Petrobrás is one Brazil’s biggest companies, and one of the few things next to Samba, football and Carnival, that Brazilians are intensely proud of.
In fact, it has a unique part in the nation’s history. While most large corporations are born in the hands of a few, hoping to enrich themselves, Petrobrás was born at the time of a popular people’s movement in the 1950’s called, ‘The Oil is Ours’.
It began as a truly co-perative corporation.
In today’s world, its status as a fossil fuel giant shrouded in corruption is beginning to shift this popular perception greatly.
The situation of diminishing profits for fossil fuel companies has become a worldwide trend. It may take a few years for these record profit-makers to hit bankruptcy for sure.
But as Craig Mckenzie, Head of Sustainability at Scottish Widows Investment Partnership noted, “If you look at the return on capital from the [oil] majors over the last five years, it has been very disappointing”.
Mckenzie further added that their annual revenues have “fallen by a third and is now barely covering costs”.
Believe it or not, but Mckenzie even goes so far to argue that major fossil fuel companies like Petrobrás now “need to avoid big splurges of capital on projects that may not pay off. ”
Whatsmore, many of these fossil fuel majors are now having to leverage their current losses on potentially new stores currently being explored. This is a risky move, especially considering the growing legislative wave against big emitters.
It may not have crashed yet, but it’s certainly building up to come crashing down on the biggest emitters in the next 10 years.
Even President Barack Obama agrees when he said that “we’re not going to be able to burn it all.”
In their wake, alternative energies in Brazil are ceasing to be seen as alternatives and moving towards the centre. Globally, investments in renewable energies grew by 16% in 2014, to a total of £205bn.
After all, these energies allow even those countries without oil and coal to develop their economy.
Many universities like Stanford and Glasgow have already ceased to invest in fossil fuels, and Harvard students are fighting for their university also has the same attitude.
Already the INDCs (Intended Nationally Determined Contributions) produced by Norway, Mexico, the EU and Switzerland show strong support for a global switch away from fossil fuels towards renewable source on a global scale.
What we need is for other big emitters like Brazil to use this as a chance to stand up and join the renewables revolution.
Following a public consultation across Brazil, we have a snapshot of just how ready we are to join this revolution. You can now view the preliminary report on Brazil’s INDC here.
As you can see, Brazil is planning to make a number of investments in wind and solar energy, especially in the country’s North East. Current estimates are expected to exceed USD2.2 billion. This comes with just over USD1 billion being spent in Bahia alone, with plans for large solar and wind farms to begin operations in the beginning of 2017.
One of the three wind energy farms planned will become the largest wind farm in Latin America. It will be known as the the Wind Complex Fields Neutral, and will overtake the Wind Garibatu farm which was opened in the state of Rio Grande do Sul in February this year, expanding over 4800 hectares.
Current plans include 30 different projects (16 wind and solar 14) in Bahia, while another 31 projects will be spread across São Paulo, Paraíba, Ceará, Piauí, Pernambuco, Minas Gerais, Rio Grande do Norte and Goiás.
While Petrobrás, who currently suffers from scandals and political crises, the renewable energy companies are growing in full swing.
Global investments are following a similar trend. The UK made the investment of £29.8bn in the renewables sector last year.
Germany has also begun its own Energy Transition, and aims to remove all nuclear and fossil fuels by midcentury, while the US and China have plans to develop their own renewable energy sovereignty, and found be ready to enter a new wave of economic competition.
The world is moving toward a new era. Its time for Pertobras, and the rest of Brazil to catch up.
This post was written by Lais Vitória Cunha de Aguiar as part of the Climate Tracker initiative