Brazil - Environmental TechnologiesBrazil - Environmental Technologies
Based on published sales revenues of the country’s leading state-owned water and waste water (W&WW) utilities, the W&WW subsector is estimated at US$11 billion. ABRELPE, a nationwide solid waste management association, estimated the market size for solid waste management at US$8 billion. A source from the State of São Paulo’s Environmental Authority (known as CETESB) estimates that the W&WW sector represents 50 percent of the total environmental market, while the air pollution control technologies subsector accounts for 17 percent, and solid waste management (including soil/water remediation sector) represents 33 percent of the total market. The actual market size is only a fraction of the market potential, which is estimated between 1-7 percent of Brazil’s GDP (US$2.3 trillion).
Water and Wastewater Sector in Brazil
Brazil’s budget deficit prevents the Brazilian Government from investing in the country’s infrastructure. In an attempt to stimulate economic activity and attract the much needed investments to this sector, President Temer announced a package of infrastructure concessions and privatization programs and created “The Investment Partnership Program” (Programa de Parcerias de Investimentos, or “PPI”) for monitoring the projects in September 2016. PPI is part of the President’s office, reflecting the high priority the administration attaches to infrastructure.
Industry sources expect a large reorganization of Brazil’s water and wastewater market within the next two years, with increased participation of privately owned firms. BNDES, the National Bank for Economic and Social Development, has recently contracted private consulting services to determine models for private company participation in this market. Six state-owned water and wastewater utilities will initially be put forth for either privatization, long term concession or Public Private Partnerships (PPPs), after which, five additional companies will go through the same process.
In addition to the BNDES program, roughly 250 municipalities are interested in attracting private investments, which will result in a large number of new concession contracts and PPPs, all of which will attract significant investments in the sector for the next 30 years.
Although water distribution is available to 93 percent of the population, water rationing was established due to severe droughts in Brazil in 2014 and 2015. This situation highlighted the unreliable nature of the water supply system in Brazil. Industry experts attributed the water crisis to the historical lack of investments and planning, and also to poor management practices in Brazil’s public utilities. Experts agree that inadequate efforts to reduce the water loss (national average of 37.57 percent) and low sewage treatment rates, largely contributed to the reduction of the water reservoirs to the critical levels observed in São Paulo and Rio de Janeiro in the recent past. In addition, a deficient rainy season left Brasília’s reservoirs at only 50 percent of capacity by the end of April 2017, instead of the historic 100 percent level. Rationing currently shuts off water to neighborhoods one day in six. The failure to build a processing facility on Lake Paranoa (estimated completion end of September 2017) and the 200 KM pipeline to a large lake are more examples of poor planning and an assumption that Brasilia would always get lots of rain.
Sewage collection services are currently available to only 48 percent of the population, and only 32 percent of the collected sewage is treated, presenting a major pollution and basic sanitation challenge to Brazilian policy makers. Rural areas have almost no sewage infrastructure; larger cities show better numbers, but irregular settlements and a history of clandestine discharges are major challenges. Access to sanitation also varies by region – southern states collect 77 percent of their sewage, while northern states collect only 6.5 percent according to Brazil’s national statistics.
In Brazil, municipalities are responsible for water and sanitation services. They either provide the services directly or have concession contracts with state and private companies to perform the services. Of the 25 state-owned utilities that serve about 76 percent of the population, 13 charge fees that do not cover their operating costs. Municipal and private sector utilities serve about 10 percent of the population.
Funds for sanitation are made available by federal, state, and municipal governments, as well as by multilateral development agencies and private sector companies. According to industry experts, there is great need for investments in the expansion and replacement of existing water supplies, sewage collection, and sewage treatment systems, as well as increased management efficiency, quality of service, and technical capacity at all of the nation’s utilities. The National Bank for Economic and Social Development (known as BNDES) estimated that R$37 billion (US$9.7 Billion) will be invested in the water and wastewater sector from 2015 to 2018.
Solid Waste Management
In Brazil, municipalities are responsible for the collection and disposal of solid waste. There is large participation of privately owned companies in the sector, mostly through concession contracts through Public Private Partnerships (PPP). Waste disposal and landfill operations are either performed directly by the municipalities or contracted to a third party. Sanitary landfills are the most common destination of the waste in Brazil. In addition to the municipal public works, about 200 private companies perform nearly 80 percent of the solid waste management services (street sweeping, waste collection, disposal, sanitary landfill management).
According to the Brazilian Association of Solid Waste Management companies, ABRELPE, Brazil produces 78 million Metric Tons of municipal solid waste per year and ninety percent of that waster is collected. 45.6 percent of this waste is disposed in sanitary landfills and 32.4 percent ends up in dumps. In 2003 to 2014, the waste production in Brazil, increased by 29 percent whereas the population grew by 6 percent. Recyclable waste collection services have yet to grow. Statistics from Brazil’s Environmental Ministry indicate that only 23.7 percent of cities in Brazil have some type of selective (recyclables) waste collection service.
Brazil’s National Solid Waste Policy mandates that municipal waste be reduced, reused, recycled, treated, and recovered. Only after all these steps can it can be sent to sanitary landfills. The National Solid Waste Policy of 2010 also established targets and deadlines, which includes:
- Municipalities must submit their solid waste management plan by the end of 2012. (The latest figures that the Brazilian Environmental Ministry reported are from 2015, where 2,325 out of Brazil’s 5,570 municipalities had submitted their plans);
- The closure of all dump sites by 2014, though the Brazilian senate approved postponement of the deadline according to a schedule based on city size;
- Remediation by 2025 of areas contaminated by waste dump activities;
- 45 percent reduction of the amount of recyclables directed to landfills by 2031;
- 53 percent reduction of the amount of organic waste directed to landfills by 2031;
- Waste-to-Energy production – 300 megawatts per hour (MW/h) by 2031;
- Social inclusion of 600,000 independent waste collectors by 2031.
Air Pollution Control
Sources from CETESB estimate that about one third of the market for air pollution control equipment in Brazil is in the state of São Paulo, with half of that within the greater São Paulo metropolitan area. Brazil’s goal is to reduce greenhouse gas emissions 37 percent by 2025 and 43 percent by 2030. Brazil’s Intended Nationally Determined Contribution (INDC) focuses on the end of illegal logging in the Amazon forest; recovery and reforesting of 12 million deforested hectares; recovery of 15 million hectares of degraded pastures; and, increasing the share of renewable energy in Brazil’s energy mix to 45 percent.
The state of Sao Paulo has recently launched an online self-reporting protocol for companies operating in Sao Paulo state to report their greenhouse gas (GHG) emissions and their climate change mitigation strategies, including benchmarks, targets, and timetables. Executives from DOW, Toyota, Unilever, and GE expressed their support for the Protocol and their general willingness to participate in the reporting mechanism; many of these companies track and report GHG emissions on a global scale.
Water and Wastewater Treatment Technologies
Some water utilities have plans to adopt advanced treatment technologies, including ultra-filtration, nano-filtration, and reverse osmosis membranes for the supply of industrial water.
There is also increased demand for water-saving technologies with associated installation, training, and maintenance services. Such solutions include effluent treatment and energy management, advanced water treatment, water-loss prevention solutions, intelligent valves, efficient water distribution and reuse projects, water-saving devices, and rainwater systems.
The Brazilian agricultural sector has opportunities in more efficient agricultural irrigation technologies, such as drip irrigation control systems. However, the agricultural sector is generally not as affected by Brazil’s shortage of water as households and industry because most growers draw supplies from proprietary wells and groundwater aquifers.
New technology solutions are in high demand, as are related services for improving water potability, monitoring and measurement control systems for the reduction of use, loss, and leakage due to theft and deteriorating infrastructure. Remote, online control systems, and smart grid technologies fit well within this profile.
In addition to the municipal demand, the chemical, oil and gas, metallurgy, textile, automotive, sugar, ethanol, pulp and paper, and food and beverage industry sectors all are potential buyers of water and wastewater solutions.
Solid Waste Management Technologies
According to BNDES‘s sector analysis, technologies for waste collection (i.e., compactor trucks) and for sanitary landfills (i.e., earth moving equipment, polyethylene landfill liners with leachate and gas collection pipes) are all made in Brazil.
However, compliance with the National Solid Waste Policy will require large investments to build new sanitary landfills, expand old ones, and acquire technologies for waste to energy production, reverse logistics, recycling, composting, etc. BNDES estimated those investments at US$1.7 billion per year in the period 2015-2018. Because of the relative low cost, sanitary landfills will continue to be widely used in Brazil in the next few years. Production of biogas is encouraged by existing state legislation that enables the concessionaires to sell part of the biogas. There are 15 waste-to-energy projects in Brazil that generate 117.76 megawats (MW), of which seven are in the state of São Paulo: Termoverde in Caieiras; São João; Guatarapá; Bandeirantes; Tecipar; Ambient, and Energ-Biog. In addition, there are projects in Santa Catarina, Rio de Janeiro and Paraná. Power generators of one megawatt plus capacity for energy production are imported. Waste incineration is deemed too expensive for Brazil’s market, however, increased energy prices, the end of life of sanitary landfills, and lack of room for new sanitary landfills, could make incineration economically feasible in the future.
Air Pollution Control
According to Companhia de Tecnologia de Saneamento Ambiental (CETESB), technologies and services that are in highest demand related to air pollution include:
- Continuous emission monitoring systems (extremely high demand due to the implementation of new waste incinerators)
- Analytical and laboratory testing goods and services
- Air pollution control equipment
- Fuel vapor control systems (new legislation on gas station vapor emissions is currently being drafted)
Water and Wastewater Sector
There is new emphasis in attracting private participation to Brazil’s infrastructure sectors and the poor situation of Brazil’s basic sanitation, presents business opportunities for technology suppliers and for investors wishing to acquire assets. The increased private participation in the sanitation business also means additional opportunities for U.S. exports, as privately managed utilities are not subject to public procurement legislation.
Solid Waste Management
Industrial companies are jointly addressing policy compliance through their respective industry trade associations, which typically contract feasibility studies, design reverse logistic methods, establish waste collection points, and select appropriate waste treatment technologies.
Air Pollution Control
Given Brazil’s heavy reliance on hydroelectric power, air pollution in Brazilian cities primarily originates from industrial and mobile sources. Nevertheless, the drought that has been affecting the South, Southeast, and Northeast, regions of the country, is expected to result in increased use of thermoelectric power, which may cause changes in the air quality. Addressing air pollution has become a priority for the Brazilian government and has generated demand for gas emission monitoring technologies, gas analyzers, and air pollution control technologies.
In 2013, the state of São Paulo established “New Standards for Air Quality,” similar to the EPA NAAQS, which should generate a demand for consulting, analysis, and measurement services, as well as for equipment. CETESB published a study called “Emission Reduction Plan for Stationary Sources” (known as PREFE), which was released to the public in January 2014. The plan evaluates the ambient air quality in seven geographic regions of Sao Paulo with similar pollution sources, and establishes the emission reduction targets. Among the industries that do not currently comply with the new emission standards are: oil refineries, steel plants, petrochemical industries, pulp, paint, paint cabins, combustion equipment, and glass industries. According to CETESB, cement plants in the state of São Paulo are seeking alternative fuels, which should generate demand for control and monitoring equipment for emissions.
- IBAMA – Brazilian Environmental Institute
- CETESB – Environmental Authority of the State of São Paulo
- ABRELPE - Brazilian Association of City Cleaning and Waste Treatment Companies
- ABETRE- Brazilian Association of Solid Waste Treatment Companies
ABES / FENASAN Congress - Exhibition of Environmental and Sanitation Services
Date: October 2 to 6, 2017
Site: Expocenter Norte – São Paulo
Organizers: Brazil’s Association of Sanitary Engineers (ABES) and São Paulo State water utility Engineers Association
Comments: ABES bi-annual congress and the FENASAN trade shows will be held in conjunction for the first time. ABES and FENASAN are the number one water & wastewater related events in Brazil and attract a large audience and significant international exhibitors and visitors.
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