Adaptation of Existent Methods for Setting Decarbonization Targets in the Brazilian Power Sector Companies

Hugo Barros Bozelli, Bruna Silveira Guimarães, Alex Azevedo dos Santos, Priscila Grutzmacher, Caroline Cristine Botta, José Eduardo Nunes da Rocha and Amaro Olimpio Pereira ()
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Hugo Barros Bozelli: Energy Planning Program, Institute for Postgraduate Studies and Research in Engineering, Federal University of Rio de Janeiro (PPE/COPPE/UFRJ), Rio de Janeiro 21941909, Brazil
Bruna Silveira Guimarães: Energy Planning Program, Institute for Postgraduate Studies and Research in Engineering, Federal University of Rio de Janeiro (PPE/COPPE/UFRJ), Rio de Janeiro 21941909, Brazil
Alex Azevedo dos Santos: Waycarbon Soluções Ambientais e Projetos de Carbono AS, Rio de Janeiro 30140080, Brazil
Priscila Grutzmacher: Waycarbon Soluções Ambientais e Projetos de Carbono AS, Rio de Janeiro 30140080, Brazil
Caroline Cristine Botta: Waycarbon Soluções Ambientais e Projetos de Carbono AS, Rio de Janeiro 30140080, Brazil
José Eduardo Nunes da Rocha: Energy Planning Program, Institute for Postgraduate Studies and Research in Engineering, Federal University of Rio de Janeiro (PPE/COPPE/UFRJ), Rio de Janeiro 21941909, Brazil
Amaro Olimpio Pereira: Energy Planning Program, Institute for Postgraduate Studies and Research in Engineering, Federal University of Rio de Janeiro (PPE/COPPE/UFRJ), Rio de Janeiro 21941909, Brazil

Sustainability, 2025, vol. 17, issue 2, 1-19

Abstract: Power sector companies are crucial in global decarbonization, accounting for 32% of global greenhouse gas emissions. Despite frameworks like the Science-Based Targets initiative (SBTi), there is ongoing debate about the adequacy of current target-setting methods and emissions allocation. This paper focuses on Brazil’s diverse, renewable-heavy energy mix and complex regulatory environment. It highlights the challenges faced by vertically integrated and predominantly renewable energy companies in meeting SBTi goals, despite their commitment to climate action. The study finds that the current SBTi methodology fails to accurately reflect the efforts of these companies, often penalizing them for emissions beyond their control. An alternative methodology is proposed that excludes unmanageable emissions, aligning targets more closely with operational actions while maintaining transparency in reporting. A key finding is that this new methodology avoids distortions caused by external factors, ensuring emissions reductions are tied to company actions. For renewable power utilities, the methodology emphasizes high-emission categories within the value chain, such as asset construction and maintenance, promoting deeper engagement in decarbonization. A new tool and scenarios were developed, showing that proposed adjustments enhance target accuracy, support global emissions reduction goals, and provide a more transparent and equitable way for companies to report emissions, distinguishing between controllable and external factors.

Keywords: decarbonization targets; science-based targets initiative (SBTi); power sector; sectoral decarbonization approach; renewable energy companies; vertically integrated companies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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