Brazil has no defined plan to give up oil – 02/24/2024 – Environment

At the end of January, the Minister of Mines and Energy, Alexandre Silveira, signed a cooperation agreement with the International Energy Agency to accelerate the energy transition in the country and the world. Brazil, however, still does not have a target date for giving up fossil fuels.

Despite having assumed with the UN (United Nations) the objective of zero net greenhouse gas emissions by 2050, the country has not even defined intermediate deadlines for reducing the use and production of these energy sources.

The Brazilian climate target (known as NDC, an acronym in English for nationally determined contribution), for example, outlines emissions cutting scenarios for the entire economy, without addressing deadlines for specific sectors.

Furthermore, the Climate Plan (National Plan on Climate Change), which should guide actions to combat the climate crisis, is outdated. Launched in 2008 — long before the 2015 Paris Agreement —, the document provided for actions until 2017 and was never updated. A new plan is being drawn up by the federal government, but it should only be launched in 2025.

During the last World Economic Forum, minister Alexandre Silveira said he was betting “that oil will still be an important energy source in 20 to 30 years”. This perspective, however, is not officially part of a Brazilian goal.

“There is no one who can say how long it will take for the energy transition to take place effectively,” he also stated in Davos.

In this scenario, says Natalie Unterstell, president of the climate think tank Instituto Talanoa, “our policy today is not one of energy transition.” “It is still, mainly until 2030, an expansion of these fuels.”

She highlights that the New PAC demonstrates this disparity. Most of the R$565.4 billion foreseen in the program’s transition and energy security axis is destined for dirty fuels: 64% of the total should go to the oil and gas industry, while only 12% to the generation of clean energy .

Furthermore, under the program, the vast majority of resources for oil and gas must come from the State, while all of the funds foreseen for renewables would come from private sources.

“There is rhetoric about the energy transition, but there is no resource, no investment strategy”, says the expert.

Fossil fuels are the main source of greenhouse gas emissions in the world. The energy sector (which comprises, among other things, transport and electricity) accounted for 75% of all carbon released into the atmosphere in 2020.

In Brazil, the main sources of emissions are deforestation and agriculture, with energy occupying third place.

This happens because Brazilian electrical energy comes mostly from renewable sources (87% in 2022, according to data from the Energy Research Company). This index drops to 47% when looking at the energy matrix as a whole — but it is still much higher than the global averages.

On the planet, only 28% of electricity and 15% of the total energy matrix came from renewable sources in 2021, according to data from the International Energy Agency.

However, Brazil is currently eighth in the world in oil production, 27th in gas and 29th in coal — and plans to go further. The Brazilian energy plan foresees that oil production will grow by 63%, and gas production, by 124% between 2022 and 2032, according to a 2023 report.

“It’s a Brazilian contradiction, because Brazil is making good progress in the electrical matrix, but it also doesn’t want to commit to abandoning fossil fuels”, says Ricardo Baitelo, project manager at Iema (Energy and Environment Institute).

He highlights that the advantage of having a cleaner matrix should be used to advance further on this front, instead of investing in polluting sources.

“There are already scenarios showing that Brazil could reach 100% renewable electricity generation in 2035, which is basically a mission to remove natural gas from the matrix — so much so that Brazil has 93% renewable energy at the moment”, he says, referring to a study by the Electricity Trading Chamber, which pointed to record generation of clean electrical energy in 2023.

In a note, the MME (Ministry of Mines and Energy) states that the national climate policy will be detailed in the Climate Plan and that “the energy transition is not a disruptive process, so the world will still need oil for the coming decades”.

The ministry also says that it understands that resources from oil activity are finite and must be used both to finance transition and energy efficiency projects and to maintain economic activities, such as health and education. The ministry also highlights that investments were made in biofuel expansion programs and electricity transmission auctions.

“Since 2023, the MME has been perfecting and implementing policies combined with these climate commitments, without losing sight of the fact that this process cannot compromise the country’s energy security and impose a high cost of energy on the population and the economy”, says the text .

The problem is far from being nationally exclusive, as several countries — especially those economically dependent on oil, coal and natural gas — resist committing to this type of goal.

However, other places have adopted policies that could serve as models. Spain, for example, has determined that the production of fossil fuels in its territories will cease by 2042. To ensure this happens, new exploration and production permits have been suspended, subsidies linked to fossil fuels have been restricted and the sale of combustion-powered vehicles will be banned from 2040.

Another country that has been successful is Chile, which has committed to ending coal-fired power generation by 2040 and has been closing its fossil plants even amid growing demand for energy.

In theory, this type of strategy could be contained in the new Climate Plan, which is being prepared by the Interministerial Committee on Climate Change, chaired by the Civil House and made up of 18 departments. 8 sectoral mitigation plans (emissions reduction) and 15 sectoral climate adaptation plans will be presented.

“We will have plans from all sectors, including the energy sector, to show how we want to reach these goals”, says the national secretary for climate change at the Ministry of the Environment, Ana Toni.

“It is important to say that Brazil was one of the first developing countries to assume goals for the economy as a whole, as is the obligation of developed countries. So, Brazil is ahead of many developing countries [nessa postura].”

Until 2025, however, the country remains without this comprehensive strategy to define climate measures, investments and policies, while investments in fossils continue to advance.

Unterstell points out that the argument for using profits obtained from fossil fuels to finance the energy transition makes no sense — mainly because this is not happening yet.

“It’s a big sophistry”, he says, highlighting that the sector has had record profitability since the start of the Ukrainian War, but this money was not invested in massive investments in clean energy.

“This discussion is not about justifying the opening of new exploratory frontiers to finance, in an uncertain future, the energy transition. This debate is about the present. If this argument were real, it would be happening now. All the oil companies would be taking this profit for invest in the transition and this is not happening”, he states.