CBAM and Brazil: Steel and Fertiliser Exporters Face New EU Carbon Requirements
Brazil faces full CBAM exposure with no domestic carbon pricing offset. However, Brazil's unique advantages — a hydro-dominated electricity grid (0.09 tCO2/MWh) and charcoal-based steel production — mean that Brazilian manufacturers who document actual values have some of the largest CBAM savings of any country.
Brazil's Unique CBAM Advantage
Brazil's electricity grid is dominated by hydroelectric power (approximately 65% of generation), giving a grid emission factor of approximately 0.09 tCO2/MWh — one of the lowest in the world. Brazilian EAF steel producers and primary aluminium smelters using this grid achieve actual embedded carbon dramatically below EU defaults.
Brazil also has a unique charcoal-based BF-BOF steel production sector. Gerdau, CSN, and Usiminas use sustainably managed eucalyptus charcoal instead of coal coke in some blast furnaces, achieving actual embedded carbon of 0.20–0.80 tCO2/t — dramatically below the 2.18 default. Brazilian charcoal steel producers have the largest BF-BOF CBAM saving of any country.
Brazil CBAM Exposure by Sector
| Sector | Key companies | Actual (tCO2/t) | Saving vs default |
|---|---|---|---|
| Steel (charcoal BF) | Gerdau, CSN, Usiminas | 0.20–0.80 | EUR 90–123/t |
| Steel (coal BF) | CSN (some plants) | 1.60–2.00 | EUR 12–38/t |
| Aluminium (hydro) | CBA, Novelis Brazil | 2.00–4.00 | EUR 549–680/t |
| Cement | Votorantim, Lafarge Brazil | 0.55–0.70 | EUR 4–14/t |
Frequently Asked Questions
Does Brazil have a carbon price eligible for CBAM deduction?
No. Brazil does not have a national carbon tax eligible for CBAM deduction. The Brazilian Carbon Market (BCM) is under development but not yet operational.
What is Brazil's grid emission factor?
Brazil's grid emission factor is approximately 0.09 tCO2/MWh — one of the lowest in the world due to hydroelectric dominance.
What is the CBAM advantage for Brazilian charcoal steel?
Brazilian charcoal-based BF-BOF steel achieves actual embedded carbon of 0.20–0.80 tCO2/t vs the 2.18 default — saving EUR 90–123/t at current ETS prices.
Does Brazil's low grid factor apply to aluminium CBAM calculations?
Yes. Brazilian primary aluminium smelters using hydroelectric power achieve actual embedded carbon of 2.00–4.00 tCO2/t — saving EUR 549–680/t vs the 12.40 default.
Where can Brazilian manufacturers find ISO 14065 accredited CBAM verifiers?
See the Brazil verifier directory at /verification-directory/brazil/ for CGCRE ISO 14065 accredited CBAM verification firms.
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