Brazil must direct its oil wealth towards a green economic transformation, despite new oil expansion plans
A new report by Climate Strategies, authored by Nicolas Lippolis, a researcher at the Columbia Climate School, urges the country to leverage its unique position in the fossil fuel market to strengthen its energy transition
Credit: Freepik (AI-generated image)
Whilst Brazil begins drilling an oil well in the Foz do Amazonas Basin in the Atlantic Ocean, an unprecedented report urges the country to leverage its unique position in the fossil fuel market to strengthen its energy transition and transformation into a global clean energy leader.
The study Resilient, but not yet transformative: Brazil’s oil and gas sector in a decarbonising world (access here) highlights forecasts of declining global oil demand whilst Brazil opens new exploration frontiers. The opportunity is indeed to finally invest oil revenue into the energy transition and economic transformation.
The publication is part of the Prosperity Post Fossil Fuel (PPFF) Policy Dialogue on Just Energy Transitions, an initiative by the think tank Climate Strategies, which brings together representatives from fossil-fuel-dependent economies to navigate the risks and opportunities of the oil and gas transition.
“Strengthening the management of oil revenues, improving policy coordination on sustainable fuels, and financing innovation in clean energy technologies could transform Brazil’s oil wealth into a catalyst for a green economic transformation,” says economist Nicolas Lippolis, author of the PPFF report, researcher at the Columbia Climate School, and founder of the think tank Centre for Energy, Finance and Development – CEFD.
Most current forecasts, including those from the International Energy Agency (IEA), expect global oil and gas demand to peak by 2030, as competitive low-carbon technologies replace fossil fuels in their largest uses. “Even as global demand falls, Brazil’s oil production will likely remain competitive, but the country is doing little to channel oil revenues into sectors that can thrive in a decarbonising world,” concludes Lippolis.
Among the impacts Brazil could still face are reduced public revenues due to lower oil prices. This will be particularly felt in oil-dependent municipalities in the states of Rio de Janeiro, Espírito Santo and São Paulo.
The country possesses the technology, renewable energy resources (including critical minerals) and agricultural raw materials needed to become a dominant global player in low-carbon fuel markets. However, without a more strategic public policy to leverage these advantages, Brazil risks reproducing its position as a commodity exporter and missing out on its clean energy potential.
The publication emphasises that seizing these opportunities will require intentional, evidence-based decisions in order to:
- Improve the management of fossil fuel revenues to enable transparent and strategic investments in climate mitigation and adaptation.
- Leverage domestic renewable energy mandates, as well as Petrobras’s technological know-how and financial resources, to build strategic green value chains.
- Undertake dedicated planning to integrate renewable resources (biomass, green hydrogen) and hydrocarbon infrastructure (refineries, pipelines) to catalyse the development of low-carbon fuels, such as sustainable aviation fuel (SAF), advanced biofuels and synthetic fuels.
- Adopt a foreign policy strategy that attracts the investments and technologies needed to strengthen clean energy sectors.
Read the full Brazil case study at this link. And access the main 2025 report of the Prosperity Post Fossil Fuel project here, authored by Greg Muttitt. The project is carried out in partnership with Salzburg Global, with support from the Stanley Center for Peace and Security and the Windward Fund.
About Prosperity Post Fossil Fuel
The PPFF brings together policymakers, leading researchers and key stakeholders from economies dependent on oil and gas. The objective is to foster visionary leadership and present evidence-based policy solutions to support the phasing out of fossil fuels and enable just energy transitions.
The PPFF responds to the need for a dedicated space for research-informed transnational dialogue to guide policymaking and decision-making, aligning expectations and priorities among fossil-fuel-dependent economies as the world moves away from these resources.
The PPFF provides a neutral space for productive, off-the-record discussions, highlighting cutting-edge analysis, promoting just transition strategies and identifying pathways to prosperity that align climate and development needs.
