Brazil unveils route to industrial decarbonization by 2050 at COP28
DUBAI, 2 December 2023 – Today at COP28, Brazil’s Ministry of Development, Industry, Trade and Services and UNIDO presented the main findings of a preliminary roadmap that will support the country’s industries to decarbonize, starting with the steel, cement and chemical sectors.
Brazil is aiming to reach net zero by 2050. But in 2020, the country emitted 2.16 billion gigatonnes of CO2e. These emissions will continue to increase if significant action is not taken.
One of the pieces in the puzzle is Brazilian industry, which accounts for more than 30% of Brazil’s energy consumption and around 5% of its CO2 emissions. Decarbonizing industry is a complex but necessary task. And this is where Brazil’s new Preliminary Industrial Decarbonization Roadmap comes in.
“The roadmap aims to support industries to find the best, most cost-effective way to achieve net zero,” says Gustavo Fontenele, General Coordinator of Decarbonization at the Ministry of Development, Industry, Trade and Services (MDIC) in Brazil. “We have a lot of pieces that are moving really fast in the country. We have the NDC [Nationally Determined Contributions] implementation strategy… we have private-sector national net-zero targets and we have a sectorial national target for the industrial sector.
“All those three pieces need to be one. And that’s exactly where the preliminary roadmap fits – it will serve as the best common denominator that puts all the solutions in a single place. It is a strategic tool for the Brazilian Government, and it is also a great way to bring awareness to industries in this country.”
Listening to diverse industry needs
The roadmap focuses on what needs to happen in three key areas – technology, financing and policy – to encourage Brazil’s industrial sectors to decarbonize. The preliminary version focuses on the most hard-to-abate sectors: steel, chemical and cement. Together, these sectors account for 34% of industrial CO2 emissions.
Throughout 2023, the MDIC and UNIDO held workshops with industrial associations from the three sectors to better understand what each needs to decarbonize. In-depth interviews with ten industry representatives followed. This insight has been vital to developing a preliminary roadmap that reflects the reality of life within Brazilian industry.
“These sectors are very well structured. Some of them already have their own decarbonization roadmaps and ideas, and have views on what will be interesting for them,” says Clovis Zapata, Head of the UNIDO office in Brazil. “This helps us to match the efforts that we need to take forward with what these industry bodies have already studied and prepared.”
Gusatvo adds: “One of the key functions of the roadmap is to find common ground through the industry associations…Brazil is a very complex economy in terms of its industry. We have sub-sectors in industry that are already well positioned to reach net zero, but other sectors need a lot more support.”
In mid-November, the three sectors came together to validate the preliminary roadmap. It has also been put before Brazil’s Low Carbon Industry Technical Committee on which key officials from across government departments sit alongside major industry players. Planning for a follow-up technical support programme on industrial decarbonization for some sectors is already underway and should be fully operational by 2025, the same year Brazil hosts COP30. More industrial sectors will be invited to contribute to the roadmap in the next stage.
The estimated investment needed to decarbonize Brazil’s entire industrial sector by 2050 is between US$9.3 and US$21 billion. A focus on climate finance will be crucial, otherwise companies will not be able to make the changes they need to get to net zero.
“Climate finance is a great way to implement climate policies and to drive the private sector towards low carbon and net zero in ways that are feasible,” says Gustavo. “We’re talking about very diverse industrial sectors…so it’s really important to bring in a climate finance approach that could be called No One Industry Left Behind.
“Although Brazil has already some very interesting instruments, for instance the Green National Climate Fund and the Environmental National Fund, we need to think in a broader way and bring in some international solutions to the country and to the companies.”
Identifying the right technologies and policies for industry
The preliminary roadmap has identified technologies and workable solutions in five key areas: energy efficiency, renewable energy, material efficiency, low carbon fuels, feedstocks and energy sources and carbon capture, utilisation and storage (CCUS).
Gustavo says: “It is too early to choose specific technologies per sector …but nonetheless, the great work that UNIDO has been doing with the Ministry is already pointing to some of the technologies that might be more cost effective [for individual sectors]. For instance, CCUS is a quick win for the cement industry. But there are many technology gaps, and every single sector in the country has its own reality, and these realities might be very different.”
The preliminary roadmap also outlines policy changes that need to be made to support industrial decarbonization, such as the need for government-backed incentives to encourage companies to reuse and recycle materials so there is less reliance on higher emission primary materials.
A blueprint for industrial decarbonization
Brazil’s industrial decarbonization roadmap will be finalised by the end of 2023 and will serve as a blueprint for other countries.
“Brazil has a tremendous amount of renewables in its energy matrix, and because it has so many natural resources it means that the path [to industrial decarbonization] will in some respects be easier,” says Clovis. “This means it could be the great example of industrial decarbonization for the world. Many countries, not only the region but around the world, are facing exactly the same problems …All the policies and all the measures that are and will be implemented in Brazil will serve as a model to other middle-income countries, and to lower-income countries that want to follow a more balanced, sustainable development model.”
Gustavo adds: “Brazil is a country that considers seriously other countries and is really closely connected with other countries. We cannot think about Brazil in an isolated way because it does not make any sense. This roadmap provides a great opportunity to become a beacon to other countries. The roadmap, it is our business card. It shows that Brazil is here, and it is doing the very best that it can.”
The process to develop Brazil Preliminary Industrial Decarbonization Roadmap was funded by the UK’s Department for Energy Security & Net Zero. The main findings were presented at a COP28 event to celebrate the launch of the Brazil-UK Industrial Decarbonisation Hub (IDHub) – a Brazil-UK convened multilateral assistance platform that will support Brazil’s industrial decarbonization.