WHAT IS ENERGY TRANSITION?
The Energy Transition is a historical and inevitable process of transformation of the global energy system. It reflects the shift from a model based primarily on fossil fuels – such as coal, oil, and natural gas – to one centered on renewable energy sources, such as solar, wind, biomass, biofuels, and hydroelectricity.
This transition is driven by a number of factors, with the climate crisis being one of the most urgent, but also by issues of energy security, technological innovation, financial profitability and sustainable economic development.
At the heart of the Energy Transition is the quest to decarbonize the global economy, as the sector accounts for approximately 751 Tbp of global energy. In a scenario where the concentration of greenhouse gases in the atmosphere is reaching alarming levels, reducing carbon emissions has become imperative to avoid the worst consequences of climate change.
This process involves not only replacing polluting energy sources with cleaner alternatives, but also rethinking energy consumption, improving efficiency, and developing technologies that capture and store residual carbon.
The transition, however, is not a linear or straightforward process. It involves a complex set of technological, economic, political and social changes. Each country, region and economic sector faces unique challenges on this journey, and the transition must be tailored to their specific realities. Furthermore, the transition must be conducted in a fair manner, ensuring that the benefits of a cleaner and more sustainable energy system are accessible to all, and that communities and workers who depend on fossil fuel industries are not left behind.
Furthermore, the energy transition must be equitable, recognizing and addressing the historical inequalities and lack of access that persist in the current development model. It is essential to ensure that the benefits of a cleaner and more sustainable energy system reach all populations, especially those who have been historically marginalized, as a just transition is not limited to changing the energy mix, but also to correcting these deeply rooted disparities.
challenges
The main challenge of the energy transition lies in the need to balance the growing demand for energy with the urgency of reducing greenhouse gas emissions. In particular, replacing fossil fuels with renewable energy sources requires significant investments in infrastructure, technology and innovation. For CEBDS, the energy transition is a task that involves several economic sectors, and it is essential to implement public policies that encourage decarbonization and the adoption of sustainable practices.
One of the biggest obstacles to the energy transition is the global dependence on fossil fuels, which still represent the main source of energy worldwide. Furthermore, many decarbonization solutions involve increased electricity consumption, putting even more pressure on current generation systems. Although renewable sources such as solar and wind are on the rise, the intermittency of these sources and the need for significant expansion of energy storage systems are important barriers that have been attracting investment and research and development. In addition, existing infrastructure was largely developed to support energy generation from fossil fuels, meaning that a substantial transformation would be necessary to adapt the infrastructure to new energy sources.
Why does it matter for your company?
The Energy Transition is one of the most relevant topics for the business sector in the 21st century, and its importance goes beyond simple regulatory compliance or corporate responsibility. It represents a strategic opportunity and, at the same time, an operational imperative for companies that wish to remain competitive, relevant and resilient in a global economic environment increasingly guided by sustainability criteria.
Companies that adopt sustainable practices and integrate renewable energy into their operations and value chains not only improve their public image but also position themselves as market leaders. Growing consumer awareness of environmental and climate issues makes sustainability a critical factor in purchasing decisions, which in turn drives companies to innovate and adopt greener solutions.
Furthermore, as global climate policies intensify, environmental regulation is becoming increasingly stringent. Governments around the world are implementing ambitious carbon reduction targets and promoting the adoption of clean technologies. Companies that fail to adapt to this new regulatory landscape could face severe penalties, as well as restrictions on their operations and barriers to international trade. What’s more, the global movement towards ESG (Environmental, Social and Governance) criteria is redefining the investment landscape. Institutional investors and asset managers are increasingly demanding that companies demonstrate their commitment to sustainable practices. Companies that fail to align their operations with ESG criteria may struggle to attract capital and face devaluation of their shares. On the other hand, those that lead the way in adopting sustainability practices tend to attract significant investment.
In the long term, renewable energy sources tend to be cheaper and less susceptible to the price volatility that affects fossil fuels. This offers a significant competitive advantage, as companies can reduce their operating costs and protect themselves against unpredictable fluctuations in energy markets. In addition, the adoption of energy efficiency technologies contributes to reducing production costs and improving operational efficiency.
Companies that position themselves at the forefront of this innovation have the opportunity to develop new products and services, capture new markets, and establish themselves as pioneers in emerging sectors. Promoting these positions can create revenue streams and strengthen their competitive advantage.
In short, the Energy Transition is not only a response to the climate crisis, but also an opportunity for companies to reinvent themselves and thrive in a rapidly changing world. Companies that take a proactive approach to the transition not only play their part in mitigating climate change, but also ensure their longevity and success in an increasingly competitive global marketplace.
What does CEBDS think about this?
CEBDS sees the Energy Transition as a strategic priority and a central element for building a more sustainable and inclusive future. For the organization, this transition must be conducted in an integrated manner, considering not only technological aspects, but also social and environmental impacts. Brazil, with its enormous potential for the expansion of renewable energies, such as solar, wind and biomass, has the opportunity to lead this transformation in a sustainable way. However, CEBDS emphasizes that it is crucial that this expansion occurs responsibly, considering both environmental and social impacts.
In this sense, CEBDS advocates for the modernization of the Brazilian electricity system, which includes increasing investments in the National Integrated System (SIN) to make it smarter and more resilient. The organization believes that a modern and efficient infrastructure is essential to accommodate the growing share of renewable sources in the energy matrix and to ensure the stability and efficiency of energy supply throughout the country. In addition, the Council supports the development of new green technologies, such as green hydrogen, and considers it essential to expand discussions on carbon capture and storage (CCS). Although CCS still faces technical and economic challenges, it is seen as an important tool for reducing emissions in sectors where electrification or replacement by renewable energy is difficult.
Through its innovative Coalitions model, CEBDS has developed a shared vision with companies in the electricity and transportation sectors for the long-term decarbonization of these sectors, within the framework of Brazil's updated NDC.
The Brazilian electricity sector stands out globally for its predominantly renewable energy matrix, with a strong presence of hydroelectric, wind, and solar power. Taking advantage of this, the Electricity Sector Coalition was created as a forum for dialogue between companies and institutions to strengthen Brazil's role in the climate agenda. The initiative is led by six industry associations (ABRADEE, ABRATE, ABEEÓLICA, ABRACE, ABIAPE, and ABRAGE), with technical coordination from the consulting firm PSR, and aims to propose concrete actions to accelerate the transition to a low-carbon economy.
The Electric Energy Coalition's actions were organized around four fronts: generation, transmission, distribution, and consumption. Workshops with 73 entities promoted discussions on innovation, network modernization, technology integration, and efficient energy use. The focus ranged from ensuring the competitiveness of renewables to encouraging the electrification of production processes and reducing emissions in key sectors. The result will be a report with consensus proposals, which will be delivered to Ambassador André Corrêa do Lago and presented at COP30, reinforcing the leading role of the Brazilian electricity sector in combating climate change.
The transportation sector in Brazil accounts for approximately 11% of the country's total emissions, with road transport being a major contributor. In this context, the Transportation Coalition emerges as a collaborative initiative focused on promoting cleaner and more efficient mobility.
Conceived by Motiva and coordinated in partnership with CNT and the Sustainable Mobility Observatory of Insper, the Coalition brings together more than 50 organizations from different modes of transport — urban, road, rail, waterway, air and infrastructure — to propose practical and integrated decarbonization solutions.
Between November 2024 and February 2025, the group held technical workshops with representatives from companies and institutions, resulting in important deliverables such as emissions projections until 2050, the identification of 90 strategic actions to reduce the carbon footprint, and an analysis of their potential effects. The final report, consolidating these proposals, was delivered in March 2025 to Ambassador André Corrêa do Lago, reinforcing the sector's commitment to a sustainable transition and positioning Brazil as a benchmark in low-carbon mobility.
Through these Coalitions, CEBDS works to promote a just and equitable Energy Transition. The organization emphasizes the importance of ensuring that the benefits of this transition are shared by all segments of society, especially the most vulnerable, and that public policies are designed to promote social inclusion and reduce inequalities. In this sense, the Energy Transition should be an opportunity for Brazil to lead by example, integrating advanced technological solutions with a deep commitment to social justice and environmental sustainability.