Discussion on the transition to green industrialization in Brazil

Brazil must shift to a new green economy based on biogas, biomethane, and solar and wind energy. This is what the Minister of the Environment, Joaquim Leite, said during the Brazil Steel 2022 Congress, an event organized by the Brazil Steel Institute, which takes place this Tuesday and Wednesday (24), in São Paulo. The panel also discussed the complex scenario for the steel industry and how the sector remained standing and fulfilling its role during the Covid-19 pandemic. The President of the Republic, Jair Bolsonaro, the Minister of Economy, Paulo Guedes, congressmen, authorities, and businessmen connected to the steel sector attended the event.

While participating in the panel “Climate change and the steel industry”, Minister Joaquim Leite pointed out that the world’s challenge is to get more accessible renewable and clean energy. He reminded that Brazil has 14 GW of installed capacity in solar energy generation and may reach 100 GW in the following years. In wind power, there are 20 GW and should reach 60 GW. And this clean energy potential can increase a lot with offshore energy projects.

According to Joaquim Leite, the Brazilian Institute for the Environment and Renewable Natural Resources (Ibama) has already received 66 projects requesting permission to explore energy in marine waters, which can produce 169 GW of energy. To get an idea of this volume, Brazil today produces 180 GW from all sources. The potential for offshore energy production is 700 GW, which corresponds to 50 Itaipu hydroelectric plants. Leite recalled that there are still technological challenges to exploiting this energy, but that there are already studies indicating investments of more than R$ 1 trillion. “This is super important for this sector since the wind power plants will probably have a lot of Brazilian steel,” he said.

The minister also informed that an interministerial decree will be published by the Ministries of Environment and Mines and Energy, instituting a single management platform for marine areas for energy production.

About the transition to a green economy, the minister said that this needs to be done in a responsible and rational way, together with the private sector. Among the incentives, there will be credit offers at lower interest rates for the private sector to make the transition. He reminded that the companies that cannot reach the carbon reduction targets by 2050 will be able to compensate by buying credits in the regulated carbon market.

According to Joaquim Leite, the decree that creates the regulated carbon market in Brazil, published in May of this year, counts on a unique central registry of carbon footprints, focused on the exportation of credits.