Brazil Leads The Way: A Beacon For Global Clean Energy Transition With 90% Renewable Energy

Brazil stands out among the world’s largest economies for its clean energy transition, boasting the lowest share of fossil fuels in its energy mix. As the G20 president in 2024, Brazil is poised to lead the global energy transition agenda, leveraging its renewables-based power system and substantial biofuel sector. The upcoming COP30 climate change conference in Belém, near the Amazon, will highlight Brazil’s clean energy efforts on the world stage.

Brazil’s journey to becoming a clean energy leader has not been easy. Over several decades, the country faced numerous challenges, including delays in major projects, blackouts, and economic setbacks driven by both domestic and international factors. These experiences offer valuable lessons for global energy transitions and suggest ways to accelerate progress.

Hydropower, supported by Brazil’s abundant water resources and landmark projects like the Itaipu Dam, initially provided a robust foundation for the country’s electricity generation. However, reliance on hydropower left Brazil vulnerable to climate change. In 2001, low rainfall, coupled with limited investment in generation and transmission, led to blackouts and the need for electricity rationing and policy interventions to reduce demand.

In response, Brazil diversified its electricity sources, investing in wind, solar, and biomass energy. The country also expanded and modernized its grid to enhance reliability, reduce losses, and better integrate variable power sources. Regulatory measures encouraged independent power producers, and various policy instruments, including tax incentives and renewable energy auctions, spurred investments in clean energy. Between 2000 and 2022, the share of hydroelectric power in Brazil’s energy mix decreased by a third, while the overall share of renewables remained around 90%.

Brazil is also a global pioneer in biofuel production, thanks to a combination of mandates, financial incentives, and sustainability requirements. The country led global biofuel demand until the early 2000s, influencing nations like the United States and India. Currently, Brazil’s transport sector, heavily reliant on road transport, is the main consumer of fossil fuels. Ethanol blending mandates, initiated in the 1970s to reduce oil imports, have gradually increased, reaching 27% for ethanol and 12% for biodiesel, with a 15% biodiesel target set for 2026.

Decades of research and innovation have been crucial to Brazil’s biofuel success. Flex-fuel vehicles, developed in the 1990s and now comprising almost 90% of the light-duty vehicle fleet, can run on gasoline or ethanol. Brazil also leads in advanced biofuels, using agricultural residues to boost supply without expanding land use.

The New Industry Brazil policy, launched in 2024, emphasizes sustainability and innovation, aiming to increase biofuels’ share in the transport energy mix by 50% by 2033. This follows the G20’s Global Biofuel Alliance, launched in 2023 to enhance biofuel supply and demand. Brazil is also developing a Future Fuel Program to promote ethanol, biodiesel, and sustainable aviation fuel blending, and to establish frameworks for other low-emissions fuels.

International cooperation is another area where Brazil excels. The country has a history of fostering global collaboration, such as the 1992 Rio Summit. Today, Brazil’s low-emissions energy sector and large resource base position it well to develop industrial clusters with other countries, essential for achieving net-zero emissions. Brazil is collaborating with the United States to decarbonize the steel sector, with the European Union on low-emissions hydrogen, and with China on electric vehicles and batteries.

Sustainable fuels are critical for transitioning away from fossil fuels in transport and industry, complementing electrification and energy efficiency. The IEA’s Net Zero Emissions by 2050 Scenario predicts a significant increase in demand for sustainable fuels by 2030 and again by 2050. For emerging economies, increasing clean energy investment is vital for secure, fair, and affordable transitions. Brazil’s collaboration with the World Bank and the Inter-American Development Bank on a new Sovereign Sustainable Bond is a step toward structuring financing to meet its specific needs and goals.

Ensuring the clean energy transition is people-centered and addresses the needs of the most vulnerable is also essential. Brazil has implemented programs like PRONATEC and the Low-Carbon Agriculture Program to support economic development and social justice. The Ecological Transformation Plan unveiled at COP28 in Dubai, aims to foster sustainable economic development, employment, and productivity. As the world strives to meet international energy and climate goals, Brazil’s experiences and expertise in expanding the global clean energy economy are invaluable.