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Navigating Brazil's path

to a just energy transition

Maria João C. P. Rolim
Vivian Marcondes de Oliveira

The global shift from fossil fuels to cleaner energy sources, implementing carbon pricing mechanisms; and establishing
known as "Energy Transition," is a pivotal movement in the strong and supportive regulatory environments.
fight against climate change. At its core lies the concept of
a just transition, which seeks to harmonize decarbonization In recent years, Brazil has demonstrated political
efforts with the development of a more equitable, secure commitment and strengthened institutions, creating an
and sustainable energy system. ecosystem conducive to energy transition. Key policy
instruments include the Ecological Transformation Plan
Brazil stands at the forefront of this transition, boasting (Plano de Transformação Ecológica - PTE, in Portuguese),
a well-balanced energy matrix that combines renewable the Industrial Deep Decarbonization Initiative and the Low
and non-renewable sources. According to the 14th annual Carbon Hydrogen Bill of Law.
report by the World Economic Forum, the “Fostering
Effective Energy Transition 2024”, Brazil ranked 12th in the Launched at COP28, the PTE is a proposal from the Global
Energy Transition Index, ahead of nations like the United South (developing or emerging countries) to promote
Kingdom (13th), China (17th) and the United States (19th). sustainable development and rethink globalization. With
This index evaluates 120 countries on the performance an estimated annual cost between USD 130 billion and
of their current energy systems, focusing on equity, USD 160 billion, the plan aims to stimulate investments
environmental sustainability and energy security, as well as that enhance the environment and reduce inequalities. The
their readiness for transition. proposal includes establishing a regulated carbon market,
creating technological innovation centres in universities,
Brazil is uniquely positioned for success. With its domestic expanding forest concession areas, electrifying bus fleets,
energy endowment, potential for developing disruptive promoting recycling and executing public works to mitigate
technologies, such as green hydrogen, and stable natural disaster risks.
democracy with strong energy sector regulations, Brazil
has attracted significant investment. In 2023, the country The Industrial Deep Decarbonization Initiative addresses
invested USD 34.8 billion in renewable energy initiatives, challenges in the so called hard to decarbonize sectors like
carbon capture, green hydrogen and electric vehicles, as cement, steel, aluminum and petrochemicals. It prioritizes
reported by BloombergNEF's “Energy Transition Investment social safety nets, community engagement and workforce
Trends”. However, challenges such as developing skilled reskilling, ensuring that economic growth aligns with
labour, fostering innovation, building robust infrastructure environmental sustainability and social justice.
and enhancing resilience to climate disasters remain.
As for the newly approved Low Carbon Hydrogen Law
Despite each country following a unique energy transition in Brazil, also known as Law No.14.948/2024, it marks a
path, as stated by the World Economic Forum, they share significant step towards Brazil's green reindustrialization
common goals, such as: enhancing energy security through as it establishes essential nomenclature for the national
diverse energy and electricity mixes; as well as, diversifying hydrogen market, differentiating types of hydrogen based
import partners; improving energy and carbon intensity; on energy sources and emissions, as well as introduces
increasing the share of clean energy in the fuel mix; crucial economic incentives to boost this emerging industry.

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