The Energy Transition is already manifesting in our lives in various ways. It is already in full swing, even though the term itself and its conceptual understanding might not be clear or widespread among most people.
Those tungsten filament bulbs that are now considered old-fashioned, the energy efficiency labels from Inmetro on new products, houses equipped with photovoltaic energy, bicycles, motorcycles, and electric cars, the impacts of the war in Ukraine on European electricity, new wind farms, and a news cycle filled with stories related to energy as a relevant topic. Issues related to energy and the reduction of greenhouse gas emissions tend to be considered as part of the Energy Transition.
For those encountering the term for the first time, it basically involves moving away from the use of non-renewable energy sources, with fossil fuels like oil being a prominent example, as their use generates greenhouse gases like CO2. Many other gases with similar effects, known as greenhouse gases , GHGs, often measured in CO² equivalent in the atmosphere, fall into this category2 . This is because the planetary-scale greenhouse effect leads to various negative impacts on Earth, among which climate effects are most perceptible to humanity.
The modern global economy relies on energy sources as commodities. Energy, of various types like electricity and fuels, is used extensively in people's daily lives, industries, services, logistics, and more. It's challenging to identify a value chain, product, or service that currently doesn't use energy significantly. A large portion of the world's energy consumption comes from non-renewable fossil sources like oil, coal, and natural gas, accounting for around 80% according to the IEAThis implies that removing non-renewable energy sources from the world is and will be complex until goals like the main objective of the energy transition are achieved, such as "limiting the increase in temperature to 1.5°C above pre-industrial levels" according to the United Nations website. A related challenge is that economically viable mechanisms for capturing GHGs/CO2 from the atmosphere and safely storing them outside the air at the necessary scale and timeframe are not yet available. This would allow offsetting emissions already generated by the use of non-renewable energy sources. It seems obvious, but this is a nuanced point discussed timidly, as it's sensitive to define how such an operation would be financed.
According to the Brazilian Energy Research Company EPE, in 2022, 52.6% of Brazil's domestic energy supply came from non-renewable sources. Petroleum accounted for 35.7%, and natural gas for 10.5%. On the other hand, Brazil's energy matrix in 2022 had 47.4% from renewable sources, while the global average was only 14.1%. This indicates that Brazil holds a significant position in renewable energy compared to the world. Recognition is already present, as seen in Sustainable Development Goal 7 - Affordable and Clean Energy, which suggests that Brazil is on the path to achieving this objective.
The term "transition" naturally implies moving from an existing state to a new one. Numerous actions are currently in use, and many more are being developed within the scope of the Energy Transition, all aimed at establishing mechanisms to incentivize the adoption and development of a low-carbon and highly energy-efficient economy. These include the implementation of public policies, laws, actions by the private sector ESG, a race for technological alternatives, notable efforts by the automotive industry toward electrification, development of new renewable fuels, energy efficiency improvement technologies like new materials and machine learning , and a multitude of other endeavors. For instance, there is already an increasing availability of hybrid and fully electric vehicles, gradually becoming more prevalent in the Brazilian vehicle fleet. For innovative organizations, the energy transition is seen as a market opportunity, leading to a vast list of products and services under development and being tested for consumers.
The Carbon Market is a highly relevant topic and is sometimes synonymous with the Energy Transition, which is broader and encompasses it. It's a market with a well-defined scope that has achieved a certain level of development. However, there are still gaps in its regulation, auditing and control systems, and other mechanisms necessary for its widespread and effective implementation. In the Carbon Market, there's an endeavor to assign value to carbon, whether in emitted emissions, the maintenance of existing carbon stocks such as forests, or the carbon not emitted due to technological alternatives. Based on the valuation of CO2 and CO2 -equivalent gases, projects are proposed to achieve a positive balance in CO2 emissions compared to those already practiced or to maintain carbon stocks, such as those stored in vegetation. CO2 that is not emitted by an organization or carbon that is retained due to efforts can be treated as an asset with market value and can be traded.
All the aforementioned topics can be easily found in quick searches. They demonstrate how complex and multidisciplinary the Energy Transition is, with a broad and undefined scope. As a transitional state, it remains open to change!
Today, we face a scenario of few certainties and abundant opportunities. The Energy Transition is currently a nearly blank canvas, with set objectives but ongoing work. Renewable energy models that will replace fossil sources are in fierce competition. The petroleum-based model currently dominates in vehicles like cars, motorcycles, airplanes, ships, and trains. Intuitively, we might think that there should be another major energy source that will dominate these transportation modes. This could happen, but it's also not out of the question that there might be a reinvention of the energy matrix in transportation modes, involving multiple energy sources. When it comes to the aspect of transition, another relevant scenario emerges—the economic viability of each technological alternative at a given time. This suggests that over time, sources that are currently good and viable might be replaced by better alternatives. It's a market-driven selection process.
The break-even point of emitted CO2 is being discussed as a relevant aspect for making rational choices of technologies for low-carbon or emission-free products or services. The fact is that major value chains currently have significant GHG emissions. Even products closely aligned with no GHG emissions, like electric vehicles, have a GHG burden generated during their production. This means that many products with this appeal require a certain usage before the emission reduction objective related to GHGs can be positively achieved starting from the break-even point. And this required usage might still be substantial.
Some time ago, photographs started circulating of electric vehicles being charged at points powered by diesel generators. This scene illustrates the complexity of the Energy Transition's development and consolidation. New technologies require diffusion, acceptability, and economic viability. This demands considerable time and diverse efforts.
The term "energy justice" is gaining ground in debates. Is it fair to demand that developing nations adhere to costly requirements and criteria for adopting low-carbon technological alternatives when issues like hunger and health persist? However, the challenge posed by the Energy Transition is global and affects everyone.
The environment is central to the challenges presented by the Energy Transition. Emissions and carbon stocks need to be valued, monitored, audited, subject to diagnostic and strategic studies, studied from an ESG perspective, and understood in the context of the environment and socioeconomics aligned with the goals of the Energy Transition. They need to be transformed into assets and competitive differentiators. In the future, there might be an environmental licensing instrument dedicated to the Energy Transition and Low-Carbon Economy. . As practitioners of environmental studies and services, we have a routine of developing multidisciplinary, complex, often novel or unprecedented works closely tied to the development of technological or locational alternatives for new businesses in the market. Therefore, we are well-positioned to actively and naturally contribute to the demands of the Energy Transition.
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