef industry is set to grow by 30% by 2023 with commensurately greater impacts. That poses a major challenge to Brazil’s ability to fulfil its Nationally Determined Contribution (NDC), which includes ambitious targets to reduce national emissions by 37% below 2005 levels by 2025 and restore 15 million hectares of degraded pasturelands by 2030. The realization of Brazil’s NDCs therefore requires a major shift in approach by the beef industry and its supply chain. The program proposed in this NSP aims to catalyse that shift in approach and help realise the huge untapped potential to enhance the beef sector’s efficiency by supporting the implementation of proven best practice interventions across its supply chain.

The 3-year program aims to address the main technical and financial barriers which prevent best practices being implemented at scale by offering the supply chain an integrated suite of measures. These will include: (i) awareness raising of the commercial benefits of resource efficient solutions; (ii) a full technical assistance package, including financial de-risking measures, such as on-site audits, accreditation of technologies and support throughout implementation; and (iii) an attractive finance package to enable investment in best practice.

Farmland in Mato Grosso, Brazil. Copyrights: Georg Kraft Farmland in Mato Grosso, Brazil. Copyrights: Georg Kraft Cattle ranch in Brazil. Copyrights: Georg Kraft Cattle ranch in Brazil. Copyrights: Georg Kraft

Direct funding leverage: NSP seeks: 1) EUR 11.25 million in grants to generate a pipeline of projects for investment in best practice technologies and measures, through awareness raising, technical assistance and de-risking mechanisms and to support program scale-up; and 2) EUR 4 million to create a first loss guarantee facility to leverage EUR 40 million in loans from multilateral development banks, to finance the pipeline of projects generated.

Indirect funding leverage:  It is estimated that in turn, this would leverage an additional EUR 20 million in finance from Brazil’s private sector.

Mitigation potential: The NSP estimates directly avoid over 5 MtCO2eq over the lifetime of its interventions, at an abatement cost of EUR 7.8/tCO2e, plus an additional 20 MtCO2eq in indirect mitigation from avoided deforestation, assuming conservative parameters. Additionally, this program would save this supply chain over EUR 260 million in net resource cost savings, helping increase its productivity, as well as recover 66,000 ha of degraded pastureland.

Facts
Partner ministriesMinistry of Agriculture, Livestock and Supply; Ministry of Environment
(co-) applicantCarbon Trust
StatusDetailed Preparation Phase

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