International Energy Agency sees Brazil well positioned in energy transition shift

RIO DE JANEIRO, BRAZIL – Fatih Birol, Executive Director of the International Energy Agency (IEA), said he believes in Brazil’s leading role in the energy transition shift towards a low carbon economy.

He also highlighted that the path towards cleaner sources is irreversible and will affect all countries and companies, including those that fail to reposition themselves.

“Brazil is very well positioned in terms of its share in this transition to clean energy and considering the carbon footprint. I expect the country to show its leadership in this transition to the future for clean energies in Latin America and also in the world,” he said during an online event at FGV Energia.

Birol highlighted that, in addition to its potential in solar and wind power generation and biofuels production, Brazil has a “success story” in hydroelectric generation that can not be ignored.

He anticipated that the IEA should publish, by the end of this month, a report on the “critical importance of hydropower” in the context of energy transition. “I find it absurd that hydroelectric plants are forgotten in today’s debates,” he said. During the event, the subject of the country’s water crisis was not addressed.

Birol also commented on the importance of the participation of state-owned companies in the transition process, and not only large private oil companies. “I hope that the companies ignoring the transition will not be surprised when long-term strategic investments are undermined. These national companies in all countries will be affected by the transition,” he said.

Today in the world, European oil companies (such as BP, Shell, Equinor and Total) have made bolder commitments that foresee increasing investments in renewable energy. Other companies, such as America’s ExxonMobil, Chevron and Petrobras, have chosen a less radical path, based on decarbonization initiatives within their own oil and gas operations.

The IEA executive director also pointed out that the energy transition is an irreversible step and that no country will be unaffected by it.

“I look at countries around the world and there is a race to get to these climate targets, but this race is not between countries, it is a race against time. It’s a race that some wealthy countries are starting ahead of developing countries, but the nature of the race works in such a way that we need all countries to get to the finish line. Otherwise, no one wins,” he said.

However, Birol points out that despite the increased engagement of governments and companies in pledges toward energy transition, global emissions continue to grow. “More and more governments make more promises, and in practice the opposite happens,” he said.

Present at the same online event, Minister of Mines and Energy Bento Albuquerque, argued that the energy transition is a “complex process that varies in pace and stage according to different national and regional realities.”

“There is no single technological choice, nor a universal recipe [for the transition]. Success will depend on all viable technologies and sources,” he said.

He claims that Brazil is “well positioned” due to the fact that the national energy matrix counts on a renewable share above the global average.

Bento also said that the private sector in Brazil “is sensitive” to the changes and reinforced, within the government’s efforts, the intention to publish within 60 days the guidelines of a national program for green hydrogen.

“In a short time Brazil will be one of the big international players in hydrogen,” he said.

With no mention of the current water crisis in the Brazilian electrical system or expectations regarding the privatization of Eletrobras, Albuquerque said the government remains committed to creating a business environment favorable to investments.

“In the past two years, 26% of foreign capital that entered Brazil, about US$40 billion went to the energy and mining sector, particularly the energy sector. And we understand that, with the economic recovery, not only in Brazil, but worldwide, this business environment will remain favorable,” he commented.

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