As the United Nations Climate Change Conference (COP28) opens in Dubai this week, Brazil will present the world with a contradiction: while promising to accelerate its energy transition, the country continues to invest heavily in oil.
One of the key players in this area is Petrobras. In April, the country’s state-run oil company created a new division to oversee its work on energy transition and renewables. Meanwhile, in a statement on its 2024-2028 strategy released this Friday, the company says it will invest BRL 11.5 billion (USD 2.35 billion) in low-carbon projects without suddenly abandoning oil production.
Petrobras is also pushing for permission to drill for oil at the mouth of the Amazon River, a project that is still awaiting environmental approval and has proved controversial due to its potential threat to a sensitive and biodiverse area of the Amazon. The company is also looking to expand internationally, having announced its intention to open a subsidiary in China in 2024 to facilitate trade and partnerships between the two countries.
There is much speculation about Petrobras’ next steps, as its 2023-2027 strategic plan — launched during the administration of former President Jair Bolsonaro — deepened the company’s commitment to fossil fuels and buried renewable energy projects, according to André Luis Ferreira, executive director of the Institute for Energy and Environment (IEMA) and professor of environmental management at the University of São Paulo. Under the previous plan, Petrobras planned to spend less than 1 percent of its total investments on clean energy.
“With the new government [of President Luiz Inácio Lula da Silva], we’ve seen talk that [Petrobras] is going to invest in renewable energy again,” says Mr. Ferreira. “We need to pay attention to this movement and the new plan, what the discourse and practice will be.”
Various studies and organizations have highlighted the need for countries to drastically reduce and eventually phase out fossil fuels. A study published in Nature, for example, estimated that oil and gas production should be reduced globally by 3 percent per year by 2050 in order to limit global warming to 1.5°C by the end of the century — a target accepted by signatories to the Paris Agreement, including Brazil, to avoid the worst effects of climate change.
Contrary to this trajectory, Brazil’s oil production growth exceeded expectations in October, with the country setting new production records, according to the latest report from the International Energy Agency.
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