Brazil's fossil drive undermines Lula’s green ambitions

Brazil is looking to increase its exports of green fuels

Subsidies to fossil fuels continue to rise

The number of natural gas-powered power plants is growing

By Andre Cabette Fabio

Brazil's government has invested heavily in fossil-fuels and plans to make the country the fourth largest oil producer by 2030.

This month, President Luis Inacio Lula da Silva signed a law regulating the green hydrogen industry in the country. He will be hosting the United Nations COP30 Climate Summit next year.

Which country can compete against us in energy transition? He asked this question at the signing ceremony.

Lula said that he wants to make Brazil a global supplier of low-carbon fuels and the "Saudi Arabia" of renewable energy within 10 years.

Brazil's green goals could be undermined if proposals are made to increase fossil fuel drilling, especially near the mouths of the Amazon River, and build more thermal power stations, which run mainly on natural gas.

Brazil's government claims that it needs to produce its own oil and gas in order to ensure its energy security.

However, environmentalists claim that Brazil's green exports won't bring true climate benefits if it achieves its energy surplus by burning more fossil fuels.

"If we continue to expand thermal power plants, our energy mix will have an increased carbon footprint," said Cassio cardoso carvalho. He is a researcher with the Institute of Socioeconomic Studies' (Inesc) human rights group.

Brazil's Mines and Energy Ministry stated that natural gas has the lowest carbon footprint when compared to other fossils fuels like diesel and coal. Its production and use are "fully aligned" with the country’s plans to achieve net-zero by 2050.

FOSSIL SUBSIDIES

Inesc reported that between 2018 and 2022 the federal government subventioned fossil fuels in the amount of 335 billion reals ($58 billion), which is more than five-times more than renewables.

Carvalho stated that Brazil's green potential would allow the country to be without natural gas. However, he has not seen any significant changes in subsidies since Lula came back to power in 2023.

Inesc's analysis shows that Brazil will allocate 472 billion reais between 2024-2027 to oil, gas, and biofuels, but only 0.2% to its energy transformation programme.

Brazil's Mines and Energy Ministry stated in an email that there will still be a demand for oil and natural gas "at least through 2050". The country would also become a net oil importer by 2030 if it did not continue to explore its reserves.

Felipe Peixoto said that fossil fuels were "fundamental" for the economic development of the state. Rio de Janeiro produces the most oil and gas. It is essential for the state's economic development, as it provides royalties and companies.

Brazil has begun building 15 new gas-powered power plants. According to the non-profit civil-society organisation Arayara International Institute, this should increase Brazil's capacity for natural gas production by at least 30 percent.

INCONSTANT Elemente

The oil industry says that the variable energy supply of renewables is another reason why fossil fuels are required.

Mauricio Tolmasquim is the director of energy transition at Petrobras. The country's biggest oil and gas producer.

Data from Brazil's Energy Research Office shows that hydroelectric power stations generated 60% of the energy in Brazil by 2023.

Brazil uses more fossil fuels when the water supply is low. When a severe dry spell hit the hydropower reservoirs in 2021, 19% (of the country's) energy was produced by fossil fuel plants.

Climate change is a result of emissions and has led to an increase in both electricity prices and carbon emissions. Environmentalists believe this will become more common as the volume of rain falls in the country becomes more volatile.

Authorities said that the severe drought in Amazon, for the second year in a row, forced them to change their policy and use more thermal energy in Brazil's north region.

Arayara's Juliano Araujo, however, said that natural gas production could worsen water shortages during times of drought.

He said that "most of the thermal plants powered by natural gas consume enormous amounts of water."

Araujo stated that because natural gas is more expensive than renewables and Brazil's hydrocarbon reserves, it should divert funds to solar and wind energy and not use fossil fuels.

(source: Reuters)