In an announcement made during COP28, the National Confederation of Industry (CNI) released a revealing study on the future of decarbonization in Brazilian industry. According to projections, significant investments will be needed, around R$40 billion by 2050, to achieve the much-needed climate neutrality. Let's explore the findings and challenges outlined by this visionary study.

The path to a low-carbon economy is full of challenges, and the study highlights one of the main obstacles: the high cost of capital in Brazil. This factor, combined with the so-called “Brazil Cost”, increases investments in cleaner technologies and processes, making the transition a complex task. However, CNI sees significant potential if the right economic and political conditions are established to attract investment and drive innovation.

The CNI study highlights some sectors with notable potential for mitigating greenhouse gas (GHG) emissions in the medium and long term. Among them are the cement, steel, aluminum and planted forest sectors. The transition to cleaner technologies in these sectors could result in a significant reduction of millions of tons of CO2 by 2050.

The CNI designed three scenarios to assess whether Brazil will achieve its climate goals. In the reference scenario, maintaining current targets without a carbon pricing policy, emissions remain stable, compromising climate neutrality. In scenarios 1 and 2, which involve the adoption of carbon pricing policies, the prospects are more optimistic, indicating reduced emissions and economic growth.

The study concludes that through a carbon pricing policy and the carbon market, Brazil can achieve climate neutrality by 2050 and, at the same time, boost the country's economic activity, reducing unemployment. A balanced approach, which uses the revenues generated to reduce economic distortions and encourage job creation, appears to be the key to meeting the commitments of the Paris Agreement.