Ameer Randolph
Brazil is the largest producer of oil and gas in Latin America and holds significant fossil fuel reserves. In 2021, fossil fuels accounted for 13% of Brazil's electricity generation, and in 2024, Brazil relied on fossil fuels for 10% of its electricity. However, Brazil has also been described as a bio-energy superpower due to its ethanol fuel production and is the world's largest producer of sugarcane, a crop used to produce ethanol. Brazil's energy consumption comprises a mix of sources, with crude oil and other petroleum liquids accounting for 44.2% in 2021, while renewables (including hydro) made up 37.5%. Brazil's government has implemented policies to reduce the country's dependence on fossil fuels, such as the Pró-Álcool program, which aimed to replace automobile fuels derived from fossil fuels with ethanol.
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What You'll Learn
Brazil's fossil fuel consumption
Brazil is the world's seventh-largest energy consumer and the largest in South America. In 2021, Brazil's energy consumption included crude oil and other petroleum liquids (44.2%), renewables (including hydro) (37.5%), natural gas (11.6%), coal (5.5%), and nuclear energy (1.3%). Brazil is also Latin America's largest oil and gas producer, with significant reserves located deep underground off the coast of Rio de Janeiro and São Paulo. The country holds the distinction of having the deepest oil reserves that are still recoverable.
Brazil's state-owned company Petrobras is the largest player in the country's oil and gas industry, accounting for over 90% of national crude oil production. The company's dominance is a result of its four decades of exclusive rights to oil exploration in Brazil. While Petrobras has not held a legal monopoly since 1997, it remains largely unrivalled. Brazil's oil production reached 1.1 billion barrels in 2022, with over 90% produced offshore. Natural gas is often produced alongside crude oil, and Brazil's natural gas production also hit a new peak in 2022, reaching 50.34 billion cubic meters.
Brazil's energy sector underwent market liberalization in the late 1990s and early 2000s, with the adoption of the Petroleum Investment Law in 1997. This law established a regulatory framework, increased the use of natural gas, and ended the state monopoly on oil and gas exploration. The Pró-Álcool program, initiated in 1975, aimed to phase out automobile fuels derived from fossil fuels and replace them with ethanol. This program successfully reduced the number of cars running on gasoline in Brazil by 10 million, decreasing the country's dependence on oil imports.
Brazil's electricity generation in 2021 was primarily driven by renewable sources, which accounted for 75.9% of the total electricity produced, with hydropower contributing the majority (54.8%) and other renewables making up 21.1%. Brazil is a leader in renewable electricity within the G20 and has already exceeded its goal of generating 84% of its electricity from renewable sources by 2030. In 2024, Brazil relied on fossil fuels for only 10% of its electricity, and its power sector emissions per capita were the lowest in the G20. The country's power sector emissions peaked in 2014, but the growth in wind and solar energy has since met rising demand, reducing fossil fuel generation.
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The impact of fossil fuels on Brazil's climate
Brazil, the largest oil and gas producer in Latin America, has witnessed the impacts of fossil fuels on its climate. The country's significant fossil fuel reserves, especially off the coast of Rio de Janeiro and São Paulo, have contributed to its energy production and consumption mix. While Brazil has made strides in renewable energy, fossil fuels still play a role in its energy sector. The burning of fossil fuels has been linked to extreme weather events in Brazil, including intense and frequent droughts and floods.
Brazil's energy consumption in 2021 included crude oil and other petroleum liquids (44.2%), renewables (including hydro) (37.5%), natural gas (11.6%), coal (5.5%), and nuclear energy (1.3%). Fossil fuels, such as crude oil, natural gas, and coal, are often transformed into more practical forms, such as refined fuels or electricity generation. While Brazil's electricity generation has increased due to renewables like solar and wind power, fossil fuels have also contributed to this growth.
Additionally, Brazil has experienced severe droughts in the Amazon river basin since mid-2023, with river levels reaching their lowest point in 120 years. The World Weather Attribution (WWA) study attributed this agricultural drought to climate change, stating that it was made 30 times more likely due to human activities. Climate scientists have warned that continued reliance on fossil fuels will lead to more frequent and intense droughts in the Amazon region.
Brazil's oil and gas firms, such as Petrobras, have been identified as major emitters by Climate Analytics. These firms have been estimated to owe significant financial responsibilities for the damages caused by their emissions. However, the Brazilian government has continued to support the expansion of oil and gas production, with plans to increase production and provide incentives through tax expenditures. While Brazil has set goals for reducing emissions and achieving net-zero, its current policies have been rated as insufficient by the Climate Action Tracker.
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Brazil's fossil fuel production
Brazil is the largest oil and gas producer in Latin America. The country holds significant reserves deep underground off the coast of Rio de Janeiro and São Paulo. In 2022, oil production in Brazil reached a new high of 1.1 billion barrels, with natural gas production reaching 50.34 billion cubic meters. Brazil's energy consumption in 2021 was made up of crude oil and other petroleum liquids (44.2%), renewables (including hydro) (37.5%), natural gas (11.6%), coal (5.5%), and nuclear energy (1.3%).
Brazil's energy sector underwent market liberalization at the turn of the 21st century, with the adoption of the Petroleum Investment Law in 1997, which liberalized oil production and ended the state monopoly on oil and gas exploration. The law also created the National Council for Energy Policy (CNPE) and the National Agency of Petroleum, Natural Gas and Biofuels (ANP). Despite this, the government retained control of key energy complexes and regulated the prices of certain energy products.
Brazil is also the world's second-largest ethanol fuel producer, with ethanol being produced from sugarcane. In 1975, the Brazilian government initiated the Pró-Álcool program, a nationwide program to phase out automobile fuels derived from fossil fuels in favor of ethanol. This program successfully reduced the number of cars running on gasoline in Brazil by 10 million, reducing the country's dependence on oil imports.
Brazil's energy policies have a strong focus on improving energy efficiency and increasing the use of renewable energy sources. The country has almost universal access to electricity, and its energy sector is one of the least carbon-intensive in the world, with renewables meeting almost 45% of primary energy demand in 2019, compared to a global average of 14%.
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Government policies on fossil fuels
Brazil's government agencies responsible for energy policy include the Ministry of Mines and Energy (MME), the National Council for Energy Policy (CNPE), the National Agency of Petroleum, Natural Gas and Biofuels (ANP), and the National Agency of Electricity (ANEEL).
Brazil's energy sector underwent market liberalization at the turn of the 21st century. In 1997, the Petroleum Investment Law was adopted, establishing a legal and regulatory framework and liberalizing oil production. It created the CNPE and the ANP, increased the use of natural gas, and increased competition and investment in the energy market. The state monopoly on oil and gas exploration ended, and energy subsidies were reduced.
Brazil's government budget is being eroded by subsidies to fossil fuel production and consumption. Phasing out these subsidies in a socially equitable way will increase government revenues and promote the transition beyond fossil fuels. In 2017, taxes and other revenues from fossil fuels amounted to 6.8% of the general government revenue in Brazil.
Brazil's power sector is dominated by renewables, which represented almost 90% in 2024, making Brazil's power grid one of the world's cleanest. Brazil has significantly ramped up wind and solar deployment, resulting in an increase in the share of wind and solar in power generation from about 11% to 25%. Fossil gas, coal, oil, and nuclear make up the remaining 10% of electricity generation.
Brazil's new climate pledge, launched at the COP29 climate summit in Baku, aims to cut greenhouse gas emissions by up to two-thirds by 2035 compared to 2005 levels. The pledge includes a mitigation plan for the transportation sector, which seeks to "replace fossil fuels with electricity and biofuels." Brazil's submission is significant as it is one of the largest economies in the world and a top-10 annual and historical emitter.
Brazil's new growth acceleration programme, Novo PAC, has been criticized for assigning around USD 110 billion (just over 30%) of its budget to "energy transition and security," while earmarking 63% of its budget for the oil and fossil gas industries, mainly for the production and development of these fossil fuels.
Brazil intends to expand its oil production until at least 2029, while fossil gas production is expected to maintain its high levels over the next ten years. Brazil was the world's ninth-biggest oil producer in 2022 and the eighth-largest consumer of petroleum products. Brazil has policies in place that aim to make Brazil the world's fourth-largest oil producer by the end of this decade.
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Brazil's transition to renewable energy
Brazil is the largest oil and gas producer in Latin America and the seventh-largest energy consumer in the world. In 2021, crude oil and other petroleum liquids made up 44.2% of Brazil's energy consumption, while renewables (including hydro) accounted for 37.5%. Brazil's electricity generation in 2021 was primarily driven by renewables, contributing 75.9% of the total electricity produced, with hydropower being the most significant source at 54.8%. Brazil has also been described as a bio-energy superpower due to its ethanol fuel production from sugar cane, of which it has the largest crop globally.
Brazil's energy sector underwent market liberalization in the late 1990s and early 2000s, with the adoption of the Petroleum Investment Law in 1997, which liberalized oil production and ended the state monopoly on oil and gas exploration. Despite this, the government-owned company Petrobras remains the largest player in Brazil's oil and gas industry, accounting for over 90% of national crude oil production.
Brazil has experienced the impacts of fossil fuel-driven climate change, with attribution studies confirming its role in the intensity and frequency of droughts and floods. The government has set a goal of reaching net-zero emissions by 2050 and presented an updated Nationally Determined Contribution (NDC) in 2024, pledging to reduce emissions by up to 67% by 2035 based on 2005 levels. Current government policies focus on improving energy efficiency and increasing the use of renewable energy sources like wind and solar power.
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Frequently asked questions
Brazil is not heavily dependent on fossil fuels. In 2024, the country relied on fossil fuels for only 10% of its electricity. Brazil is a leader in renewable electricity within the G20 and has already exceeded its goal of generating 84% of its electricity from renewable sources by 2030.
Brazil is the 7th largest energy consumer in the world and the largest in South America. In 2021, Brazil's energy consumption included crude oil and other petroleum liquids (44.2%), renewables (37.5%), natural gas (11.6%), coal (5.5%), and nuclear energy (1.3%). Brazil is also the largest oil and gas producer in Latin America, with oil production reaching 1.1 billion barrels in 2022.
Brazil has set a goal of reaching net-zero emissions by 2050 and pledged to reduce emissions by up to 67% by 2035 based on 2005 levels. The country plans to increase the use of wind and solar power to reduce its current reliance on hydropower. However, the government also intends to increase oil production by 63% and gas by 124% by 2032, which may hinder progress towards reducing fossil fuel usage.
Fossil fuel-driven climate change has been linked to the intensity and frequency of droughts and floods in Brazil. Studies have found that burning fossil fuels has made heavy rainfall and droughts more likely and intense. Brazil's oil and gas firms have been estimated to owe up to USD 20 trillion in damages for emissions between 2018 and 2023.
