Brazil LNG Expansion Undermines Decarbonization

Beyond jeopardizing the energy transition and crowding out renewable energy development in Brazil, the recent introduction of LNG in the Brazilian energy mix will create unnecessary technological lock-in. The U.S. should both discourage these developments and support the deployment of renewables in Brazil. 

In the past several years, the United States has greatly increased its exports of liquefied natural gas (LNG) to other countries. One major importer of U.S. LNG is Brazil, a country grappling with a president and administration that are antithetical to climate progress. As the U.S. engages with Brazil to rein in its emission from deforestation, it should not in parallel be facilitating higher emissions in Brazil’s energy sector.  

Often championed as a “bridge fuel” to move away from “dirtier” fossil fuels, LNG has been touted as “cleaner” because just the combustion phase has lower carbon dioxide emissions than coal or oil. It’s even been marketed as a potential tool to help address climate change. However, when LNG’s entire lifecycle is taken into account, LNG is neither clean nor particularly low in emissions. A recent NRDC report found that even using LNG to replace coal is not an effective strategy to reduce climate warming emissions. In particular, exporting LNG will not help meet the global goal of holding warming at or below 1.5 degrees Celsius.

As the largest energy consuming economy in Latin America, Brazil is now on track to increase its consumption of LNG for electricity generation. In March, a new gas law, which shifts control away from the state-controlled Petrobras, was approved in Brazil. Supported by industrial consumers, the law allows companies who want to build gas pipelines a simple authorization process rather than a more complex concession contract, and gives more power to the energy regulator, ANP. This law has already generated large shifts in the sector, as private companies can now get import permits for natural gas, and third parties are able to access LNG terminal infrastructure. In March alone, the Mines and Energy Ministry (MME) issued seven new import authorizations after issuing only 24 total in 2020.   


Following the new gas law, there are plans for at least 23 new LNG terminals in Brazil, two of which are in the construction phase, 10 in the licensing phase and 11 in an initial study phase, according to a study by the federal energy planning company, EPE. In particular, the Brazilian government plans to build LNG terminals in three ports in the North and Northeast regions, each with power plants. The Mines and Energy Ministry’s ten-year energy expansion plan, or PDE, explicitly calls for more large scale LNG power plants rather than investments in wind and solar, combined with hydro reservoirs and smaller flexible natural gas thermal units. The bulk of LNG flowing to Brazil would be imported.


Map showing where existing LNG terminals (dark turquoise) and anticipated LNG terminals (light turquoise) are located.

Credit: Empresa de pesquisa energética, EPE

Beyond jeopardizing the energy transition and crowding out renewable energy development in Brazil, the recent introduction of LNG in the Brazilian energy mix will create unnecessary technological lock-in and, in the near future, stranded assets. During their lifetime, the LNG developers could charge consumers unnecessarily expensive energy bills.

The U.S. should both discourage these developments and support the deployment of renewables in Brazil. As a trading partner, the U.S. should support the development and expansion of a market for low-carbon energy in order to encourage countries to structure themselves to offer such products. For example, the U.S. could engage with the 9 Governors from the Northeast Region of Brazil in their efforts to promote renewable energy and sustainable jobs.

The Biden Administration has an opportunity to work with the world’s major economies to reduce emissions. We should not be engaging in a game of simply shifting high-emissions LNG from one carbon accounting balance sheet to another. This is a disservice to the planet and future generations if the U.S. does not rein in the export of LNG to other nations.

Instead of increased LNG development and export from the US, NRDC makes the following recommendations to the Biden Administration regarding LNG:

  1.  LNG export is too high risk: NRDC opposes LNG export due to the substantial climate risks it poses, including its large GHG footprint, the long life span of LNG infrastructure that locks in fossil fuels instead of clean energy, and methane leaks that can eliminate any climate benefit even if LNG is used to replace coal.
  2. No subsidies for LNG-related infrastructure: The U.S. government should not subsidize LNG-related infrastructure with public subsidies or other incentives through, for example, the Export Import Bank of the United States, World Bank, or U.S. Development Finance Corporation. The United States should instead be providing other countries with clean, efficient, and cheaper sustainable alternatives to fossil fuels; offering U.S. innovations in technologies, services, and products; and leading by example by transitioning to a clean energy economy at home.
  3. Developers must account for and disclose full LNG life-cycle emissions: Proposals for LNG infrastructure must include disclosures on the full life-cycle GHG emissions of LNG, including all indirect and cumulative emissions, as these often account for the majority of emissions from a project and cannot be dismissed (these requirements include Scope 3 indirect GHG emissions coverage).
  4. Methane leakage must be controlled: Much of LNG’s sizable climate impact comes from methane leaks that occur throughout the production, processing, and transport of the gas. It is imperative that the United States (including state governments, as appropriate) develop and implement strategies to effectively curtail leakage.
  5. Financial institutions should evaluate projects on full life-cycle impacts: Any LNG project considered by a financial institution should be evaluated on the basis of the full direct, indirect, and cumulative GHG emissions impacts of the project. Financiers must accurately calculate the financial risks of high-carbon projects, as recommended by the Task Force on Climate-Related Financial Disclosures.
  6.  U.S. regulators must fully consider the range of impacts from LNG exports: U.S. regulatory bodies charged with reviewing applications for LNG export and its affiliated facilities, especially the Federal Energy Regulatory Commission and the Department of Energy, should ensure that a publicly transparent, thorough, robust, and comprehensive assessment of all relevant factors, including life-cycle GHG emissions, local and regional air pollutants, impacts to frontline communities, project alternatives, and all other upstream, downstream, and cumulative environmental impacts, is conducted and subject to public input prior to issuing a final decision.

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