Unlocking finance for industrial decarbonisation in Brazil

Implementing partner: WayCarbon
Consortium Partners: WRI Brazil 
Implementation period: January 2025 - December 2026

 

 

 

 

 

Brazil's commitment to the Paris Agreement requires a fast shift towards industrial decarbonisation, as this sector is crucial for the country to achieve its climate goals. Brazil’s leadership in the G20, BRICS, and upcoming COP30 in Belém strengthen the country’s ability to influence global climate policy, while implementing robust domestic policies, such as the New Industry Brazil, Ecological Transformation Plan or the National Climate Plan and its sector-specific emissions targets.
 
To achieve these ambitious goals it is needed to close the significant climate finance gap by mobilising national and international funds, establishing effective financial mechanisms, and aligning industrial decarbonisation needs with accessible financing.
 
Differences in socio-economic and environmental conditions across different regions and industrial sectors impact access to credit and the efficient utilization of climate finance. These obstacles hinder Brazil's capacity to expand industrial decarbonization, underscoring the necessity for customized strategies and capacity-building initiatives to effectively address these challenges.
 
Also, limited access to suitable and affordable financing options further restricts the adoption of decarbonisation technologies in Brazil. Another challenge is related to policy and regulatory frameworks in place, which can be improved to increase the mobilisation of climate finance and the implementation of decarbonisation projects by the Brazilian industrial sector. 

Project description

 
Established commitments such as Plano Clima and Nova Indústria Brasil (NIB) show the relevance of supporting action plans and commitments to allow the implementation of the Brazilian Nationally Determined Contributions (NDC).

The project aims to bridge the gap between climate finance supply and demand, helping to mobilise national and international funds and develop financial mechanisms to enhance access to credit for decarbonisation, mainly applied to hard-to-abate industrial sectors. Tools, mechanisms and policy recommendations will be tailored for development financial institutions (DFIs), being applicable also to private financial institutions whenever possible.

Also, this project embeds a GEDSI perspective, promoting a just transition through financial transformation.
 
On the demand side, technical support and policy recommendations will be developed to identify decarbonisation pathways, technology needs, and potentially viable projects. It includes sector-specific analyses to guide investments and improve Brazilian industrial sector's readiness for climate action. Recommendations will focus on investment alignment with climate targets to support long-term transformation of Brazil’s industrial sector.

On the supply side, it will assess Brazil’s current climate finance landscape, benchmarking global financial mechanisms and applicability to our local development finance system. Then, we will deep dive into international climate funds, access criteria, and how industrial decarbonisation projects could be financed. In parallel, policy instruments to mobilise and deploy climate finance will be identified and to inform best practices that could be repl
 

Expected results

  • Increase mobilisation and deployment of funds to support industrial decarbonisation projects, increasing economic resilience.

  • Strengthen capacities of Brazilian private sector and government stakeholders to access funds for industrial decarbonisation projects.

  • Improve policy and regulatory frameworks to enhance economic resilience and accelerate industrial decarbonisation action in Brazil
  • Increase effectiveness of decarbonisation actions from the government and industrial sector in Brazil.

  • Enhance access to climate finance through a network of national and subnational financial institutions, government and industry actors.