Brazilian firms eye power solutions to cut emissions

The reduction of greenhouse gas emissions is becoming an increasingly important subject for Brazilian firms. A study from the business council for sustainable development (CEBDS) showed that in the last three years companies operating in the country have implemented 1,340 projects to cut emissions totaling US$88.5bn in investment, which avoided 217.9Mt of CO2.   

The energy sector plays a leading role as many firms are seeking power purchase agreements (PPAs) for supply from renewable sources to achieve sustainability goals. According to CEBDS president Marina Grossi, companies are also seeing PPAs as a way of having more autonomy to negotiate the energy they consume.   

“This has been growing fast and it's an interesting mechanism because it's negotiated in the free power market, so it doesn't depend on the government. It tends to grow further because its cheaper energy and it's a way of the companies achieving their emissions reduction targets,” Grossi told BNamericas.   

Much of this growth is helping support a major expansion of the renewables market. Numbers published Tuesday in the monthly report of energy trade chamber CCEE showed the country had 86 solar power units operating commercially at the end of June, compared with 55 a year before. Power generation capacity from solar units grew 86.6% over the same time last year to an average 485MW.   

Grossi says Brazil should have a more transparent and structured plan to help integrate its energy sources to take best advantage of them in a more strategic way.

“We need a more structured plan, in which the pre-salt and the natural gas market have their spaces but without getting in the way of renewables, such as wind and solar power generation, that have a big expansion expected ahead,” she said.   

In the meantime, there is growing support from private firms for carbon pricing initiatives. According to CEBDS data, around 57% of Brazilian companies already have internal policies on carbon pricing as a way of identifying risks in their operations.  

“Many companies defend carbon pricing because this allows energy transition to take place within the firms,” Grossi said.  

CEBDS has an open letter to defend carbon pricing measures in Brazil and has collected signatures of 31 CEOs and CFOs from some of the country’s largest companies such as bank Itaú and clothing retailer Renner. Power firms including the Brazilian subsidiary of Iberdrola also defend such mechanisms.  

“It's very important to regulate carbon pricing, this is not optional, it's part of the core business and of the sustainability of the business in the long term,” Iberdrola’s deputy director president Solange Ribeiro said recently in a statement.   

OIL AND GAS MARKET   

Firms operating in the Brazilian oil and gas sector are also targeting emissions reductions. State-run oil firm Petrobras, for example, signed an agreement with Norway’s Equinor to develop Latin America’s first offshore wind power project, and has been seeking new technologies to help optimize energy consumption on its offshore platforms. The firm aims to use new technologies to reduce emissions in its operations and expects to increase research and development investments for such solutions.   

The company also became a member in 2018 of the Oil and Gas Climate Initiative (OGCI), an independent organization created by energy firms in 2014 focused on reducing the collective average methane intensity of upstream operations.   

Other companies from the oil and gas value chain in Brazil are also looking at similar initiatives. Recently logistics company Wilson Sons published an inventory showing it cut emissions by 12% in 2018 with projects such as the substitution of diesel cranes for electric ones in its port operations and the application of better management practices in container and equipment movement, which increased efficiency. The company also applied new technologies to its tugboats, reducing energy consumption.   

The doubt remains, however, if the sector will be able to further reduce emissions amid the expected growth in coming years.