CANDIOTA, Rio Grande do Sul (Reuters) – One of the last coal plants in Brazil returned to operation in recent months, after a powerful business group invested millions to keep its turbines running in the mining city of Candiota, in the southern portion of Rio Grande do Sul.
Âmbar, the company that owns the plant and controlled by billionaire brothers Wesley and Joesley Batista, is betting that even Brazil, where renewable and cheap sources produce more than 80% of electricity, will not stop burning coal anytime soon, despite the fuel being one of the main causes of global warming.
As host of the United Nations climate summit, COP30, this month, Brazil is encouraging countries to abandon fossil fuels. President Luiz Inácio Lula da Silva lamented during a leaders’ summit in the Amazon city of Belém this week that the war in Ukraine had led to the reopening of coal mines.
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Still, Candiota and five other coal plants continue to produce 3% of Brazil’s electricity, illustrating how pressure from interest groups and the lack of a transition plan can maintain the use of coal even in a country with a strong presence of renewable energy.
“Brazil absolutely has the potential, with all the solar resources, plus hydropower and wind, to decommission these coal plants,” said Christine Shearer, who monitors the coal sector at the think tank Global Energy Monitor.
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‘The strength of the coal lobby, especially in mining states, is why these plants still exist.’
The Candiota plant’s regulated contract to supply power expired last year, leading to the closure of local businesses and the departure of many residents from the city.
But the plant returned to operation selling energy on the short-term market, helping to stabilize electricity supply during peak times and when solar and wind generation declines.
Congress and the federal government have also thrown a lifeline to coal plants. Last month, parliamentarians approved a provisional measure with a device that guarantees contracts until 2040 for plants powered by national coal, such as Candiota. Lula can still veto the measure.
New auction opened for coal
The Brazilian government also enabled coal to participate in a capacity auction scheduled for March 2026, which aims to reinforce energy security by contracting plants, mainly thermoelectric plants, that can be activated quickly when wind and solar sources are not generating.
The Ministry of Mines and Energy stated that contracting these thermal plants will make the electrical system more reliable, allowing the addition of more renewable supply to the matrix.
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The inclusion of coal surprised experts, who say coal plants do not start quickly and therefore do not offer the necessary flexibility.
Critics attribute the continued burning of coal to a lack of long-term planning, while large amounts of clean energy end up being wasted due to insufficient demand and the absence of transmission lines. They say this makes the government vulnerable to pressure from coal and natural gas groups, despite the higher financial and environmental costs.
The Batista brothers bought the Candiota plant without a new long-term contract in sight because “they saw the possibility of being successful in their pressure instruments,” said Luiz Eduardo Barata, president of the National Energy Consumers Front, an entity that criticizes support for coal.
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The environmental group Arayara, another critic of Âmbar, is trying to suspend the plant’s environmental license in court.
In a statement, Âmbar stated that the coal that supplies its Candiota plant is ‘safe and widely available for the electrical system, being ideal for ensuring security of supply’.
The company denied depending on political influence to obtain a new contract for Candiota or other plants in its portfolio. Âmbar accused critics of representing the interests of large energy consumers to the detriment of smaller ones, “regardless of the needs of the electrical system, the environment and the Brazilian population”.
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No just transition
Âmbar’s efforts to keep coal alive put Brazil on a list of countries like India and South Africa where powerful interest groups have hampered efforts to eliminate coal from the global energy system, a fuel still considered essential to local economies in regions like Candiota.
Closing the plant permanently would affect not only the Âmbar enterprise, but also the local mines that supply it and cement factories that reuse coal ash, resulting in the loss of around 10,000 jobs in the region.
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José Adolfo de Carvalho Junior, who manages one of the coal mines in the city of Candiota, said the cost of closing the only industry that offers quality jobs in the region is not worth it.
‘Will turning this off here solve the CO2 problem on the planet? No, it’s literally a drop of water in the ocean,’ he said.
The plant’s uncertain future leaves residents apprehensive about their livelihood, said Graça dos Santos, who was fired from the plant after her contract with the government ended.
The deadline for closing the plant “needs to be extended for a fair energy transition to happen,” she said. “It’s not fair to leave an entire population without work.”
But the government of President Luiz Inácio Lula da Silva does not have a transition plan for Candiota and has not significantly advanced plans for the remaining coal plants.
The Candiota region also produces beef, wine and olive oil, industries that could absorb coal workers with some investment, according to João Camargo, founder of a seed producers’ cooperative.
“They didn’t create any conditions for the transition,” he said.
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At the local coal miners’ union, leader Hermelindo Ferreira points to maps showing the regions that would lose industrial activity — and the associated jobs — if the plant were closed.
Still, he admits that confidence in the future of coal is waning in Candiota. Some workers have already moved to neighboring cities in search of better opportunities.
Even as he fights to save jobs, Ferreira said he is encouraging colleagues to learn new skills. He himself has already obtained certification to carry out maintenance on towers that measure wind speed, in the hope that the wind industry will invest in the region.
‘You don’t put all your eggs in one basket,’ he said.
(Reporting by Leticia Fucuchima; Additional reporting by Valerie Volcovici in Belém)
