The FGV Clima (Center for Studies in Climate Economics) of the São Paulo School of Economics (FGV EESP) and the Itaúsa Institute publish the report "International Experiences in the Context of Energy Transition," the first study in the series "Designing the Future of the Brazilian Energy Transition." The research compares how China, the United States, India, and the European Union are conducting their energy transitions, shows how Brazil is positioned in this scenario, and what the country can learn from these experiences to advance this agenda. Brazil has set a goal of reducing its net GHG emissions by between 59% and 67% by 2035, based on 2005 levels, according to the Nationally Determined Contribution (NDC) presented at COP 29. To achieve this, industry plays a central role—and international experience is clear: the countries that have made the most progress have treated the energy transition as a state and competitiveness agenda, not just as a climate response. Industry can be decisive for the transition in Brazil. With 23.4% of GDP (approximately R$ 2,566.8 billion in 2025), 31.7% of final energy consumption, and 11.8 million workers, industry is simultaneously the most demanding target and the biggest driver of the transition. The country starts from a favorable position. In 2024, 64.4% of the energy consumed by industry came from renewable sources, one of the highest percentages among industrialized economies. But this progress does not reach sectors that are difficult to reduce, such as cement, steel, chemicals, and aluminum. For these segments, electrification is not enough: the transition requires green hydrogen, carbon capture and storage (CCUS), and a profound reformulation of production routes. According to the coordinator of FGV Clima and the study, Professor Amanda Motta Schutze, “the energy transition opens a strategic window for Brazil to transform its natural advantages into industrial capacity, innovation, and competitiveness. The challenge is not only to adopt cleaner technologies, but to reposition the country in a global economy that is already reorganizing production chains, investments, and trade patterns.”
What China, the United States, India, and the European Union can teach Brazil.
International comparisons show that there is no single path to energy transition. Each country combines instruments according to its productive structure, energy matrix, and industrial objectives. Even so, there is a common thread among the experiences analyzed: the transition advances when there is long-term coordination, regulatory predictability, and the capacity to mobilize public and private investment. China combined industrial scale, long-term state coordination, and dominance of production chains in solar, wind, and batteries. The United States relied on robust economic incentives via the Inflation Reduction Act, but revealed the fragility of policies subject to electoral cycles, with some of the incentives being reversed in 2025. India demonstrates how to coexist with coal dependence while investing in green hydrogen and the local manufacturing of renewable equipment. And the European Union built the most systemic model: binding targets, a consolidated carbon market, and the Carbon Border Adjustment Mechanism (CBAM), which since the beginning of 2026 has been taxing industrial products with a high carbon footprint at the border, with a significant impact on Brazilian steel and aluminum exports. The key lesson: policy signals need to be consistent to mobilize long-term private investment. Regulatory instability is the biggest enemy of industrial decarbonization.
Brazil has a renewable energy advantage, but still needs to coordinate policies.
The study shows that Brazil starts from a comparatively favorable position. In 2024, 84% of Brazil's installed electricity generation capacity came from renewable sources, almost double the world average of 46.2%. In recent years, the country has also begun to assemble the pieces of a new low-carbon economy. The National Energy Transition Policy (PNTE), which organizes the federal agenda through two central instruments—the National Energy Transition Plan (Plante), responsible for outlining routes and priorities for the transition, and the National Energy Transition Forum (Fonte); the Brazilian Emissions Trading System (SBCE), which establishes the regulatory carbon market; the Brazilian Sustainable Taxonomy, which guides investments; PATEN, which converts tax credits into green projects; and the New PAC, which allocates R$ 466.7 billion for energy transition in the period 2023-2026. The main challenge, however, lies in the coordinated implementation of these instruments. According to the report, the coordination between policies remains unclear, making it difficult for states, companies, investors, and public agencies to understand objectives, access methods, and complementarities. International experience reinforces that having good policies is not enough: the quality of governance and the consistency of signals over time are crucial to transforming energy advantage into productive leadership.
Strategic technologies for the future of the Brazilian transition.
Analysis of international experiences points to a set of strategic technologies in which Brazil possesses unique competitive conditions to advance. Green hydrogen emerges as the main bet: the country has exceptional solar irradiation and winds, a long coastline, and geographical proximity to Europe, the largest projected import market. Advanced biofuels, including SAF for aviation and green diesel for heavy-duty vehicles, are irreplaceable in segments that electrification does not reach, and Brazil already holds historical leadership in this field. Battery energy storage and carbon capture and storage (CCUS) become indispensable as renewables expand their share and sectors that are difficult to decarbonize, such as cement, steel, and chemicals, need specific decarbonization routes. Completing this picture are strategic minerals: Brazil possesses the world's largest reserves of niobium and significant deposits of lithium, graphite, and rare earths, essential minerals for global clean technology chains. The main message of the study is that Brazil's energy advantage will not automatically translate into leadership. To achieve this, it will be necessary to combine consistent policies, long-term financing, institutional coordination, and an industrial strategy capable of transforming natural resources into innovation, skilled jobs, and low-carbon competitiveness.
ABOUT THE STUDY
"International Experiences in the Context of Energy Transition" is the first report in the series "Designing the Future of the Brazilian Energy Transition," a project by FGV Clima in partnership with the Itaúsa Institute. The series consists of five studies that, together, offer an integrated reading of available instruments, international experiences, and Brazilian specificities to answer the central question: how to transform Brazil's energy advantage into a competitive, fair, and low-carbon industrial strategy?
This text was translated by machine from Brazilian Portuguese.