Download report
All markets

Brazil

With a cumulative score of 2.01, Brazil ranks number 7 among emerging markets and number 31 in the global ranking.

  • Emerging markets
  • Americas

2.29 / 5

Power score


1.35 / 5

Transport score


 

Buildings score


Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.


Compare

Low-carbon strategy

Net-zero goal and strategy

Brazil is aiming for net-zero carbon emissions by 2050, having brought forward its previous target date from 2060 in April 2021. Brazil formalized this declaration at COP26 in November 2021.

Nationally Determined Contributions (NDC)

Brazil released an updated NDC in December 2020 in which it largely maintained its previous commitment to reducing total net greenhouse gas emissions by 37% in 2025 based on the reference year of 2005, and a 43% reduction by 2030. The emission levels in the base year, 2005, were also revised upward to 2.8 GtCO2e from 2.1 GtCO2e due to methodological changes, making them less ambitious in absolute terms. Brazil's NDC covers all sectors, however, the country’s power sector is relatively clean, with renewable sources providing over 80% of generation. Brazil’s declaration at COP26 in November 2021 increased its emissions reduction target for 2030 from 43% to 50%, with 2005 base-year emissions revised downwards to 2.4 GtCO2e, leaving the target unchanged from the original NDC.

Fossil fuel phase-out policy

There is no fossil fuel phase-out policy in Brazil.

Power

Power policy

Since 2009, Brazil has implemented reverse auctions to contract new clean energy generation capacity to supply the regulated utility market. The country is a pioneer of competitive renewable energy auctions, which have led to 30GW of renewable energy contracted to date. After holding none in 2020 due to the Covid-19 crisis, Brazil returned to holding energy auctions in 2021, holding two in July and another in September. Sharp competition among project developers has typically resulted in low average wind and solar prices, including an average solar auction price of $17.5/MWh in July 2019, which remains the lowest recorded in Brazil to date.

Net metering has also been a widely utilized clean energy policy. Retail electricity customers may install up to 5MW self-generation facilities, connect to the grid, deliver surplus generation and obtain compensation in the form of a subsequent billing credit. The incentive has led to a distributed solar boom, with small-scale PV capacity jumping from around zero in 2015 to over 8GW (DC) as of September 2021. However, Brazil appears to be nearing the end of a lengthy process of reforming its distributed generation regulations. The latest version of the new regulations, if approved, would leave its generous net metering rules in place through 2045 for those who have solar systems already or who add them within 12 months of the law being enacted. New systems installed after that will face a six-year transition period to a new tariff schedule that will gradually pare back compensation.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

Retail electricity prices are among the highest in Latin America. However, commercial and industrial (C&I) customers with power demand greater than 500kW are eligible to purchase electricity from Brazil’s deregulated wholesale market. Consumers with demand between 500kW and 1.5MW (special consumers) choosing this option must purchase wholesale power generated from incentivized renewable sources, including wind, small hydro, biomass and solar. The maximum threshold for special consumers fell from 2MW to 1.5MW in January 2020 and will decline by 0.5MW every January until 2023.

Loading...

Power market

Brazil has the largest power market in Latin America, with total installed capacity of 180GW in 2020. The power sector is fully unbundled. Several distinct actors participate in generation, transmission, distribution and retail, and the power market is fairly evenly split between state-owned and private-sector players. ONS operates the national power system and CCEE is responsible for the country's wholesale market. Brazil’s matrix remains highly reliant on hydropower and has experienced recurring crises resulting from low rainfall in certain years, most recently in 2020-21. The current crisis has exposed the market to costly fossil-fuel generation, sending power prices soaring and temporarily raising the prospect of electricity rationing.

Installed Capacity (in MW)

20122014201620182020050K100K150K200K MW

Electricity Generation (in GWh)

201220142016201820200200K400K600K GWh
Loading...

Utility privatisation

Which segments of the power sector are open to private participation?


Generation
Transmission
Retail

Wholesale power market

Does the country have a wholesale power market?


Available
Not available

Transport

EV market

Brazil’s EV market is growing, but is still at an early stage. As Latin America’s largest auto market, Brazil leads the region in EV sales. Growth has been driven by rising sales of plug-in hybrid electric vehicles, concentrated in the luxury market, which account for the vast majority of sales. Adoption remains very low as a percentage of new passenger vehicles sales, at well under one percent. All passenger EVs are imported in Brazil and there are currently no large-scale plans to manufacture batteries or vehicles domestically.

EV policy

Policy support for EVs is somewhat limited in Brazil. In 2015, import tax rates were lowered from 35% to 0% for battery electric vehicles, and set at a range of 0-7% for plug-in hybrids and hybrids, depending on criteria such as weight and energy efficiency. However, EVs still pay higher IPI (federal excise tax) and ICMS (state sales tax) taxes. In 2018, the annual car ownership tax (IPVA) was set at 4% and EVs are exempt from this in seven states (Ceará, Maranhão, Pernambuco, Piauí, Rio Grande do Norte, Rio Grande do Sul and Sergipe) and enjoy a reduced rate in Mato Grosso do Sul, Rio de Janeiro and São Paulo. Other incentives include exemption from circulation restrictions in Sao Paulo since 2014 which prevent vehicles from entering the city during cetain peak hours, depending on the final numbers on their license plates.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?


Available
Not available

Buildings

Buildings market

Overall, Brazil's energy efficiency plans have not been well structured. The country has established many policies and plans over the past decades, but these have been mainly in reaction to crises rather than the result of structured, long-term planning. In 2011, the government published the National Energy Efficiency plan (Plano Nacional de Eficiencia Energetica), establishing the main goals of the sector. However, this has yet to translate into new policies or regulations. The efficiency certification of end products is the most successful initiative in the broader energy-efficiency space.

Energy efficiency plan

Does the country have a national energy efficiency plan?


Available
Not available

Energy performance standards

Are there minimum energy performance standards for buildings?


Available
Not available

Buildings policy

As of August 2021, the government has yet to implement substantive policy support in this sector. Brazil does not appear to have mandatory residential or commercial building efficiency codes. The Regulation for Energy Efficiency Labeling of Commercial, Service and Public Buildings was released in February 2009 and the Regulation for Energy Efficiency Labeling of Residential Buildings was released in November 2010, however, the labeling of residential, commercial and service buildings is voluntary, while the labeling of federal public buildings is mandatory since 2014. The low-carbon heat market remains largely irrelevant given Brazil’s tropical and subtropical climate.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

Additional insights
from BNEF

Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.

Read more

Powered by

Climatescope 2021

Energy Transition Factbook

This marks the 10th anniversary of Climatescope, BNEF’s annual assessment of energy transition opportunities. For the first time, the project has expanded its scope to include activity not just in clean power but in the decarbonization of the transportation and buildings sectors.

Read the reportSee all reports

Stay up to date

Subscribe to our mailing list to get the latest news about Climatescope directly in your inbox.


Results
Themes
InvestmentPolicyProgress

© 2022 Climatescope. View license and Privacy policy