Sustainability Startups In Brazil On The Rise

São Paulo – As sustainability has become a hot topic, entrepreneurs in Brazil have launched more and more businesses that combine the conservation of the planet and financial gains. The number of startups that produce clean technologies, the so-called cleantechs , has almost doubled in the country year on year. Most of them have already been born focused not only in Brazil but also in foreign markets that are more advanced for goods and services that benefit nature and the well-being. Pictured above, Victor Soares and Diego Fraga, partners in a sustainability startup.

The term cleantech arose in the United States in 2002 but picked up momentum worldwide in 2005 and 2006, driven up by sustainability, which has gained space since the beginning of the twenty-first century and rose steadily with the increase in commodity and electricty prices , the increase in customers' awareness and the emergence of carbon-credit trade mechanisms.

By 2050, a global growth of 50% is expected in solutions focused on energy efficiency, a field where cleantechs receive the majority of investments, as per the Global Cleantech 100 report by Cleantech Group. According to the survey, there are now over 11,000 companies classified as cleantechs spread across 75 countries.

In Brazil, the number of cleantechs increased by 83% from 2020 to 2021, the Brazilian Startup Association ( Abstartups ) reported. In 2020, there were 96 startups focused on sustainability, and in the following year this number jumped to 176. Most of these businesses in Brazil is focused on air and environment (39.2%) and clean energy (26.5%), but the country also has cleantechs that operate with transportation (8%), clean industry (7.8%), water (2.9%), and agriculture (1%).

Locks: Brazil is on the spotlight

Environmental engineer and sustainability expert Aline Maldonado Locks says that the cleantechs in the country are rising because when we talk about environmental and social issues, Brazil has more rules and pressures due to its forests, the increase in deforestation and the need to conservate its biodiversity.“The other countries are shining the spotlight on Brazil. So it's easier to implement environmental works around here, because if we can implement something on Brazilian soil, we apply it to other countries,” Locks said.

Metha CEO Victor Soares believes Brazil is the perfect place for creating sustainability startups due to the abundance of natural resources.“We have a relation of little awareness of the impact we have caused on the planet. We have so much access to natural resources that we end up not having to become aware of their use due to scarcity. The population doesn't worry at all with the type of energy they consume and the production of waste, for example,” she said. Metha is a platform focused on access to clean and sustainable energy.

Even if only 1% of the cleantechs are focused on agriculture, environmental engineer Locks explains that the companies are largely internationalized, with technology brought from abroad being implemented in Brazil. Unlike what you can imagine, the reason behind the small number of cleantechs in fields such as agriculture and transport, clean industry and water, is not the lack of interest from investors.“The money is there, what's missing is some exchange, some connection between various solutions. For example, I see we have many tools in agriculture, but not everyone know why there isn't an information exchange,” Locks said.

Sustainability startups

Felipe Cardoso, who holds a degree in business management and is the CEO and founder of Eco Panplas , has always wanted to start a purpose-driven business. The plastic industry was chosen for its ties with his family.“I've always seen recycling as something nice for reusing materials and preserving the environment. As I learned more about the market, I understood that there were many contaminated materials and recycling materials that had to be cleaned used a lot of water, and water is also a scarce natural resource,” Cardoso said.

Cardoso chose recycling

eco panplas was born with the idea of solving a recycling problem in 2014 in Hortolândia, São Paulo, as an innovation project to develop a production technology that could recycle automotive oil lubricant packages without using water. Cardoso's research showed that this type of technology didn't exist anywhere in the world, but he found a Brazilian manufacturer that had an initial project in the sector. Cardoso invited him to embark on the business together.

During the first three years of the company, the partners created the equipment of the manufacturing plant and from 2017 to 2020, they started recycling packages on an industrial scale. Afterwards, Eco's production increased by almost 80%. In recognition of this unheard-of technology, the company has received 32 national and international awards, the most recent being 2022's Energy Globe World Award , seem as the world's largest environmental prize. The CEO of the company is proud of the legacy of biodiversity conservation it's leaving for the future generations.

To recycle the packages, a system made up of patented equipment and processes is used. First the package is ground. Then it goes through a series of physical-chemical and mechanical processes, without using water, where the plastic is entirely separated from the oil and the label. At the end, a clean ground plastic comes out, and the oil and the label are recovered. The plant currently employs around 12 people.

The recycled plastic accounts for 94% of the process, the oil 3%, and the label 3%. Due to geographical proximity, the plastic then becomes resin, and the oil and labels are sold to plants in São Paulo. But there's an expansion plan to start selling the recycled plastic to other states. Most materials for recycling now come from São Paulo, but some have already come from Northeastern states, as well as Espírito Santo and Minas Gerais.

Eco Panplas has successfully tested recycling packages of cooking oil, plant oil, and cosmetics. The goal is creating new plants to recycle these products. The startup produces 200 tonnes of decontaminated plastic and 7,500 liters of recovered oil a month. The process represents a conservation of 7.5 billion liters of water and 306 less tonnes of greenhouse gas emissions.

Metha: For a cleaner energy

Thinking on how to solve another sustainability-related issue, financier Victor Soares, along two partners, created Metha Energia in 2017, in Belo Horizonte, Minas Gerais. The company emerged as a sustainable, practical service to provide clean energy to consumers. Now only Diego Fraga, who's an engineer, remains as a partner of metha with Soares.

Soares: Electricity bill savings

The company generates clean energy in partner solar and biogas plants (biogas is basically a product originated from the decomposition of organic matter) and injects it into the grid of the local power utility. The consumer that lives in the regions attended by Metha, registers on the website and upon approval, the utility is notified that the installation indicated will receive the credits from clean energy. In addition to helping the environment, the consumer saves up to 15% in their monthly electricity bill.

The idea came in a time when Brazil saw a very large increased interest in solar power. Outside the country, this could be particularly seen in the United States, Russia, and Europe. The legislation in Brazil had just matured to allow consumers to generate their own energy without needing to rely on the local distributor to do so.“There was no one looking at the end house consumer and when we started researching in more depth, we understood that Brazil didn't have anything structured in that sense,” Soares said.

The company now has 50 employees and serves 450 cities in the state of Minas Gerais. Furthermore, consumers within the state of São Paulo can register to receive Metha, and there is a plan to serve the states of the Center-West region and Rio de Janeiro, too.

International plans

The CEO of Eco Panplans said they have targeted the international market to license the technology used in the company. Last October he showcased the technology in one of the world's largest innovation shows, Gitex Global, in Dubai, United Arab Emirates . They were selected to participate in the show by the Brazil-China Socio-Cultural Institute.“The Arab market really interests us because of their strong oil and gas industry, and they have everything to do with our business, which is focused on the sustainable issue of recycling,” Cardoso said.

During the show, Cardoso was approached by interested people from Saudi Arabia and the UAE. In Latin America, the business is more advanced, and Eco Panplas has already started selling its technology license to some countries across the region.

Metha's CEO is also interested in expanding the reach of his company's solution to other countries, but he has found some difficulties regarding the maturation of the legislation of each country. In South America, for example, one of the few countries that would be prepared to see a progress in Colombia. In the US, few states have the possibility of using Metha's solution.

Soares believes that the Arab countries still lack the regulatory openness for a business like Metha.“Despite a huge potential for generating solar power, they still lack some regulatory maturation,” Soares said.“Some US investors already participate in Metha, but we would be very pleased to do business with the Arab investors, who can see the world from another perspective of evolution and velocity,” Soares said.

Reportagem de Rebecca Vettore, especial para a ANBA

Translated by Guilherme Miranda

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