1. Themes
  2. Concessional Finance
  3. Subsidy Reform

Subsidy Reform

Brazil needs to reform subsidies to phase out fossil fuel support and expand green, incentives redirecting public resources toward clean energy, forest restoration, and climate-resilient development.

2030 Goals

01

Eliminate or significantly reduce fossil fuel subsidies, particularly for diesel and natural gas, in alignment with G20 and Organization for Economic Cooperation and Development (OECD) commitments.

02

Expand green and socially inclusive subsidies, prioritizing clean energy, climate-resilient infrastructure, and reforestation.

03

Ensure at least 50% of public subsidies with climate relevance are redirected toward adaptation, mitigation, or just transition outcomes.

04

Improve subsidy governance through transparent reporting, cross-sectoral coordination, and data systems tracking climate alignment of public expenditure.

Status

Moderate Progress

Brazil is gradually expanding climate-aligned subsidies and concessional finance, but progress remains uneven. The country need to scale green support while addressing the persistence of environmentally harmful incentives.

Fossil fuel subsidies continue at the federal level with no phaseout roadmap, and reporting remains fragmented, limiting transparency and international alignment.

The Climate Fund was relaunched with R$10.4 billion in concessional finance through the Brazilian Development Bank, supporting projects in clean energy, mobility, and forest restoration.

Programs like Floresta Viva incentivize native vegetation recovery through grants and subsidies, reinforcing biodiversity and carbon sequestration goals.

Leading Actors

Cooperation is required between these actors and audiences to drive progress foward in Subsidy Reform.

Public Financial Institutions

Brazilian Development Bank (BNDES)

Multilateral Development Banks

World Bank

Multilateral Development Banks

BRICS NDB

International Organizations

International Energy Agency (IEA)

International Organizations

Organization for Economic Cooperation and Development (OECD)

International Organizations

G20

Ministries

Ministry of Mines and Energy (MME)

Ministries

Ministério da Indústria, Comércio e Serviços (MDIC/)

Ministries

Ministry of Agriculture and Livestock (MAPA)

Ministries

Ministry of Finance (MF)

Other Governmental Organizations

National Electric Energy Agency (ANEEL)

Other Governmental Organizations

Federal Revenue Service

Other Governmental Organizations

Brazilian Agency for Petroleum, Natural Gas and Biofuels (ANP)

Other Governmental Organizations

Federal Revenue Secretariat (Receita Federal)

Other Governmental Organizations

Federal Attorney General's Office (AGU)

Supportive Stakeholders

World Resources Institute Brasil (WRI Brasil)

Supportive Stakeholders

Instituto do Clima e Sociedade (iCS)

Supportive Stakeholders

Observatório do Clima

Supportive Stakeholders

Instituto Escolhas

Key Milestones

Showcasing the key reform milestones for Subsidy Reform that have been addressed at global events.

View Roadmap

Brazil

Brazilian Sustainable Taxonomy announcement

View Event
  • Levies on High-emitting Activities

    Develop comprehensive emissions monitoring and verification systems beyond the Emissions Trading System to support accurate, fair, and enforceable emissions-based levies

  • Subsidy Reform

    Improve data systems to evaluate subsidy effectiveness and climate impacts with reliable evidence

New York, US

UN Forum on Forests (UNFF21)

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  • Subsidy Reform

    Establish a national subsidy tracking system with consistent, transparent monitoring across sectors

  • International Carbon Markets

    Embed robust monitoring, reporting, and verification (MRV) and social safeguards across all transfers.

India (city TBC)

18th BRICS Summit - BRICS Leaders’ Summit

View Event
  • Levies on High-emitting Activities

    Publish annual MRV progress in national climate and fiscal reports to strengthen transparency and investor confidence

  • Subsidy Reform

    Phase out fossil fuel subsidies for diesel and natural gas, aligning fiscal policy with long-term climate objectives

Brazil

Brazilian Presidential Elections

View Event
  • Levies on High-emitting Activities

    Engage Congress, subnational governments, and sectoral associations in consultations to refine proportional taxation models

  • Subsidy Reform

    Strengthen inter-ministerial coordination to implement integrated subsidy reform strategies

Learn More

Publications and educational material to deepen understanding of Subsidy Reform.

Fundo Clima

Subsidy Reform

Information on Fundo Clima, a federal fund managed by BNDES to finance projects that mitigate and adapt to climate change.

Go to Resource (opens a new window)

IISD: Beyond Fossil Fuels – Fiscal Transition in BRICS

Subsidy Reform

Report analyzing fossil fuel subsidy reform and fiscal transition pathways in BRICS countries, with a case study on Brazil.

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