During an online session parallel to the G20 Summit in Rio de Janeiro, Petrobras, the state oil company of Brazil, highlighted its just energy transition strategy. The discussion aimed to present challenges and opportunities for Brazil in the global competition toward a low-carbon future and featured Viviana Coelho, Executive Manager of Decarbonization, and Renan Pinheiro Silvério, the Chief Economist of the company.
This week, Petrobras has publicly presented its practicing view of a balanced energy future. Over the G20 week in Rio de Janeiro, company leaders and climate experts emphasized that a strong and fair energy transition is necessary to make Brazil's climate commitments real and also to shield the economy from shocks in a changing global energy market. Recent studies by economists Carlos Eduardo Young and Helder Queiroz at UFRJ in partnership with the Energy Working Group of Observatório do Clima propose urgent avenues for transitioning Petrobras from an oil and gas company into a diversified energy powerhouse.
According to the two utmost findings, namely "Key Issues and Alternatives for Decarbonizing Petrobras’ Investment Portfolio" and “The Petrobras We Need,” Petrobras in its present avatar are against Brazil's climate goals:
As per the 2025‐2029 business plan, Petrobras was to invest US$ 111 billion, with only about US$ 9.1 billion being dedicated toward the low‐carbon energy sectors.
However, the present Brazilian plan is at odds with the National Determined Contribution (NDC) and the National Mitigation Strategy ("Plano Clima") for deeper reduction of greenhouse gas emissions and recognition of their neutrality by the year 2050.
What Is the Energy Transition?
Viviana explained that the energy transition is the global effort to shift toward a low-carbon economy, drastically reducing greenhouse gas emissions, particularly CO₂ and methane. Energy use is responsible for nearly 70% of global emissions.
Brazil, however, stands out as a positive example:
Over 90% of the country’s electricity already comes from clean sources.
Nearly 50% of its total energy mix is decarbonized, which is far above the global average.
Global Challenges
Renan emphasized that this is the first energy transition not driven by pure economic convenience:
Past transitions, from wood to coal to oil, happened because each new source was more efficient and practical.
Today, change is driven by climate commitments, social responsibility, and innovation.
He also noted that there is no “one-size-fits-all” solution. Each country must adapt according to its resources. In Brazil, biofuels and ethanol are key differentiators.
Brazil’s Four Strategic Fronts
According to Viviana, Brazil must advance on four main fronts:
Energy efficiency – reducing consumption without reducing quality of life (e.g., better public transportation).
Electrification – expanding electricity use in sectors still dominated by fossil fuels.
Molecule substitution – replacing fossil fuels with biofuels or hydrogen.
CO₂ capture – both through industrial solutions (CCS) and natural carbon sinks like forests.
Petrobras’ Role in the Transition
Petrobras announced that 10–15% of its investment portfolio is now dedicated to the energy transition. Key initiatives include:
Expanding wind and solar energy.
Investing in biofuels and sustainable aviation fuel (SAF).
Developing hydrogen projects.
Enhancing carbon capture and storage (CCS).
Decarbonizing offshore platforms and improving operational efficiency.
Viviana highlighted that Brazil’s pre-salt oil fields emit half the global average CO₂ per barrel, and Petrobras has already reduced its emissions by 40% since 2009, equivalent to eliminating all emissions from Brazil’s domestic aviation sector.
Looking Ahead
While renewable energy will continue to expand, oil and gas will remain crucial in Brazil’s energy matrix until 2050. The challenge for Petrobras and Brazil is not to abandon these fuels outright but to produce them more cleanly and efficiently, while simultaneously scaling up in new energy markets.
A Just Transition
Petrobras should emphasise the importance of a just energy transition, one that considers the economic and social realities of each country and population. The goal is to prevent vulnerable groups from bearing disproportionate costs as Brazil advances toward decarbonization.
The Recommendations for Petrobras’ Decarbonization Path and the studies propose a set of strategic moves for the Brazilian company to align with global climate trajectories and secure a more resilient business model are:
Increase investment in research, development and innovation for low‐carbon technologies, especially second and third-generation biofuels and green hydrogen;
Expand into distribution, recharging terminals, and consumer‐facing infrastructure, possibly by reacquiring BR Distribuidora or building new terminals;
Align Business Plans with Ambitious Climate Policies;
Petrobras should not only meet Brazil’s NDC and the Paris Agreement’s goals but aim to exceed expectations;
Prioritize Low-Carbon Energy Sources;
Emphasize renewables (wind, solar), SAF (sustainable aviation fuels), and biofuels, especially newer, advanced ones;
Reassess Refining Plans and Fossil Expansion;
Redirect or reduce planned investments in new refineries;
Freeze fossil fuel extraction expansion into new frontiers (e.g. Foz do Amazonas). Focus production in those already productive areas like the pre-salt region;
Ensure that the transition is just and inclusive, such that poorer populations are not disproportionately harmed;
Use fossil fuel revenues (royalties, taxes) more directly toward mitigation, adaptation, and control of deforestation;
Continue improving the operational efficiency of oil and gas production so that emissions per barrel are reduced.
Petrobras Positions Itself for the Future
By combining investments in renewables, biofuels, and innovative technologies with efforts to reduce emissions from oil and gas, Petrobras seeks to position itself as a global leader in sustainable energy. With its unique resources and energy mix, Brazil has the potential to become a reference point in the global energy transition, balancing economic development, energy security, and environmental responsibility.
It is the period of decision for Petrobras. It can continue down the high-carbon path, which is economically and socially risky, or it can lead the transformation into a more diversified and resilient model that takes advantage of Brazil's strengths (renewables, biofuels, biodiversity, technical capacity), with decarbonization and justice at its core. The UFRJ and Observatório do Clima reports give a very clear roadmap. The G20 declarations seem to confirm that Petrobras has some of these thoughts. The next step is to translate these intentions into machinery of large-scale action.
