Source: Reuters
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  • Brazil has unveiled an extension to its coal shift until 2040 under a new “just energy transition” law that delays the transition by 13 years
  • In general terms, a “just transition” ensures the shift to greener resources is widespread and supports those who may be vulnerable to economic loss or arverse consequences
  • Under previous policies, Brazilian subsidies for thermal coal-powered plants were due to end by 2027
  • The law was celebrated as a policy “to help the coal sector” and an “important achievement” for the policymakers

Brazil has unveiled an extension to its coal shift until 2040 under a new “just energy transition” law that delays the transition by 13 years.

In general terms, a “just transition” ensures the shift to greener resources is widespread and supports those who may be vulnerable to economic loss or otherwise adverse consequences.

Under previous policies, Brazilian subsidies for thermal coal-powered plants were due to end by 2027 while authorisations for three large plants in Santa Carina were meant to expire in 2025.

The new law cancels previous policies, negates previous climate-driven deadlines and mandates the government must purchase energy created by the thermal coal plants in Santa Carina at a set price.

Additionally, it has enforced that 80 per cent of the energy requirements for the area be from thermal plants.

“This is bad news for consumers and the environment,” said Ricardo Baitelo, project coordinator at the Institute of Energy and Environment (IEMA), a Brazilian non-profit organisation.

The most recent information from Our World in Data suggests half of Brazil’s energy is crude while the rest is renewable. The data suggests overall renewable energy favouring trends, but the new law may change future results.

According to the Brazilian industry group ABRACE, the new law will cost consumers 840 million reais (A$206.11 million) more per year because coal is more expensive than renewables such as hydro and wind energy.

Santa Carina politicians celebrated the new law because the state is considered the coal capital of Brazil.

The law was celebrated as a policy “to help the coal sector” and an “important achievement” for the policymakers.

ABRACE and other industry bodies warned Congress they were “on the wrong side of the movement towards energy transition, with significant environmental impact, extending inefficiency costs to all energy consumers.”

Mr Baitelo added that there was a trend of politicians interfering in national energy plans to benefit more expensive and polluting systems.

Under the United Nations climate policy, Brazil had pledged to half its emissions by 2030 and become carbon neutral by 2050.

“A real just transition needs to be built … by presenting alternatives. There has to be a heavy investment in that,” Mr Baitelo said.

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