Latin America has established itself as one of the regions with the highest participation of renewable sources in the global energy matrix. With a strong presence of hydropower and rapid growth in wind and solar energy, the region stands out compared to other continents in its transition towards a low-carbon economy. However, despite these advancements, achieving carbon neutrality by 2050 remains a significant challenge.
Dependence on fossil fuels in some sectors, lack of regional integration, and the high investments required make the Net Zero goal, at best, a difficult objective to achieve within the timeframe set by the Paris Agreement.
The Race Against Time
The UN defines Net Zero as reducing carbon emissions to a residual level that can be absorbed by nature or through carbon capture technologies. The transition to a carbon-neutral world requires a profound transformation in how humanity produces, consumes, and moves. Since the energy sector is responsible for about 75% of global greenhouse gas emissions, replacing fossil fuels with renewables is key to preventing the worst effects of climate change.
However, the commitments made by governments are still insufficient. According to UN data, national climate plans would result in only a 2.6% reduction in global CO₂ emissions by 2030, while a 43% cut is needed in the same period to keep global warming within the established limits.
Moreover, the recent withdrawal of the United States from the Paris Agreement adds another obstacle to the global decarbonization process. The decision of the world’s largest economy, one of the biggest CO₂ emitters, may slow down the energy transition movement, especially in Latin America, where U.S. trade sanctions and political positioning directly influence the market.
Brazil Leads the Region, but Investments Are a Barrier
Brazil stands out as the largest energy market in Latin America, accounting for about 50% of the region’s installed capacity. The country has a highly renewable energy matrix, with 50% of its installed power coming from hydroelectric plants, while wind and solar account for 15% and biomass 5%. In total, approximately 60% of the country’s electricity generation is already renewable. This places Brazil in a privileged position for energy transition, but the challenge of achieving carbon neutrality remains significant.
According to BloombergNEF projections in the New Energy Outlook 2025, Brazil would need investments of $6 trillion to reach Net Zero by 2050. This amount must be allocated to various initiatives, with electrification being one of the main pillars, responsible for 55% of expected CO₂ reductions. The second key measure is increasing clean energy usage, representing 10% of the progress, followed by carbon capture and storage, accounting for 9%.
Comparatively, the global scenario is even more challenging. The 2024 BNEF report indicated that, to achieve economic transition to Net Zero, electrification accounts for only 15% of efforts, while clean energy adoption reaches 68%. To enable this transformation, total global investments of $215 trillion would be required by 2050.
A Heterogeneous Latin America in Energy Transition
Despite its strong renewable base, Latin America faces challenges in energy transition due to disparities among its countries. While nations like Uruguay, Chile, and Colombia advance with decarbonization plans, others, such as Mexico and Argentina, remain heavily dependent on hydrocarbons.
Mexico, for instance, has set a target to halve its emissions by 2050 but struggles due to its reliance on natural gas. Argentina, deeply tied to oil and gas, faces economic and political barriers to implementing a more aggressive transition to renewable sources.
Given this scenario, analysts point out that Latin America is unlikely to achieve Net Zero by 2050. The region would need massive investments to enable this shift, alongside overcoming regulatory and political hurdles that have historically hindered long-term energy policies.
The Role of Energy Integration
A potential solution to accelerate energy transition in Latin America is the integration of regional electricity systems. Connecting countries would enable a more efficient energy exchange, ensuring greater supply stability and reducing dependence on thermal generation.
Successful examples already exist, such as the binational Itaipu hydropower plant, shared by Brazil and Paraguay. Other connections, such as the interconnections between Brazil and Argentina and between Ecuador, Peru, and Colombia, also indicate that integration could be a viable path.
However, technical, physical, and regulatory challenges still prevent greater electrical interconnection between countries in the region. While Europe has progressed in this regard by creating a common energy market, Latin America remains far from such a scenario. The disparity between regulatory frameworks and the complexity of required investments make this process slower and more complicated.
Emerging Technologies as a Solution
Beyond interconnection, adopting new technologies is seen as essential to ensuring the stability of the renewable energy matrix. Energy storage is one of the main challenges, as the intermittency of wind and solar sources requires solutions that guarantee reliability in the system.
Artificial intelligence also plays a crucial role in optimizing power grid management. Advanced algorithms are already used to predict consumption patterns, improve distribution efficiency, and minimize transmission losses. Applying these technologies can accelerate energy transition and enhance security in electricity supply.
Paths for the Future
Latin America already has a solid foundation for energy transition, but the challenges to achieving carbon neutrality by 2050 are immense. Despite significant progress in some countries, the region still lacks robust policies and large-scale investments to consolidate a clean and secure energy matrix.
As the region’s largest market, Brazil plays a fundamental role in this process. With abundant natural resources and an already predominantly renewable matrix, the country can lead Latin America’s transition and attract investments in energy storage and green hydrogen.
However, the path to 2050 will depend not only on national decisions but also on regional cooperation and global commitment to decarbonization. Meanwhile, time continues to run, and the planet keeps getting warmer.
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