Brazilian Member Committee

ENERGY ISSUES IN MOTION

In 2025, Brazilian respondents identified economic growth and permitting and licensing delays as the most critical uncertainties shaping the national energy landscape.

Economic growth emerged as the top uncertainty, reflecting the strategic challenge of aligning Brazil’s development priorities with the demands of a low-carbon economy. Rather than a question of short-term performance, this uncertainty points to the need for greater coherence between macroeconomic planning, industrial policy, and climate objectives. Respondents noted that Brazil’s energy sector holds the potential to drive competitiveness and global positioning, particularly through clean technologies and value-added exports. Unlocking this potential will depend on coordinated strategies that connect energy investments with broader economic and industrial transformation.

Permitting and licensing delays were also recognised as a significant constraint, particularly for infrastructure development and new technology deployment. Brazil is currently undergoing a process of reform aimed at simplifying regulatory procedures, especially for projects deemed to have lower environmental impact. These efforts are seen by many as a positive step toward improving the pace of implementation and reducing administrative bottlenecks. However, there are still differing perspectives across institutions and sectors regarding how far and how fast this simplification should go. While some emphasize the urgency of accelerating project timelines, others underscore the importance of maintaining environmental integrity, transparency, and public participation, particularly in regions where infrastructure intersects with vulnerable ecosystems or communities. Rather than a binary issue, this reflects the broader need to design permitting systems that are both agile and institutionally legitimate.

Respondents also pointed to broader uncertainties around energy security, climate adaptation, and access to financing for innovation. These concerns echo global trends but gain distinct contours in Brazil’s context, marked by hydro-reliance, regulatory bottlenecks, and the need for greater coherence between industrial and environmental agendas. The presence of competing narratives around the role of fossil fuels further contributes to uncertainty about Brazil’s medium-term transition trajectory. Addressing this will require more adaptive and regionally tailored transition models that can reflect the country's social and territorial diversity.

Priorities for Action

Brazilian respondents converged around a set of high-impact, lower-uncertainty areas that should be prioritised to support system readiness and resilience:

• Transmission grids and energy storage are viewed as critical to integrating growing volumes of renewable generation and improving the overall flexibility and stability of the energy system.
• Demand management and demand growth were identified as central to ensuring load balancing and enabling the effective integration of distributed resources and emerging uses such as electric mobility and hydrogen.
• Infrastructure development more broadly was seen as foundational, with respondents emphasizing the need for timely investments not only in physical assets, but also in digital systems, permitting frameworks, and logistics chains.

There was strong convergence on what needs to be done in the short term, including renewable expansion, fleet electrification, grid modernisation, and efficiency, but also recognition that the challenge lies in how and how fast these priorities are delivered. Brazil already has enabling tools in place, such as RenovaBio, the MOVER programme, and ANEEL's regulatory instruments. The focus now turns to unlocking investment, accelerating regulatory cycles, and expanding local technical capacity to move from ambition to implementation.

FROM BLIND SPOTS TO BRIGHT SPOTS

One blind spot identified by Brazilian respondents was the coordination across sectors and policy agendas. While energy, climate, and industrial strategies have evolved in parallel, mechanisms to ensure their alignment remain limited. This reduces the effectiveness of planning efforts and may delay the deployment of multi-sectoral solutions, such as integrated hydrogen and ammonia corridors or low-carbon transport networks.

A second blind spot relates to the interoperability of incentives and policy signals. Although Brazil has several instruments to support energy transition initiatives, respondents noted that these are often fragmented across ministries, agencies, and funding sources. Greater harmonisation, both in design and execution, would improve investment predictability and facilitate collaboration between public and private actors.

Beyond regulatory and financial integration, respondents also noted the low visibility of structural and social dimensions of the transition, such as energy waste management, productive inclusion, and the role of the low-carbon bioeconomy. These issues are not yet perceived as urgent, but their relevance is growing. Ensuring that energy transition models are socially inclusive and biodiversity-aware will be key to avoiding deeper inequalities.

Respondents suggested the need for frameworks that promote:

• Cross-sectoral alignment of goals and investment criteria;
• Transparent and performance-based incentive mechanisms;
• Stable regulatory signals that connect short-term decisions with long-term priorities.

These areas reveal opportunities where integration and system-level visibility could unlock greater value from existing resources.

On the other hand, Brazilian respondents highlighted several bright spot areas where the country offers valuable lessons for other contexts, not only in terms of technological deployment, but also in social innovation and collaborative governance.

• The continued expansion of renewable energy, particularly solar distributed generation, stands out as a key success. This decentralised model has helped democratise access to clean energy, especially in rural and peri-urban areas, while empowering households and small businesses to play an active role in the energy system.
• Brazil’s governance innovations, such as the creation of state-level observatories for a just transition, demonstrate how multi-stakeholder coordination can strengthen implementation. These platforms foster collaboration among governments, the private sector, academia, and civil society, contributing to more equitable and regionally adapted transition strategies.
• Public-private mechanisms, including initiatives like RenovaBio, the MOVER programme, and regulatory calls by ANEEL, were mentioned as institutional foundations already in place. When effectively coordinated and scaled, these instruments can help accelerate deployment while ensuring alignment with national priorities.
• The country’s experience in bioenergy and low-carbon agriculture, coupled with its biodiversity assets, offers unique opportunities to connect the energy transition with the bioeconomy and regional development. While not yet fully realised, this potential positions Brazil to lead in integrated solutions that link climate, land use, and social inclusion.

Together, these bright spots reflect a transition that goes beyond decarbonisation, toward a broader development model grounded in decentralisation, participation, and long-term resilience. Respondents emphasized that Brazil’s pathway is shaped not only by its resource base, but by its capacity to connect technological progress with inclusive governance and regional opportunity.

ADDRESSING CRITICAL UNCERTAINTIES TO BALANCE THE ENERGY TRILEMMA

The Brazilian energy landscape in 2025 demonstrates how efforts already underway are shaping the country's performance across the three dimensions of the energy trilemma: security, equity, and sustainability. These dimensions are being advanced through tangible actions, yet each continues to present its own structural challenges.

• Energy Security has seen gains through ongoing investments in grid infrastructure and the steady diversification of the generation mix. The expansion of transmission systems and simplification of permitting procedures are part of a broader institutional response to long-standing implementation barriers. However, with a growing share of variable renewable sources, questions remain about the grid’s ability to maintain stability and reliability in the absence of sufficient flexibility mechanisms, such as storage or demand-side response. The integration of intermittent sources at scale will require not only physical infrastructure, but also enhanced system planning and real-time operational capabilities.
• Energy Equity is supported by the territorial reach of distributed solar generation, which respondents highlighted as a bright spot in the transition. The decentralisation of energy supply has allowed greater participation by rural consumers and small businesses, expanding access and creating new opportunities for energy autonomy. State-level initiatives, such as observatories for a just transition, illustrate the incorporation of regional and social dimensions into the transition process. Nonetheless, affordability remains a central tension. In particular, the perception of rising costs continues to generate pressure, particularly in the industrial sector and among vulnerable populations. While subsidies and incentives exist, their coordination and long-term alignment with transition goals were identified as blind spots that risk limiting their effectiveness in supporting equitable outcomes.
• Environmental Sustainability continues to be driven by Brazil’s high share of renewable electricity and the expansion of low-carbon technologies in specific industrial sectors. The development of bioenergy routes and early-stage hydrogen initiatives were highlighted as positive examples. At the same time, respondents pointed to challenges related to land use pressures, environmental licensing debates, and the integration of biodiversity concerns into infrastructure planning. The political and narrative disputes over the role of fossil fuels in Brazil’s transition have also contributed to uncertainty regarding the long-term environmental direction of the energy sector. This reinforces the importance of ensuring that sustainability remains not only a target, but a criterion embedded in project design and regulatory frameworks.

Overall, the Brazilian experience reflects a transition in motion: anchored in real institutional and technological capabilities. Yet, still navigating key structural trade-offs. Progress across one dimension of the trilemma often reveals constraints in another. Addressing these tensions will require continued coordination, adaptive regulation, and the deliberate integration of social and environmental priorities into energy system planning and investment decisions.

Acknowledgements:

Brazilian Member Committee
Talita Covre
Janayna Bhering