Brazil’s energy transition policy: implications for the upstream oil & gas sector

Achieving a just and timely energy transition requires countries to strategically advance a wide range of actions compatible with the pace of climate change. Public policies play a central role in this process, particularly in sectors most significantly affected, such as the oil and gas industry in developing economies. This study examines how public policies are advancing decarbonization in Brazil’s upstream oil and gas sector, focusing on three key dimensions: reducing operational emissions, promoting portfolio diversification, and managing production. The analysis draws on recent regulations and initiatives introduced since the launch of the Brazilian Energy Transition Policy, assessing their direct and indirect impacts on the sector. Findings reveal that, while meaningful progress has been achieved in recent years, significant regulatory and policy gaps remain. To address these, the study proposes a set of recommendations, including sector-specific greenhouse gas emissions targets, strengthening R&D policies, expanding economic incentives, resolving regulatory gaps for emerging low-carbon activities, and enhancing institutional enforcement capacity. Implementing these measures would not only accelerate decarbonization in Brazil’s upstream oil and gas sector but also help advance the country’s leadership in the energy transition and position it as a global reference in sustainable oil and gas production.