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4.105. Brazil has one of the world's most renewable energy matrixes. According to the National Energy Balance (BEN, EPE 2022), 44.7% of the domestic energy supply comes from renewable sources. The diversification of the energy matrix, which is made possible with the expansion of the supply of sugarcane derivatives, wind energy and biodiesel is contributing to the continuation of this high share. Renewable sources will continue to account for a large share of supply, mostly due to the use of hydropower, new renewables (wind & solar) and bioenergy, including biofuels.

4.106. Only 30% of Brazil's hydroelectric potential has been exploited. The potential for increased production of this renewable and affordable energy source is an integral part of the country's long term strategy for the sector. Widespread access to affordable energy is crucial to achieve the goals of sustainable development, to promote social inclusion and poverty reduction; to advance national integration and the reduction of greenhouse gas emissions; and to improve competitiveness. Brazil is, therefore, investing in research and in new technologies to improve the generation, transmission and distribution of energy.

4.107. Brazil also considers bioenergy, including biofuels, an indispensable tool for the expansion and diversification of the energy matrix. Nowadays, biomass [27] electricity – generated mostly from sugarcane processing plants – accounts for about 8% of Brazil's total electricity energy supply. By 2031, biomass, wind and solar generation are expected to supply 22% of the country's electricity energy needs. In the transportation sector, the use of ethanol and biodiesel plays a key role in the pursuit of sustainable development, climate change mitigation and energy security. The Brazilian case shows that the long term and large scale sustainable production and use of biofuels are possible, and Brazil continues to work towards the creation of an international market for biofuels.
[27] Including Urban Solid Waste and Biogas.

4.108. The Brazilian Biofuels Policy (RenovaBio), with the main objective of promoting the reduction of greenhouse gas emissions by expanding the production and use of biofuels in the transport matrix is a key development. Brazil is the second largest biofuels producer with a total of 411 kboe/d, just behind USA, the worldwide leader with a 665 kboe/d production. It is also important to point out that the Brazil's gasoline has 27% of anhydrous ethanol in its mixture, the higher percentage in the world.

5.6. On the environment, the country stands by the sustainability commitments reached in the Paris Agreement and at COP26. It is regulating the Carbon Market, and innovating in creating a methane market.

5.8. Brazil will also continue to be committed to the Southern Common Market (MERCOSUR), regional integration – as mandated by its Constitution – and to strengthening and fostering new bilateral and regional trade agreements (RTAs), with a view to promoting cooperation, sustainable development and mutually beneficial results. (...)

19. (...) Agricultural zoning requirements continue to link agricultural support to environmental sustainability. They condition producers' eligibility for concessional credit and subsidized insurance programmes. In addition, several specific programmes for both the commercial and family farming segments promote sustainable agricultural practices; they include credit for plantings on unproductive and degraded soils, credit for forest planting, and credit to modernize production systems and preserve natural resources.

20. (...) Domestic support for developing mining companies and sustainable technologies through an Inova Mineral joint initiative on credits, subsidies, cooperation projects between institutions and companies is available to selected firms. (...)

21. Brazil remains a net exporter of crude oil and importer of refined oil products. Its energy matrix continued to be considered one of the greenest in the world. (...) Brazil's 2017 National Biofuels Policy (RenovaBio) to support reaching the country's climate goals has been in line with its COP21 commitments. In its third year of full operation, RenovaBio has been consolidating itself as one of the largest decarbonization programmes for the fuel matrix in the world. Brazil retained its position as the world's second-largest producer and exporter of ethanol with a mandatory ethanol blend ratio fixed at 27%; in addition, other support measures for the production and consumption of ethanol, such as credit facilities and tax differentiation and cross-subsidization, remain in place. Brazil is the world's third-largest producer of biodiesel; the mandatory blending ratio of biodiesel added to oil diesel has increased, and their production continues benefiting from incentives and a regulated domestic market. (...)

1.3. (...) The annual average GDP growth rate for the period 2017-21 stood at 1%, an increase compared to the average of -0.4% in 2012-16. On the one hand, according to the World Bank and other analysts, the path to a full recovery in the medium term remains steep due to structural and fiscal vulnerabilities, the impact of resurgence of inflationary pressures (Section 1.2.3.2), and the exceptional drought reducing hydroelectricity generation and damaging the agricultural sector. (...)