The challenges of the Brazilian energy transition

GNPW, Os desafios da transição energética brasileira
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A pioneering report, prepared in collaboration between the Brazilian Center for International Relations (Cebri), the Inter-American Development Bank (IDB), the Energy Research Company (EPE) and the Center for Energy and Environmental Economics (Cenergia) at Coppe/UFRJ , highlights the challenges that Brazil faces in the energy transition to achieve carbon neutrality by 2050.

Brazil, which has already made considerable progress in the energy transition, needs to adopt new technologies and energy vectors to reach the ambitious goal of net neutrality in greenhouse gases (GHG) by 2050. The research points to the urgency of a radical transformation in emissions resulting from changes in land use and deforestation. The lack of an effective solution for illegal deforestation by the end of this decade makes the goal of GHG neutrality by 2050 unfeasible, as envisaged by Brazil in the Paris Agreement.

The study presents three energy transition scenarios by 2050 – “Transição Brasil”, “Transição Alternativa” and “Transição Global” – each one of them exploring different emission mitigation strategies to achieve carbon neutrality in the country. Each scenario is based on different assumptions about the evolution of public policies, social consensus, business and consumer behaviors, and the development and diffusion of new technologies.

Despite having an energy matrix that is already quite advanced, with around 50% of its primary energy coming from renewable sources, Brazil’s decarbonization trajectories over the next 30 years suggest a different dynamic for the energy matrix of the last three decades, bringing new challenges and opportunities.

The proposed decarbonization scenarios include structural changes in energy supply and demand sectors, as well as in land use, to achieve climate neutrality in Brazil in 2050. For the “Transição Brasil” and “Alternative Transição” scenarios, approximately 30 billion tons of CO2 equivalent, while in the “Global Transition” scenario, the effort to mitigate emissions would be even greater, reaching around 40 billion tons of CO2 equivalent.

To achieve GHG neutrality by 2050, CO2 emissions, the main GHG, need to become negative around 2035-2040, ie a decade before the GHG neutrality target. In the three decarbonization scenarios, CO2 emissions become negative around 500 million tons, underlining the magnitude of the challenge.

In addition, the research highlights the need to review and even create regulatory frameworks for the energy transition, as well as the demand for development, scale and competitiveness of new technologies and infrastructure.

Thiago Barral, president of EPE, highlighted the relevance of the “Energy Transition Program”, stating that it contributes to the formation of consensus on dilemmas, uncertainties, challenges and opportunities for stakeholders and society as a whole. Morgan Doyle, representative of the IDB Group in Brazil, reiterated the IDB’s commitment to continue technically and financially supporting Brazil’s energy transition efforts.

The report also warns of significant costs, which could reach US$3.4 trillion, if Brazil fails to eliminate illegal deforestation. If that happens, the country will have to offset its emissions by becoming a buyer of carbon credits instead of a seller. The study calculates that eliminating illegal deforestation could prevent the emission of 21 billion tons of greenhouse gases by 2050.

Brazil’s emissions profile is quite different from the global profile. While the energy sector represents 76% of total greenhouse gas emissions in the world, in Brazil this sector represents only 31% of net emissions and 18% of gross emissions, due to the high index of renewable sources in the country’s energy matrix.

Rafaela Guedes, senior fellow at Cebri, highlighted the importance of nature-based solutions for carbon removal. According to her, Brazil has 20% of the best opportunities for these solutions. One of the priorities for the 2020-2030 decade should be to take advantage of this potential, generating value from standing forests, reconciling the climate and social agendas.

The report also addresses the evolution of the Brazilian energy matrix in the coming decades. It is estimated that the demand for primary energy will increase from 268 million tons of oil equivalent (toe) in 2020 to around 400 million toe in 2050. On the other hand, there will be a decrease in the use of fossil fuels and an increase in the use of renewable sources, mainly advanced biofuels.

The survey indicates that the share of renewable sources will exceed 70% of the primary energy matrix. In the three scenarios analyzed, by 2030, ethanol and biodiesel, conventional biofuels, will represent the largest share of bioenergy supply. However, from 2040 onwards, advanced biofuels, such as green diesel, aviation biokerosene, green gasoline and biofuels for marine use, gain prominence as the main vectors for replacing fossil fuels.

Finally, the study highlights the rapid growth in demand for electricity in the coming years. This will be fueled mainly by sectors such as transport, with the electrification of vehicles, and industry, with greater electrification of processes. The forecast is that electricity demand will nearly double by 2050, reaching 1,000 TWh.

The report also foresees a great diversification in the generation of electric energy. Hydroelectric power, which has historically been the backbone of power generation in Brazil, will see its share gradually reduced. In contrast, solar and wind power generation is set to increase substantially. The report estimates that wind energy could provide up to 24% of Brazil’s energy by 2050, while solar energy could provide 20%.

In addition, the research highlights the need for investments in energy transmission and distribution networks, as well as in energy storage technologies, to deal with the growing share of intermittent renewable energy sources in the energy matrix.

In terms of public policies, the report recommends that Brazil promote energy efficiency, diversify its energy matrix, invest in energy infrastructure and promote the development of low-carbon technologies. He also suggests the need for greater integration of energy and climate policies, as well as the adoption of a more holistic approach to the energy transition, which considers economic, social and environmental aspects.

In conclusion, the study reinforces the need for Brazil to position itself as a global leader in the transition to a low-carbon economy. This will require the adoption of ambitious policies, the development of new technologies and a major transformation in its energy matrix. However, the report also emphasizes that this transition can bring great benefits to the Brazilian economy and society, including job creation, increased competitiveness and improved health and quality of life for the population.


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