18 September 2024, London – As this year’s G-20 President and the host of COP30 in 2025, Brazil has a historic opportunity to lead the global transition to a low-carbon economy. Yet meeting the country’s large-scale ambitions will require significant investment in multiple technology pathways, BloombergNEF (BNEF) finds in its first Brazil Transition Factbook.
According to the report, which was produced by BNEF and commissioned by Bloomberg Philanthropies, Brazil’s energy-related emissions need to fall 14% by 2030 from 2023 levels and drop 70% by 2040 to be aligned with BNEF’s Net Zero Scenario, which charts a pathway to net-zero emissions by 2050 while keeping global warming well below 2C.
Brazil is already a top global destination for renewable energy investment – it attracted nearly $35 billion in 2023, the sixth-highest figure globally and the highest among emerging markets outside of China. Brazil is also the world’s third-largest wind and solar market, having commissioned a record 5 gigawatts of onshore wind projects in 2023 and brought 16 gigawatts of solar capacity online that same year.
However, to keep on track for net zero, Brazil will need to invest over $1.3 trillion in its low-carbon energy supply across 2024-2050, including $0.5 trillion in renewables. This figure represents a significant opportunity for private-sector investment, and includes the power needed to supply clean energy for the electrification of end-use sectors such as transport, buildings and industry. This electrification plays a large role in Brazil’s decarbonization path, accounting for 53% of emissions avoided between today and 2050, compared with a no-transition scenario where there is no further action on decarbonization. In addition, demand-side energy investment and spending reaches $4.3 trillion in the Net Zero Scenario, mainly led by purchases of electric vehicles.
Other findings of the Brazil Transition Handbook include:
- Brazil is a critical source of transition metals. The country ranks third globally in BloombergNEF’s assessment of transition metals reserves. It also holds more than 15% of global reserves for five key strategic minerals: graphite, iron ore, rare earths, nickel and manganese.
- Brazil is a potential market for green hydrogen production. In August 2024, the country passed its eagerly anticipated clean hydrogen law, with BNEF estimating the country could produce the lowest-cost green hydrogen globally.
- Biomass creates an opportunity for a clean steel industry. BNEF projects Brazil could have the cheapest net-zero-emissions steel globally come 2030, thanks to abundant availability of biomass and very low electricity prices.
- Biofuels play an important transition role. Electric vehicles are set to grow in the country, but biofuels are essential in the short term. Both technologies are potential ways to reduce emissions from one of the largest passenger-vehicle markets globally.
- Brazil is getting real about its sustainable finance taxonomy. The country already has a voluntary industry-led taxonomy in place. Brazil and the UK are the only jurisdictions beyond the EU that plan to make reporting compulsory once their green frameworks are out. Brazil is the region’s leader in sustainable finance policy, with as many as 34 policies targeting corporations and banks.
- Brazil’s major companies have set ambitious emissions targets. The 10 largest Brazilian companies with net-zero emissions goals will collectively need to slash their emissions by 177 million metric tons of CO2 equivalent annually.
- Brazil could be the model country for nature-driven climate mitigation. Between 2024 and 2050, the country could collectively create nature-based carbon offsets for up to 30.5 gigatons of CO2 equivalent. This is more than the next three largest countries combined. The dominance of Brazil’s supply means that any changes to fundamentals in the country could have ramifications on global demand and prices for credits.
Luiza Demoro, Global Head of Energy Transitions at BloombergNEF said, “There is a spotlight on Brazil as this year’s G-20 President and the host of COP30 in 2025. With abundant natural resources and immense potential in clean energy, climate and nature sectors, the country is uniquely positioned to help drive global decarbonization efforts. However, to harness this opportunity and unlock capital flows at scale, Brazil must urgently develop, enact and implement robust policies and regulations, while addressing market barriers. “
The next few years will be pivotal as the world looks to tackle climate change, and Brazil faces a unique opportunity to take a leading role in this fight.
The link to read the full report can be found here.
Contacts
BloombergNEF
Oktavia Catsaros
ocatsaros@bloomberg.net
About Bloomberg Philanthropies
Bloomberg Philanthropies invests in 700 cities and 150 countries around the world to ensure better, longer lives for the greatest number of people. The organization focuses on creating lasting change in five key areas: the Arts, Education, Environment, Government Innovation, and Public Health. Bloomberg Philanthropies encompasses all of Michael R. Bloomberg’s giving, including his foundation, corporate, and personal philanthropy as well as Bloomberg Associates, a philanthropic consultancy that advises cities around the world. In 2023, Bloomberg Philanthropies distributed $3 billion. For more information, please visit bloomberg.org, sign up for our newsletter, or follow us on Instagram, LinkedIn, YouTube, Threads, Facebook, and X.