Energy Efficiency in Emerging Economies (E4) programme findings and work
IEA (2021), E4 Country Profile: Energy Efficiency in Brazil, IEA, Paris https://www.iea.org/articles/e4-country-profile-energy-efficiency-in-brazil
Brazil is the largest single energy consumer in South America, accounting for about 36% of total final energy consumption in the region. Since 1990, energy sector CO2 emissions have more than doubled, with oil as the largest source of emissions (over 60%), followed by coal and natural gas (approximately 18% each). Challenges remain to meeting the Sustainable Development Goals, including ensuring access to clean cooking and universal access to energy. While Brazil has one of the greatest shares of renewable energy in the world, this is coming under threat, as changing weather patterns and increasing demand place stress on the electricity system. In this context, advancing energy efficiency as an alternative to fossil fuel backup generation is particularly important.
Prior to 2014, Brazil experienced an increase in economic growth with minor improvements in energy efficiency. The majority of avoided energy use was due to structural changes in the economy, where less energy intensive sectors developed more than energy intensive ones. The economic contraction after 2014 resulted in a reduction in economic activity and corresponding final energy use. However due to worsening energy efficiency, the final energy use was 1.3% higher than if the efficiency levels had been maintained during this period.
The efficiency gains made between 2014 and 2018 in the buildings sector were offset by a decline in industry and transport energy efficiency.
Progress in energy efficiency can be correlated to policy coverage. In 2018, 7.3% of final energy use was covered by mandatory energy efficiency policies. The introduction of building codes and appliance standards has increased the coverage in buildings to 19%, while motor standards are responsible for the coverage of 8% in industry. The minimal coverage in transport is due to the lack of mandatory fuel economy standards for cars and trucks.
Between today and 2040, Brazil could limit its increase in energy use to just 22% according to the Efficient World Scenario (EWS). This would save 2 EJ of additional energy compared to the New Policies Scenario (NPS) and savings would mainly come from transport (49%) and industry (42%), followed by the buildings sector.
The cost effective measures of the EWS would also contain CO2 emissions to current levels by 2040 even while GDP continues to rise.
The opportunities to increase energy efficiency based on the Efficient World Scenario are:
- In transport, where the potential for energy savings is highest, Brazil could attain these energy savings by expanding fuel efficiency. Currently, the average fuel efficiency of passenger vehicles is nearly 24% lower in Brazil than in the European Union and fuel efficiency standards for passenger cars or trucks have yet to be implemented.
- In the industrial sector, measures aimed at increasing the adoption of energy management systems, which are key to unlocking gains across the wider motor-driven systems, present an opportunity for further savings.
- In the buildings sector, space cooling will be the key contributor to future energy use. In the NPS, space cooling nearly quadruples by 2040 compared with current levels. The EWS demonstrates opportunities to limit this increase, although demand would still triple. Maintaining and strengthening building codes and standards for space cooling equipment are key policy mechanisms to realise these opportunities. Space cooling efficiency gains will also be important in managing peak and overall electricity demand, thereby reducing pressure on Brazil’s electricity network.
The E4 Programme has been working with Brazil on strategic areas of policy development across key sectors, including buildings, industry and transport. Support has included policy dialogue, capacity building and strengthening cooperation on energy efficiency data and indicators. The E4 Programme conducted an energy efficiency training week for Latin American policy makers in Rio de Janeiro in 2017. More recently, the E4 Programme has deepened cooperation through webinars, through launch of its online indicators course in Portuguese, and through close cooperation on data and analysis.
One such initiative has led to Brazil aligning its energy efficiency data and indicators with the IEA’s. This alignment allowed an undertaking of benchmarking analyses to understand better the country’s target setting potential in terms of efficient use of energy in household appliances, heavy industry and light duty transport. This also builds a foundation for advancing energy efficiency and attaining the energy savings potential in the Efficient World Scenario.
The E4 Programme also played a pivotal role in Brazil’s development of a pilot auction scheme for energy efficiency by facilitating technical dialogues with Portugal and Switzerland, holding workshops, and providing input to the draft auction rules. The scheme aims to address the under-spending of distribution companies in the existing utility energy efficiency obligations, thereby empowering implementation of energy efficiency.