Good practice package for appliances in Brazil

Policy roadmap and targets for very efficient appliances
Since the first oil crisis in the 1970s, the Brazilian Government has taken measures and implemented programmes to minimise energy loss, especially during the crisis. The Brazilian energy labelling programme was implemented in 1984 and was one of the first instruments worldwide to increase the energy efficiency of appliances. At the federal level, Law 10.295 (“the Energy Efficiency Act”) was an important message signalling the importance of energy efficiency. Passed in October 2001, it deals with national policy for energy conservation and rational use, establishing “maximum levels of specific energy consumption (or minimum energy efficiency levels) for energy consuming machines and devices produced and sold in Brazil.” One important consequence of the improvement in Brazil’s energy efficiency programme is that the nation’s energy planning has begun to take account of such impacts. The National Energy Plan 2030, which included projections for the development of Brazil’s energy sector over the next two decades, explicitly assumes impacts of between 4.0 GW and 15.5 GW of savings in electrical generation as a result of energy efficiency programmes (United Nations 2010).
In 2008, the National Climate Change Plan (NCCP) was signed. While it focuses mainly on deforestation issues, it also highlighted the importance of various energy efficiency measures. Brazil’s Energy Efficiency Action Plan has been based on the NCCP. The former aims at “a reduction in electricity consumption of around 10 percent by 2030 compared with a reference scenario (equivalent to savings of 106 TWh), which would avoid 30 million tons of CO₂ emissions that same year. The plan also involves the replacement of one million old refrigerators per year for 10 years. Lastly, the plan aims to improve energy efficiency in industry, transport and buildings” (ABB 2011, p.2). Unfortunately the plan to replace one million old refrigerators per year for 10 years was never implemented in national policy.

International co-operation
Most countries in Latin America have promoted programmes on a national basis. Nonetheless, the role of multilateral co-operations is often significant. Many programmes to promote efficient energy use in Latin America have been supported, and initiated, by international co-operation agencies (Altomonte et al. 2003).
Furthermore, Brazil is a member of OLADE, the Latin American Energy Organisation. OLADE provides political and technical-support and the promotion of agreements between its member countries (www.olade.org).

Energy agencies
Authority over energy efficiency policies rests within the Ministry of Mines and Energy (MEE). Especially, its Secretariat of Energy and Development Planning with its subdivision, the General Energy Efficiency Co-ordination Office (GEECO) determines, implements and evaluates Brazil’s energy efficiency policies, programmes and projects. However, MEE and more specifically GEECO appear to lack sufficient financial and human resources devoted to promoting the issue comprehensively (United Nations 2010, p.51).

Energy Efficiency Funds and Energy saving obligations for energy companies
In Brazil, electric utility companies have to invest 0.5% of their annual net revenues in “energy end use efficiency programmes, of which 50% must be used for end-use efficiency in low-income households” (Broc & Herreros 2010, p.34; Gadonneix 2010, p.111). This means US$ 80 million/year has to be invested in low-income household programmes. This measure is known as the “Brazilian Public Benefits Fund”. For more information explore the bigEE good practice example “Refrigerator Replacement Programme Brazil”.

Government agencies and budget
There are two large energy efficiency programmes. The National Electric Conservation Programme (PROCEL) is co-ordinated by the National Institute of Metrology, Quality and Technology (INMETRO) and addresses energy issues in various sectors (e.g. education, construction). CONPET is managed by PETROBAS, a public private oil business. CONPET aims at rationalising the use of oil products.
The PROCEL programme, which is more important for energy efficiency in buildings and appliances than CONPET, comprises a number of sub-programmes including education, R&D efforts, labelling, support for ESCOs and public sector programmes. Funding for PROCEL comes from federal funds in which public utility providers have shares proportional to their contributions. In 2007, total investment in PROCEL activities was BRL52.8 million – reales - (€21.7 million). Another important source is the ANEEL Energy Efficiency programme (PEE), which provide investments in energy efficiency projects (United Nations 2010). Some of these sub-programmes of PROCEL also deal with household appliances and in particular with refrigerators and freezers.

Removal/reduction of subsidies on end-use energy prices and on energy supply
In Brazil, energy subsidies were introduced in the mid 20th century, mainly to fuel industrialisation and to reduce the risk of social unrest (Oliveira & Laan 2010, p.3). However, in the 1990s a liberalisation process of the Brazilian economy including the energy market took off. “Competition was expected to reduce costs and provide the correct price signals to consumers, promoting energy conservation and efficiency. De-subsidisation also promised to increase government revenue” (Oliveira & Laan 2010, p.6). Energy subsidies were removed gradually until the beginning of the 2000s. When in 2002 Luiz Inacio da Silva won the presidential election and energy sector reforms were stopped but subsidies for petroleum products were restored in 2008 (Oliveira & Laan 2010, p.10).

Regulation of energy companies
The regulator supervises the use of the 0.5% of their annual net revenues that electric utility companies have to invest in “energy end use efficiency programmes (known as the ‘Brazilian Public Benefits Fund’)”.

Minimum Energy Performance Standards (MEPS)
In 2001, Federal Law 10.295 was installed in Brazil to introduce minimum efficiency levels formally. Minimum Energy Performance Standards (MEPS) for refrigerators, freezers and fridge freezers were actually adopted in 2007. The next table provides details about these standards (de Melo & de Martino 2010, p.6545 et seq.). 

Source: MELO & Jannuzzi apud MME, 2007
Note: R141B and Cyclopentane are refrigerants. AV is adjusted volume

In order to safeguard compliance with the respective MEPS, products are tested in and labelled by accredited laboratories and certification bodies, respectively (INMETRO; Borges 2012, 14). They can be rated from A (very efficient) to F (least efficient). This ranking is also made visible through the mandatory information label.
The average consumption of new refrigerators decreased from 1990 to 2005 from 491.3 kWh/yr to 270.4 kWh/yr (Balbino Cardoso & Rafael 2010, p.30, see table). According to the introduction of the Federal Law “one believes that the energy efficiency labelling of freezers and refrigerators will act as the first step to introduce these limits, encouraging more effective equipment manufacturing” (Balbino Cardoso 2010, p.30).
The main measures that manufacturers implemented to improve the energy efficiency of their refrigerators and freezers were to improve the compressor, increase the thickness of thermal insulation and improve seal and control systems. The next figure shows the estimated impact of both MEPS and energy labelling on electrical consumption of refrigerators in Brazil (United Nations 2010).

Mandatory comparative and voluntary endorsement labelling scheme
The Brazilian energy labelling programme (Programa Brasileiro de Etiquetagem, PBE) began in 1984. In addition to the MEPS, two labels are displayed on refrigerators and provide information to the customers. The mandatory information label (Energy Standard Information System (ESIS)) is similar to the European energy label and provides a rating scale from A (best) to F (worst) (the grade G was abolished). The classification is assessed by INMETRO (National Institute of Metrology, Standards, and Industry Quality), which in general revises the labelling scheme every four years or as soon as A- and B-labelled products penetrated the market to a large extend (INMETRO a). As an additional label, PROCEL grants the endorsement label to the most energy-efficient appliances. The decision to which product the endorsement label is assigned, is made by a technical committee led by PROCEL and 7 other decision makers involved. The standards for the labels are set by INMETRO by setting a maximum allowable energy consumption per label class as function of the adjusted volume. In Brazil, refrigerators are classified as tropical appliances (climate class T) because of 32°C of ambient temperature and 50% humidity in standardised test methods (Vendrusculo et al. 2009, p.273 et seq.). The requirements therefore are different from those in Europe (for example cf. Balbino Cardoso 2009).
The Standards and Labels applied in Brazil are also important for the implementation of refrigerator replacement programmes. The regulator only allows A-labelled refrigerators as a replacement for inefficient old ones.

Financial incentives for very energy-efficient appliances
In 2002, an electricity social tariff was created by the federal government in order to provide low-income families with affordable electricity and in parallel to reduce “power theft”. The families that obtain the social tariff or belong to the low-income consumers are also able to take part in a refrigerator replacement programme (De Martino Januzzi & Gilberto 2007). The programmes are financed out of the “Brazilian Public Benefit Fund” (see the section on Governance framework). The following examples provide more insight on how the replacement programme is carried out.
One replacement programme is the COELBA Agent Project in Salvador da Bahia, where from July 2006 till the beginning of 2008, 17,000 refrigerators had been replaced, together with approximately 90,000 CFLs. The expected electricity savings through these measures are around 19 GWh/yr. An electricity consumption reduction of 43% or 635 kWh per household per year was observed according to Mascarenhas (Broc 2010, p.34). This programme was combined with a recycling programme for old refrigerators which has helped to absorb 400 kg of CFC-R12 gas and help to raise money for community projects. The programme was funded with US$ 9.4 million (Broc 2010, p.36).
In Sao Paulo, the Slum Electrification and Loss Reduction Programme (SELR) was implemented by US-AID in 2005, supported by International Copper Association (ICA). A pilot programme started in Paraisopolis where most electricity consumers were connected illegally to the electricity network or were legally connected without paying and therefore did not care about inefficient appliances, not knowing how much they consumed. In order to make illegal electricity consumers legal customers, several measures were undertaken. The measures included refrigerator replacement for low-income families whose refrigerators were rated to be in bad condition, replacement of incandescent light bulbs with efficient ones and rewiring of homes. As an outcome of the programme it should be highlighted, that 98% of the families that received rewiring and refrigerator replacement were “highly satisfied with their better quality service and the assistance received improving their household energy efficiency” (Lawaetz, p.2). 500 refrigerators were replaced by new ones A-rated by PROCEL throughout the implementation of the programme, alongside other energy efficiency measures. Through this measure it was possible to reintroduce the formerly unable, or unwilling to pay electricity consumers, to the legal market. The programmes used the already implemented energy label with the rating from A to F to identify the most efficient models (class A), to use a transparent method and to simplify the process. The project costs amounted to US$ 2.52 million. (cf. Lawaetz, p.2).
In total, 45 utility companies were carrying out refrigerator replacement programmes, totalling 383,760 appliances from 2008 to 2010 that are now expected to save 186,294 MWh/year and reduce peak demand by 23,277 kW. The energy savings from refrigerator replacement achieved 81% reduction in refrigerator electricity consumption in a case study sited in the Northeast region. Preliminary data from two case studies in the Southeast region show a reduction of 75% and 70%. The replacement of old refrigerators with efficient ones also accounts for good DSM (demand side management) in Brazil (cf. GIZ, Programme PROKLIMA).
Since 2011 the government developed another policy to support energy-efficient appliances with financial incentives. For consumers it is possible to reduce the federal taxes on efficient appliances when the appliance is labelled with an A-Label. It is a part of a plan to stimulate the economy and especially the industry.
In addition to these financial programmes the recycling of these old replaced refrigerators is a very important climate topic and part of an intelligent policy package. In Brazil, about 50 million inefficient refrigerators exist, which still contain Chloro-Fluoro-Carbons (CFCs) and which are therefore powerful GHG emitters if not properly treated during recycling or before disposal. CFCs have a global warming potential around 3,000 times higher than CO₂. In addition, CFCs harm the ozone layer and their use is, therefore, forbidden in new appliances; however, CFC used to produce refrigerators before the CFC ban, still remains in the old appliances and would be released to the atmosphere if the old refrigerators were not properly attended to.
In Brazil, old fridges are collected by scrap collectors, as explained above. So far, the problem has been that refrigerants and foaming agents are released into the atmosphere. In order to change this, the Ministry of the Environment is assisted by the GTZ (now GIZ), the German organisation for international co-operation, to introduce a “Comprehensive Refrigerator Recycling Programme” in Brazil, that also captures emissions and not only the materials like metals and plastic that have a value for resale. In the pilot programme, a recycling plant with the ability to recover CFCs and other GHG emissions is set up. The programme also includes a training programme and development of skills for professionals that run the plant and in order to ensure the good quality of the operation and for future recycling plants to introduce high technical standards and regulations.
It is also an important part of the project that all relevant stakeholders like manufacturers, retailers, technicians and scrap collectors participate in the programme for compliance and good implementation purposes.
The plant in the pilot programme has the capacity to recycle 350,000 refrigerators/yr, which will avoid CFC emissions equivalent to 890,000 tonnes/yr of avoided CO₂ emissions, and the recycled materials like plastic and metals can be sold to the local industries for manufacture. The combination with the replacement programme is important for nationwide energy changes and financial relief of low-income households (cf. GTZ PROKLIMA).
A similar project has been launched by the Swiss foundation SENS International by inaugurating their plant in Sao Paulo, in September 2010, with a capacity of recycling 300,000 to 400,000 refrigerators/yr, resulting in avoided CFC emissions equivalent to 400,000-600,000 tonnes of avoided CO₂ emissions each year and thereby creating new jobs and the possibility for workers of further education in recycling techniques. It is stated, that in order to be able to manage all waste that needs to be recycled, about 15 of such plants are needed nationwide (cf. SDC- Swiss Agency for Development and Co-operation).

Education and training
The National Energy Conservation Programme (Procel) offers “training courses, seminars, and conferences to industrial and commercial consumers, concession-holder staff and public organisations to combat energy waste” (WRI).

Research and development funding
The Ministry of Mines and Energy is responsible for implementing Brazil’s energy efficiency policies. One of its main tasks is the co-ordination with other government agencies, private and public enterprises, research centres and universities.

Energy efficient public procurement
Brazil has no specific targets for the public sector, but the working plan of the National Plan of Energy Efficiency (PNEf) deals with energy efficiency. Instruction number 01/2010 states that energy efficiency has to be considered in the procurement process (Moss, presentation 2012).