Energy in Brazil

Brazil is the 7th largest consumer in the world and the largest in South America. At the same time, it is an important oil and gas producer in the region and the world's second largest ethanol fuel producer. The government agencies responsible for energy policy are the Ministry of Mines and Energy (MME), the National Council for Energy Policy (CNPE), the National Agency of Petroleum, Natural Gas and Biofuels (ANP) and the National Agency of Electricity (ANEEL). State-owned companies Petrobras and Eletrobras are the major companies in Brazil's energy sector, as well as Latin America's.

In 2020, Brazil derived roughly one third of its total energy supply from oil, and another third from biofuels. Access to electricity across the country is almost universal, making Brazil’s energy sector one of the least carbon-intensive in the world.

The main characteristic of the Brazilian energy matrix is that it is much more renewable than that of the world. While in 2019 the world matrix was only 14% made up of renewable energy, Brazil's was at 45%. Petroleum and oil products made up 34.3% of the matrix; sugar cane derivatives, 18%; hydraulic energy, 12.4%; natural gas, 12.2%; firewood and charcoal, 8.8%; varied renewable energies, 7%; mineral coal, 5.3%; nuclear, 1.4%, and other non-renewable energies, 0.6%.

In the electric energy matrix, the difference between Brazil and the world is even greater: while the world only had 25% of renewable electric energy in 2019, Brazil had 83%. The Brazilian electric matrix is composed of: hydroelectric energy, 64.9%; biomass, 8.4%; wind energy, 8.6%; solar electric, 1%; natural gas, 9.3%; oil products, 2%; nuclear, 2.5%; coal and derivatives, 3.3%.

In 2021, Brazil's energy consumption comprised a mix of sources, with crude oil and other petroleum liquids making up 44.2%, followed by renewables (including hydro) at 37.5%, natural gas at 11.6%, coal at 5.5%, and nuclear at 1.3%. Brazil's total energy production grew by an average annual rate of 1.5% from 2011 to 2021, primarily fueled by petroleum and other liquids. In 2021, Brazil's energy production accounted for 2.0% of global production and 48.8% of South America's total. Energy consumption in Brazil increased at a slower pace, with an average annual growth rate of 0.5% between 2011 and 2021, compared to 3.3% between 2000 and 2010. Brazil continues to be one of the world's largest energy consumers, accounting for 2.0% of global consumption and 53.3% of South America’s consumption.

In 2021, Brazil's electricity generation was primarily driven by renewables, accounting for 75.9% of the total electricity produced, with hydro contributing 54.8% and other renewables making up 21.1%. Following renewables, natural gas contributed 14.5%, while coal and nuclear energy each contributed 4.0% and 2.2%, respectively. Crude oil and other petroleum liquids contributed 3.4%. Brazil ranks as the world's third-largest hydropower producer, following China and Canada. In 2021, Brazil's hydroelectricity generation amounted to 363 terawatt-hours, representing 9% of global hydropower output.

At the end of the 1990s and the beginning of the 2000s, Brazil's energy sector underwent market liberalization. In 1997, the Petroleum Investment Law was adopted, establishing a legal and regulatory framework, and liberalizing oil production. It created the CNPE and the ANP, increased use of natural gas, increased competition in the energy market, and increased investment in power generation. The state monopoly on oil and gas exploration ended,^[how?] and energy subsidies were reduced. However, the government retained monopoly control of key energy complexes and regulated the price of certain energy products.

Current^[when?] government policies concentrate mainly on improving energy efficiency in both residential and industrial sectors, as well as increasing use of renewable energy. Further restructuring of the energy sector will be one of the key issues for ensuring sufficient energy investments to meet the rising need for fuel and electricity.