Brazil will hold the COP30 climate summit in November, where it is expected to lead the world in supporting a green transition. In recent years, Brazil has made greater efforts to increase its renewable energy capacity and protect the Amazon rainforest from deforestation activities. However, in the lead-up to the summit, Brazil’s government has announced plans to auction new areas for oil and gas exploration and expand fossil fuel production over the coming years, decisions that are at odds with its COP30 presidency.
When Luiz Inácio “Lula” da Silva went up against former president Jair Bolsonaro in the 2022 elections, the world was prepared for a distinct shift in policy, as left-wing Lula pledged to reduce deforestation and support climate policies. Bolsonaro’s legacy was one of deforestation, as he dismantled environmental policies through budget cuts, weakened institutions, and rolled back regulations during his time in office. In contrast, the Lula administration has focused on environmental restoration, reinstating key environmental policies, which contributed to a 43 percent reduction in deforestation by early 2023.
However, despite Lula’s strong support for climate policies throughout his electoral campaign, the Brazilian president appears to be going back on some of his pledges by backing higher levels of fossil fuel production. Earlier in the month, the Brazilian government announced plans to extract $6.2 billion from the country’s oil industry to boost the country’s economy.
Brazil still has large untapped and unexplored areas of the pre-salt zone that it can use to appeal to investors, much to the dismay of climate activists. Earlier in the year, the government said it planned to tap into the national oil fund, which was created in 2010 to collect royalties from oil and has accumulated $3.5 billion to date. However, more funding is expected to be needed to fulfil many of the Lula administration’s pledges.
This month, Brazil’s government held auctions for oil exploration, ahead of COP30. The country’s oil sector regulator, ANP, plans to auction the exploration rights to 172 oil and gas blocks spanning 56,000 square miles of mainly offshore area. It includes 47 blocks in the Amazon basin, which is considered a sensitive area near the river. Fossil fuel producers have often viewed this area as a promising new oil frontier, despite the environmental concerns around exploration there. This week, Exxon Mobil and Chevron purchased offshore blocks, suggesting greater diversification in Brazil’s oil industry as it opens its door to American firms.
Brazil’s state-owned oil company, Petrobras, has long been pushing to drill in the Amazon basin and President Lula recently put pressure on the environmental watchdog, Ibama, to deliver the environmental licence to drill in the region. Brazil plans to become the world’s fourth-largest oil producer, aiming to expand its oil and gas production by 20 percent by 2030, a target that is supported by Lula, despite his strong climate pledges. “We want the oil because it will still be around for a long time. We need to use it to fund our energy transition, which will require a lot of money,” Lula said in February.
Climate groups and environmentalists around the world oppose the government’s plan over concerns that new exploration could threaten biodiversity and put Brazil’s climate aims in jeopardy. “This auction is posing really serious and grave threats for biodiversity, communities and climate,” said Nicole Figueiredo de Oliveira, the executive director of the civil society organisation Instituto Internacional Arayara.
Meanwhile, Brazil’s Instituto ClimaInfo has calculated that the burning of oil and gas from all 172 blocks on offer could result in the release of over 11 billion tonnes of carbon dioxide equivalent. The areas in the Amazon basin alone could release 4.7 billion tonnes of CO2 equivalent, according to the study. Environmentalists argue that several of the environmental assessment studies in the blocks up for auction are outdated. In addition, several of the areas in question overlap with Indigenous territories or conservation areas, suggesting that greater analysis needs to be done to understand the extent of the damage new exploration may bring.
Petrobras said it had conducted “detailed environmental studies” to ensure the safety of the proposed oil exploration and assured the public that its efforts were “fully in line with the principles of climate justice, biodiversity protection, and the social development of the communities where it operates”. However, scientists and environmentalists are not so certain. Meanwhile, the International Energy Agency has repeatedly stated that the development of new oil and gas fields is incompatible with global efforts to reach net-zero emissions by 2050.
Brazil’s aim to significantly increase fossil fuel output and revenues in the coming decades is at odds with its official climate targets. President Lula has gone back and forth on his climate and fossil fuel pledges, with the constant contradictions leading many to question whether Brazil will be able to advance its green transition. Meanwhile, the country’s recent oil and gas auctions have opened the door for new exploration projects from national and foreign companies in ecologically important regions of Brazil, leading to widespread criticism and opposition.