Paving the way to unlock finance for greening hard-to-abate sectors in Brazil

Led by: Climate Bonds Initiative
Consortium partners: Instituto Clima e Sociedade (ICS); E+ Transição Energética
Sector: Energy
 Implementation period: April 2025 - March 2027

 

The project seeks to tackle the challenges of decarbonising critical industries in Brazil—steel and cement —by catalysing financing and aligning them with decarbonisation strategies. These industries are essential to Brazil's economy but face significant barriers, including high capital costs, technological challenges, and limited access to finance. This project is grounded in Brazil’s National Industrial Decarbonisation Policy, which outlines a strategic framework for reducing industrial emissions. However, progress in hard-to-abate sectors has been limited, primarily due to a lack of adequate financial instruments and insufficient policy coordination.

With that, this project also aims to catalyse financing for the decarbonisation of hard-to-abate industries critical to Brazil such as steel and cement including their supply chain and small and medium enterprises (SMEs). This will be achieved by i) identifying necessary actions for corporations to align with the National Industrial Decarbonisation Policy; ii) enabling credit access for corporations and supporting enablers; and iii) creating incentives for the industry to adhere to decarbonisation pathways through policy instruments linked to the Brazil-UK Industrial Decarbonisation Hub’s priorities. 

“This project will contribute to the decarbonisation of Brazil’s steel and cement industries by unlocking climate finance for companies and SMEs across their value chains. By aligning corporate actions with Brazil’s National Industrial Decarbonisation Policy and enabling access to targeted credit and incentives, we aim to accelerate emissions reduction in these hard-to-abate sectors while promoting innovation, competitiveness, and a just transition."

-  Leonardo Gava, Brazil Country Manager, Climate Bonds Initiative 
 

Expected results

  • Development of new key policies and/or regulations by the MDIC to enhance access to climate finance for industrial decarbonisation. This includes the establishment of green credit lines, and decarbonisation guidelines tailored to key sectors. 

  • An expansion of green credit lines and other financial mechanisms by public and private financial institutions to support industrial decarbonisation in the country, both within and beyond the project's timeframe. 
  • Increase the number of corporates and SMEs in the steel and cement sectors that actively leverage climate finance from public and private financial institutions to reduce carbon emissions and facilitate a just transition in Brazil, both during and beyond the project's timeframe.