Decarbonizing Brazil’s Steel, Aluminium and Aviation Sectors

Brazil has the potential to lead in near-zero carbon products due to its clean energy mix (85% renewable) and vast natural resources. However, the transition in the steel, aluminium, and aviation sectors is hindered by high capital costs (12.75% benchmark lending rate), a lack of willingness to pay green premiums, and policy gaps. The report recommends leveraging blended finance, implementing a cap-and-trade carbon market, and utilizing 2G feedstocks for sustainable aviation fuel (SAF) to achieve net-zero goals by 2050.

• Brazil's steel sector emissions could increase by approximately 30% to 57MT CO2 by 2050 if current production methods persist, despite the sector's current emissions intensity (1.3-1.7t CO2e per tonne) being lower than the global average of 2.0t CO2e.
• The Brazilian aluminium sector is already significantly cleaner than the global average, with a carbon footprint of 4.5-6.5t CO2e per tonne of smelted aluminium, compared to a global average of 16.6t CO2e.
• Brazil's aviation sector has a potential to reduce emissions by 15% by 2030 by converting 2 billion tonnes of annual waste and residue into 9 billion litres of sustainable aviation fuel (SAF).
• High borrowing costs are a major barrier across all three sectors, with Brazil's benchmark lending rate at 12.75% as of September 2023, significantly higher than rates in the US (5.25-5.5%) and India (6.5%).
• The implementation of a cap-and-trade carbon market is considered essential to make low-carbon technologies competitive; for instance, a carbon price of $36-72/t CO2 would make the H2-DRI process competitive with traditional steel production.
• Brazil's aluminium recycling is a global leader, particularly in beverage cans, which reached a 100% recycling rate in 2022.
• The Brazilian government has introduced the 'Fuel of the Future Bill', mandating a reduction in aviation carbon intensity by 1% starting in 2027, increasing to 10% by 2037.
• The Brazilian Development Bank (BNDES) is a critical financial actor, having financed over 70% of the country's power and renewables expansion since 2000.
• A significant opportunity exists to repurpose the mandatory 1% gross revenue R&D levy from oil and gas producers to fund high-risk decarbonization projects.

APA

World Economic Forum (2024). Decarbonizing Brazil’s Steel, Aluminium and Aviation Sectors. https://www3.weforum.org/docs/WEF_Decarbonizing_Brazil’s_Steel_Aluminium_and_Aviation_Sectors_2024.pdf

Chicago

World Economic Forum. Decarbonizing Brazil’s Steel, Aluminium and Aviation Sectors. 2024. https://www3.weforum.org/docs/WEF_Decarbonizing_Brazil’s_Steel_Aluminium_and_Aviation_Sectors_2024.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Decarbonizing Brazil’s Steel, Aluminium and Aviation Sectors |date=January 2024 |url=https://www3.weforum.org/docs/WEF_Decarbonizing_Brazil’s_Steel_Aluminium_and_Aviation_Sectors_2024.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2024decarbonizing, author = {{World Economic Forum}}, title = {{Decarbonizing Brazil’s Steel, Aluminium and Aviation Sectors}}, institution = {World Economic Forum}, year = {2024}, month = jan, url = {https://www3.weforum.org/docs/WEF_Decarbonizing_Brazil’s_Steel_Aluminium_and_Aviation_Sectors_2024.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }