The Brazilian energy transition will not occur homogeneously across regions, and this characteristic should not be seen as a limitation, but rather as one of the country's greatest competitive advantages. Brazil's territorial diversity encompasses different energy, productive, and institutional vocations, ranging from abundant water resources and the bioeconomy in the North to solar and wind power expansion in the Northeast, passing through bioenergy in the Midwest, industrial decarbonization in the Southeast, and the agro-industrial and biomass potential in the South. This is the conclusion of the second study in the series "Designing the Future of the Brazilian Energy Transition," published by FGV Clima, with support from the Itaúsa Institute. The report, "Public Policies for Energy Transition in Brazil," shows that regional heterogeneity, often treated as an obstacle to coordination, should be recognized as the basis for a smarter national strategy: capable of combining common instruments with solutions adapted to the vocations of each territory. With one of the most renewable electricity matrices in the world, Brazil starts from a privileged position in the energy transition. In 2024, 84.5% of the country's installed electricity generation capacity already came from renewable sources, with hydroelectric, wind, biomass, and solar sources being the most prominent (EPE, 2025). This profile differentiates Brazil from the global scenario, where the energy sector accounted for 69% of greenhouse gas (GHG) emissions in 2024 (UNEP, 2025). In the Brazilian case, the energy sector's share is lower, around 19.8% of GHG emissions, while land-use change remains the main source of emissions, accounting for 73.74% of the total. The challenge, therefore, is not limited to maintaining a renewable electricity matrix. The next stage of the Brazilian energy transition requires reducing emissions in end-use energy, especially in transportation, responsible for 53.27% of energy emissions, and in industry, with 16.19% (SEEG, 2026). According to Amanda Schutze, coordinator of FGV Clima and the study, Brazil needs to consolidate a transition that is simultaneously sustainable, fair, inclusive, and economically efficient, adding to this equation the regional differences that underpin the high renewability of the country's energy matrix. “The Brazilian energy transition doesn't start from scratch. Over the last few decades, the country has built a structured framework of policies, plans, and programs that, even conceived in different contexts, have given the Brazilian energy matrix one of the cleanest compositions in the world. The challenge now is to create a national model capable of accommodating distinct territorial trajectories without losing strategic coherence,” says the researcher.
Five vocations, one strategy
State-level mapping shows that there is no single energy transition underway in Brazil. Each region is advancing based on its own resources, production chains, infrastructure, and institutional capacities, which requires policies and strategies adapted to the different realities of the country.
Heterogeneity of the energy transition in Brazil
In the North, abundant water resources and the potential of the bioeconomy coexist with isolated systems, logistical difficulties, and dependence on fossil fuels in remote areas. In the Northeast, wind and solar energy production has already transformed the region into a protagonist of renewable energy expansion, but this progress is hampered by bottlenecks in transmission, storage, and local industrialization. In the Midwest, the connection between energy and agribusiness opens up space for bioenergy, biomethane, and biofuels, while also demanding greater integration between energy policies and agro-industrial chains. In the Southeast, where the country's largest industrial and energy hub is concentrated, the challenge is to decarbonize industry without losing competitiveness or compromising security of supply. The South combines agro-industrial vocation, innovation, and biomass potential, but still needs to address the persistence of fossil fuels, especially coal, in part of its energy matrix. A combined analysis of this heterogeneity shows that uniform policies applied to the entire territory tend to produce asymmetrical or underutilized results. The country's diverse range of skills demands tailor-made tools, and it is this unique combination that makes Brazil's range of solutions difficult to replicate in other economies.
What already exists, and what still needs to mature.
This study maps the framework of policies, plans, and programs that structure Brazil's energy transition. In biofuels, renewable generation, and energy efficiency, the country has mature programs, established rules, and decades of institutional learning. In other areas, such as low-carbon hydrogen, industrial decarbonization, and the recently created Brazilian Emissions Trading System (SBCE), institutional construction is still underway. The ongoing initiatives have distinct natures: umbrella strategies, such as the New Industry Brazil and the Ecological Transformation Plan; long-term plans, such as the Brazil 2050 Strategy, the National Energy Transition Policy, and the Climate Plan; and programs with a consolidated design, such as Procel and ANEEL's Energy Efficiency Program. Recognizing these layers is what allows us to understand Brazil's progress in the energy transition with the precision that the agenda demands and to design instruments capable of addressing the distinct regional vocations.
This text was translated by machine from Brazilian Portuguese.