Brazil, which has one of the cleanest energy matrices among the G20 countries, will need to invest approximately US$6 trillion — about R$33.6 trillion — by 2050 to reach net-zero carbon emissions. This estimate is part of the latest report from BloombergNEF’s New Energy Outlook, released in February 2025. The study presents a detailed picture of the challenges and opportunities the country will face in fulfilling the climate commitments made under the Paris Agreement.
According to the analysis, despite Brazil’s relatively clean electricity matrix, sectors such as transportation, agriculture, and land use still contribute significantly to greenhouse gas emissions. The cost of transforming this reality is high, but not prohibitive. The report states that the net-zero emissions scenario would cost only 8% more than the cheapest economic methods for growing the country between 2024 and 2050. In other words, economically, the sustainable path begins to make as much sense as the traditional one.
Moreover, Brazil has been attracting increasing investment in clean energy. In 2024 alone, US$37 billion were allocated to the energy transition, focusing on renewable sources and electromobility. “If you are building a lot more renewables, you are not building as many fossil fuels. One offsets the other,” said Vinicius Nunes, BNEF analyst and one of the authors of the report, in an interview with Folha.
The electrification of transport, in particular, is highlighted as the biggest challenge in the decarbonization agenda. The sector is responsible for more than half of the country’s energy emissions. Although Brazil is recognized for its long-standing tradition in biofuels, particularly ethanol, the shift to electric vehicles is inevitable. In February this year, sales of electrified vehicles grew by 24% compared to the same month in 2024, according to data from the Brazilian Electric Vehicle Association (ABVE). Battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) already account for 80% of these sales, and BNEF projects that by 2040, 59% of cars sold in the country will be electric — even in a baseline scenario with no additional incentives.
However, for this revolution to truly take place, the country must advance in charging infrastructure and create a more robust industrial policy that supports local production of batteries and components. The lack of a structured supply chain could become a bottleneck for the mass adoption of these vehicles. Nevertheless, with falling technology prices and the advancement of tax incentives in some states, the trend is for electrification to accelerate.
Another key point highlighted by the BloombergNEF report is the transformation of Brazil’s electricity matrix. Hydropower, historically responsible for over 60% of electricity generation, is expected to lose prominence to solar and wind power by 2050. And not only for environmental reasons: these sources are already the cheapest forms of electricity generation in Brazil, surpassing even natural gas.
Last year, the country reached 6th place in the global ranking of installed solar energy capacity, according to the International Renewable Energy Agency. However, the expansion of the wind sector slowed down: there was a 31% drop in new plant installations in 2024, driven by an oversupply scenario and demand crisis. Still, the recovery outlook is optimistic, with expectations of growth resuming by 2027.
The expansion of renewable sources, however, faces a challenge that is less visible to the general public: transmission capacity. The national electric system has been experiencing curtailments of solar and wind generation due to insufficient infrastructure to transport the energy produced. Experts warn that without parallel investments in the transmission grid, many renewable projects may become economically unfeasible.
But the decarbonization of the Brazilian economy is not limited to electricity and transportation. The BNEF report points out that 63% of Brazil’s greenhouse gas emissions come from agriculture and land-use change — primarily the deforestation of the Amazon. In 2024, degradation of the Amazon rainforest emitted 161.4 million tons of CO₂ equivalent, according to the Amazon Environmental Research Institute (IPAM). This represents 2.5 times more emissions than deforestation itself.
Livestock farming is one of the main drivers of these emissions. According to research by Embrapa, the sector accounted for 54% of national emissions last year. The adoption of sustainable practices, such as integrated crop-livestock-forestry (ICLF) systems and the restoration of degraded pastures, is considered essential to mitigate these impacts.
Photo: Gás Verde
In this context, biogas and biomethane emerge as relevant alternatives. Companies such as Gás Verde, Latin America’s largest producer of biomethane, have been betting on transforming organic waste into renewable fuel. In 2025, the company launched an unprecedented project to decarbonize the logistics sector using trucks powered by renewable gas. The company’s new plant in Igarassu (PE), expected to produce 40,000 m³ per day of biomethane, is an example of how Brazil can align a circular economy with decarbonization.
These initiatives are especially strategic in sectors that are difficult to electrify, such as heavy transport and aviation. With the growing demand for sustainable fuels in Europe, Brazil is also positioning itself as a potential exporter of advanced biofuels.
Even with all these advances, BloombergNEF projects that, in the best-case scenario, Brazil would contribute to a global warming of 1.75°C by 2100 — above the ideal target of 1.5°C set by the Paris Agreement. In a baseline scenario with moderate policies, warming could reach 2.6°C. This reinforces the need for more ambitious measures, such as strengthening carbon pricing policies, funding carbon capture and storage technologies, and encouraging innovation in sustainable aviation fuels.
The upcoming COP30, in November this year in the city of Belém (PA), puts Brazil in the international spotlight. The country will have the opportunity to show that it is ready to lead by example. To do so, it will need to tackle the main structural bottlenecks in an integrated manner and promote a truly just and inclusive transition.
The path to a carbon-neutral Brazil is long and challenging, requiring coordination between governments, companies, and society. But it is possible. And more than that, it may be the smartest path — environmentally, socially, and economically.
