Discover how Brazil, Latin America’s largest economy, is revolutionising its energy sector by shifting from fossil fuels to renewable solutions. This comprehensive analysis explores Brazil’s journey towards energy independence, its pioneering role in green hydrogen, and the challenges that lie ahead in its ambitious clean energy transformation.
Brazil’s energy sector is characterized by a diverse mix of sources, including coal (4.6%), oil (35.7%), natural gas (10.5%), and uranium (1.3%). In 2023, there was a noticeable reduction in the use of non-renewable energy for domestic purposes, with uranium being the sole non-renewable resource to see a slight increase (0.1%) compared to 2022. Despite Brazil’s significant reliance on renewable energy, about 12.4% of its energy still comes from non-renewable sources.
The country’s nuclear power sector remains underdeveloped, with only one operational plant contributing a modest 1.3% to the electricity supply. Limited domestic uranium resources further constrain its growth potential. Although Brazil has some coal deposits, it relies heavily on imported, often low-quality coal, which exacerbates air pollution issues. The nation has an estimated 7.2-7.3 billion tons of coal, but imports are crucial to meet energy demands. Brazil also taps into domestic oil reserves but still depends on imports to satisfy total demand. Oil mainly fuels transportation and specific industrial activities, with domestic production meeting approximately 44.2% of the country’s energy needs.
The energy landscape of Brazil has transformed dramatically since the 1970s, when fossil fuels like oil and wood were predominant, accounting for over 90% of energy use. Today, the shift towards renewables such as biofuels, wind, and solar power, along with natural gas and nuclear energy, has significantly reduced the share of oil and wood to around 40%. This shift was driven by urban migration and proactive government policies supporting renewable energy development. Consequently, Brazil now boasts one of the cleanest energy sectors globally, with renewables contributing nearly 48.5% of the total energy supply as of 2020, leading to a lower carbon footprint compared to the global average.
Brazil’s population, approximately 217 million, shows a declining dependency on non-renewable energy, with non-renewables playing a reduced role in electricity production and a greater role in industrial processes. The country has undertaken rigorous policy measures to shift away from non-renewable energy sources, closely linked to its Amazon conservation efforts.
The energy sector is regulated by several bodies: the Ministry of Mines and Energy (MME), which oversees national energy policies and regulations; the National Agency of Petroleum, Natural Gas, and Biofuels (ANP), which regulates the oil and gas sector; and the National Electric Energy Agency (ANEEL), responsible for the electricity sector. These agencies set rules for resource management, encourage renewable investments, and promote energy conservation.
In 2022, hydropower remained the dominant source of electricity, providing over 50% of Brazil’s power. Renewable sources, including wind, sugarcane ethanol, and biomass, contributed more than 20% of electricity generation. However, Brazil’s heavy reliance on hydropower makes it vulnerable to droughts and climate change impacts on water availability. Upgrading the electricity transmission network is crucial for integrating more renewable sources and expanding access. Balancing sustainable resource extraction with energy demands requires careful planning and policy development.
Brazil is also emerging as a key player in the global green hydrogen market, leveraging its abundant renewable energy resources to produce hydrogen with minimal carbon emissions. With significant investments in wind and solar power, the country is well-positioned to develop large-scale hydrogen production for both domestic use and export. Several pilot projects and partnerships with international energy firms are underway, aiming to establish Brazil as a major supplier of green hydrogen, particularly for European and Asian markets. This shift towards hydrogen aligns with Brazil’s broader strategy to diversify its clean energy portfolio and reinforce its leadership in sustainable energy solutions.
