Brazilian context and voluntary contributions to Brazil’s decarbonization journey

Brazil is committed to reducing greenhouse gas emissions by 37% in 2025 and 50% in 2030, compared to the 2005 baseline, and achieving emissions neutrality by 2050. The country also committed to eliminating illegal deforestation by 2028 and has signed the Global Methane Pledge.

Brazil has a unique emissions profile globally, with most of its emissions arising from land use change (38%) and the second least carbon-intensive energy matrix of the G20. Reducing deforestation and encouraging reforestation and restoration are essential to the country’s decarbonization trajectory. Additionally, the energy sector must continue to contribute to minimizing climate change, maintaining or increasing the contribution of renewable sources, and improving the efficiency of fossil fuels through investments and actions that reduce and offset their emissions, taking social and economic aspects into account.

The transport sector is responsible for 33% of final energy consumption in Brazil, which is influenced by several factors, such as per capita GDP, availability and efficiency of logistics infrastructure, environmental policies, and people’s behavior. Our road infrastructure results in one of the most fuel-intensive economies net, around 0.31 boe/thousand US$GDP, equivalent to twice the world average. Therefore, the economy is susceptible to its cost. In this sense, opportunities to increase the efficiency of the logistics and transport infrastructure play a relevant role in decarbonization since they may lead to lower primary demand for energy and lower cost for the same energy service.

However, a significant change in the transport matrix requires high investments and takes time. Using existing technologies and infrastructure, biofuels play a relevant role in the carbon intensity of the Brazilian transport sector. Brazil is the only country in which the use of biofuels exceeds 10% of the energy demand in the transport sector, reaching approximately a 23% share in this sector, higher levels than those presented in the IEA’s NZE scenario for 2030 in the world transport sector. This high share is linked to incentive policies, such as the RenovaBio, Combustível do Futuro (Fuel of the Future), and Rota 2030 Programs.

In 2022, renewable energy sources were responsible for around 92% of the electricity supply to the SIN (National Interconnected System). According to International Renewable Energy Agency (IRENA), a reduction in GHG emissions consistent with the 1.5°C target requires the participation of around 90% of renewable energy in the world’s electricity matrix in 2050 (IRENA, 2022).

We believe compliance with Brazilian commitments must consider a just and inclusive energy transition process. Success in controlling emissions from land use change, identifying, and developing decarbonization options at the lowest cost to society, and ensuring access to energy (fundamental for competitiveness and social well-being) will be competitive edges for companies and nations, involving risks and opportunities.

Voluntary Social and Environmental Investment with Impacts on Climate Change

We support projects focused on the restoration or conservation of forests and natural areas of the Atlantic Forest, Amazon, Caatinga and Cerrado, contributing to the mitigation of greenhouse gas emissions due to deforestation in Brazil and collaborating for Sustainable Development Goals 13 (Climate Action) and 15 (Life on Land).

Our current portfolio, in 2022, had an area of influence in more than 27.8 million hectares of native ecosystems. The net incremental benefit (net removal and avoided emissions) estimated from the efforts conducted from 2013 to date by these projects is around 2.3 million tCO2e, with gains also for biodiversity, water, and social and economic development. Our initiatives involve net removal through vegetation recovery activity and productive reconversion and also avoided emissions through measures that prevent deforestation and forest degradation.

Just Transition

Just transition discussions have been historically marked by the mention in the Paris Agreement (2015) that the countries’ commitments should consider the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities. During COP 27, the need for a just energy transition was reinforced based on development priorities defined at the national level and aligned with the increase in renewable energy generation or with lower GHG emissions.

In this sense, we recognize the relevance of the search for a just transition, and we are attentive and active to evolve in this theme to incorporate its elements in our business management increasingly. SP 2023-2027 highlights areas of action that contribute to the security of the energy supply and include short-term strategies for reducing emissions and producing fuels with lower carbon intensity. Social participation is carried out continuously and systematically, per Petrobras’ Health, Safety and Environment (HSE) policy, through two guidelines for community relations and communication. The assessment of socialenvironmental and climate risks is required during the gate approval process of investment projects and involves the characterization of the social context, and assessment of social and climate risks.