Brazil has the potential to turn into one of the main world -carbon steel and aluminum production centers, according to a study presented by Boston Consulting Group (BCG) during the Brazil Climate Summit Europe, held in Paris. The event, in France, brought together entrepreneurs, investors and industry experts to discuss the role of Brazil in the global climate transition.
According to the report, the country can attract between US $ 2.6 trillion and $ 3 trillion in investments by 2050, leveraging its natural and energy advantages to lead the decarbonization of heavy industry.
The study points out that Brazil has 17% of global iron ore reserves and 9% of bauxite, essential raw materials for steel and aluminum production, respectively. However, its participation in the beneficiation stages is still modest: only 2% of the world’s gross steel production and 1% of primary aluminum.
In addition to mineral resources, the country benefits from a largely renewable electrical matrix, which reduces the carbon footprint of industrial processes. This differential places Brazil in advantage of major broadcasters such as China and India.
Export potential can reduce emissions from Europe
If Brazil increases its exports to the European Union in 15 to 20 million tons of steel and green aluminum per year, the EU could reduce up to 50 million tons of CO2 equivalent in scope 3 emissions – those associated with the supply chain, outside the direct control of companies.
This volume would represent a 20-22 times multiplication from current exports from Brazil to the European bloc. The study estimates that this expansion may attract between ten and 15 billion euros in new investments to the country.
In a hypothetical scenario, in which Brazil equals its participation in metal processing to its participation in mining, there would be a global reduction of 125 to 165 million tons of CO2 per year. In the case of steel alone, the drop would be 85 to 105 million tons; In aluminum, between 40 and 50 million.
This projection considers the replacement of production in countries with greater carbon intensity by Brazilian processing, taking advantage of the country’s energy efficiency.
Investments are already underway in Brazil
The BCG report also highlights ongoing initiatives to enable the green transition in the industrial sector. Among them:
- Brazil’s Investment Platform (BIP): Created in 2024 by the Ministry of Finance and BNDES, has already mobilized US $ 21.5 billion in 13 pilot projects, including green hydrogen hubs.
- ECO INVEST BRASIL: Climate financing mechanism that has already attracted US $ 7 billion, being US $ 6.2 billion and US $ 1.1 billion from the government.
The study also analyzes the impacts of Carbon Border Adjustment Mechanism (CBAM), a European mechanism that will tax carbon emissions. CBAM currently considers only direct emissions (scope 1), which favors countries such as China, which practices lower prices.
But if the EU includes scope 2 (emissions associated with electricity used in production), Brazilian aluminum will become more competitive due to the use of clean energy. In this scenario, Brazil’s products could help European companies meet environmental goals at lower cost.
