Brazil can meet the objectives of the Paris Agreement. The Deep Decarbonisation Scenario (DDS) developed in this research highlights how the country can lower its emissions to 1.0 Gt CO2eq in 2030 in order to meet the revised NDC objectives presented at COP26 of 1.4 GtCO2eq and achieve net-zero emissions by 2050, without any major breakthrough or using disruptive technologies.
The main features of the trajectory are a radical reduction in deforestation rates and an increase in the numbers of carbon sinks, mainly achieved through an effective command and control policy and complementary mitigation initiatives in other sectors due to carbon pricing policies from 2021.
Economy-wide deep decarbonization pathway
Command and control policies combined with constraining the access of farmers and ranchers to public credits (subject to compliance with environmental laws and regulations) help achieve 59% of total GHG emissions reductions up to 2050, through sharply reducing the annual deforestation rate.
The carbon pricing policy can help achieve 30% of total cumulative avoided emissions up to 2050 in different sectors: AFOLU (18%), Transport (6.5%), Industry (4%), and Energy supply (1%). Carbon prices are introduced through a cap-and-trade scheme in industry, and a carbon tax on GHG emissions resulting from the combustion of fossil fuels in other sectors. They grow linearly, reaching 25 USD/tCO2eq in 2030 and 65 USD/tCO2eq in 2050. They will be neutral from a fiscal perspective, with 100% of the revenues recycled back into the economy through reductions in labour charges, and in order to compensate low-income households for the average increase in prices.
Billion $ USD (2015)
Emissions per capita
GDP Carbon intensity
tCO2e/Bn USD$ 2015
CO2 emissions from combustion
(1) except electricity
GHG and gases breakdown, sinks
(1) without energy & IPPU
(2) Non-CO2 for Energy, N2O – CH4 – HFC – PFC – SF6 – mix
(3) forest and all other fluxes
A deep decarbonization pathway for power generation
Historically, power generation in Brazil involves renewable sources. The installed capacity of the SIN (national grid) is mainly made up of hydropower plants distributed in different regions throughout the country. Numbers of wind farms have been growing in recent years, mainly in the north-eastern and southern regions. Thermopower plants, generally located close to the main consumption sites (south-eastern and southern Brazil), play an important strategic role – they contribute to the security of supply. Therefore, the power mix was already a very low-carbon mix: 36 kgCO2eq/MWh in 2020.
The DDS is based on already available technologies, and no carbon capture and storage system is envisaged.
Renewable energies such as hydro, wind energy and photovoltaics are the main sources for expanding their installed capacity and power generation facilities. By 2050, all thermopower plants will be decommissioned – made possible by making increasing use of hydropower generation and batteries to ensure grid operation flexibility. This will enable Brazil to have among the most decarbonised power generation in the world – approximately 2kgCO2eq/MWh.
Carbon intensity of electricity
Power Generation capacities
Power generation production
Climate transition performance and scenario alignment of electric utilities companies
The four companies assessed under the ACT EU methodology obtained scores of between 9 and 17, for an average performance score of 14/20, between C to A, for an average narrative of B, and an average trend score of “-. “Overall, the three companies obtained similar scores above the 15/20, indicating that the panel is relatively homogeneous and presents a high level of maturity in terms of its low carbon transition.
- All companies have defined medium- or long-term science-based targets, and these targets are aligned with the DDP decarbonisation pathway proposed and used as a background scenario for this experimentation. Moreover, companies are on the right track to achieving those targets.
- All companies present a five-year trend for reducing the intensity of their past and future emissions.
- Most companies have decommissioned or planned to decommission their thermoelectric plants and are investing in non-hydro renewable energy sources such as solar, wind, and biomass. Three out of four companies will not exceed their carbon budget if their decommissioning timeline is maintained.
- All companies are investing in power-generation technologies to mitigate climate change. Still, for three out of four companies, the percentage of investment in non-mature technologies is below the industry benchmark or is not disclosed.
- For all companies, responsibility for climate change lies at the highest level of decision-making within the company structure. Committees and high-level management overseeing climate change issues have high expertise in the science and economics of climate change.
- Most of the companies have conducted tests of climate change scenarios, removed fossil fuel power incentives, and added monetary incentives for managing climate change issues. Although all the companies have integrated best management practices and actively implemented decarbonisation actions, they do not have sufficiently detailed transition plans.
- All the companies publicly support the fight against climate change; still, they need to better communicate their internal policies on engagement with trade associations around climate issues.
- Only one company out of four is developing a business model as a large-scale low-carbon electricity generator to align with a low-carbon future and meet future electricity needs.
Performance modules scores
Quantitative indicators scores
Brazil, Electric Utilities companies : Average Performance modules and quantitative indicators scores.
Note: Average scores calculated for a sample of four leading Brazilian companies from the sector.
Although Brazilian companies from the sector have historically focused on hydraulic generation, it is noticeable that these companies have been investing in other renewable sources that gained maturity a few years ago, such as solar and wind power. In general, companies have decommissioned their thermoelectric plants, or decommissioning is being discussed or is planned.
Companies assessed are still on a decarbonisation pathway that is compatible with the Paris Agreement. Nevertheless, they need to decommission their thermoelectric plants at the pace needed to adhere to their GHG reduction targets. Another urgent and fundamental step is to develop business models aligned with a low-carbon economy and future electricity needs, and build more coherent and consistent transition plans.
A deep decarbonization pathway for cement production
Cement and clinker consumption are expected to grow in the DDS by 2050 following population and GDP increases, but less rapidly than in the current trend, mostly due to an expected increase of cement price.
The decarbonisation of production is based on technologies with a high level of technological readiness and high potential for reducing GHG emissions. The different mitigation options considered are: a change in process, energy efficiency measures, fuel replacement and clinker replacement. Additional innovative energy efficiency measures, demand-side measures and carbon and storage technologies are not considered.
(1) Final heat
(2) industrial process calcination emissions
(3) Energy Consumption Emissions
(4) On-site CCS U net
Climate transition performance and scenario alignment of cement companies
The four companies assessed under the ACT Cement methodology obtained scores of between 3 and 10, for an average performance score of 6/20, between D to B, for an average narrative of C, and a trend score of “-“ as all companies presented a negative trend. Overall, companies obtained low scores, indicating that the panel is not yet transitioning towards a low-carbon economy.
The public information gathered was not sufficient to accurately assess all modules of the methodology. The result is significant data gaps and a low score for the sector.
Overall, one company outperforms the other two in the assessment; still, until the 2019 base year of the assessment, none of the companies had disclosed or defined any mid- or long-term GHG reduction targets, nor had they published any data related to the achievement of previous targets. Therefore, it was impossible to evaluate the alignment of companies’ strategies with the decarbonisation pathway for the sector or calculate their theoretical carbon budget for 2050.
The sector also lacks efforts for engaging suppliers and clients to reduce their GHG emissions.
Performance modules scores
Quantitative indicators scores
Brazil, Cement companies : Average Performance modules and quantitative indicators scores.
Note: Average calculated for a sample of three companies from the sector, including the sector’s leading company.
Companies from the sector are not disclosing sufficient and relevant information that lends credibility to their climate commitments. Companies must address this lack of transparency as an essential element of their low-carbon journey.
Most companies have implemented actions to promote the reduction of their emissions associated with cement production, such as clinker substitution, using alternative fuels, and integrating circular economy practices. Still, these separate actions do not constitute structured business models aligned with the needs of the future low-carbon economy.
Although one of the companies has factored climate change challenges into their management structure, and a second company has started this process, none of them have integrated climate change issues into their core business strategy. More substantial efforts are necessary for these companies to develop low-carbon strategies and support transition plans consistent with the Paris agreement mitigation goals.
A deep decarbonization pathway for AFOLU
Brazil is a forest country with nearly 500 million hectares (Mha) of forests (about 50% are Protected Areas). Agricultural land accounts for about 263 Mha, including temporary and permanent crops, forest plantations, and pastureland. The Agriculture, FOrestry and Land-Use (AFOLU) sector accounted for the primary source of emissions in 2019, with about 61% of national net emissions. Annual deforestation is responsible for the most current emissions, while current protected areas and forests play a crucial emission absorption role.
The DDS introduces significant changes in the annual deforestation rate, achieving zero illegal deforestation in the Amazon by 2050, increasing protected areas, and restoring native forests (public and private areas). Sustainable practices in land management are expected to be adopted and livestock systems will be intensified. This will maintain emissions from livestock and agricultural practices at around the same order of magnitude over time, allowing deforestation and land use emissions to go down sharply while carbon removals almost double.