Brazil is experiencing a paradoxical moment in its energy policy. According to the Boom and Bust 2026 report, published by GEM (Global Energy Monitor).)In 2025, the country achieved "No New Coal-Fired Power Plants" status, officially ending all new coal-fired power plant projects. However, decisions made by the federal government in 2025 and 2026 extended contracts for existing plants until 2040 and, in some cases, with the possibility of extension until 2050.
This contradiction became evident shortly after COP30, held in Brazil in November 2025. Just one day after the conference ended, Law No. 15.269 was approved, extending the mandatory purchases of energy from coal-fired power plants until 2040.
This measure was followed by multi-billion dollar contracts, such as that of the Jorge Lacerda Complex in Santa Catarina, which guaranteed operation until 2040 at an annual cost of R$ 1,8 billion. In addition, the 2026 Capacity Reserve Auction contracted 1,4 GW of imported coal capacity for the Itaqui, Pecém I, and Pecém II power plants.
In April 2026, the government also renewed the contract for Candiota III Power Plantin Rio Grande do Sul, until 2040, with an annual cost of R$ 859 million, despite unpaid environmental fines and ongoing proceedings at the Federal Court of Accounts.
Shortly after, an unprecedented decision by the Federal Court suspended the renewal of the plant's operating license, requiring that any new authorization only occur after an analysis of the climatic and environmental impacts.
Social and environmental costs
The impacts of maintaining coal-fired power plants go beyond the economy. A study by CREA (Centre for Research on Energy and Clean Air) and the ARAYARA International Institute revealed that the activities of the Candiota coal complex could cause up to 1.300 deaths and generate healthcare costs of R$ 11,7 billion by 2040. The effects even extend to neighboring countries such as Argentina, Paraguay, and Uruguay.
Another survey presented at COP30 showed that almost 10% of the territory of Santa Catarina is contaminated by coal mining, mainly by acid mine drainage — considered the largest environmental liability of this type in Latin America.
State transition plans
Meanwhile, Southern states are making uneven progress in developing just and sustainable energy transition plans:
- Paraná: lacks concrete initiatives, even after the closure of the Figueira thermal power plant in 2023.
- Rio Grande do Sul: hired a consulting firm in 2024, but as of May 2026 had not officially presented its strategy, which foresees the continuation of coal mining and burning.
- Santa Catarina: promotes public hearings to discuss transition guidelines with society and the productive sector.
Contradictions and criticisms
According to Gregor Clark, project manager at GEM, Brazil is sending contradictory signals to the world: “The elimination of proposals for new power plants is an important milestone, but the extension of contracts until 2040, shortly after hosting COP30, reinforces the dependence on coal and its negative impacts on climate, health and the economy.”
Juliano Bueno, executive director of the ARAYARA Institute, was even more incisive: “The government does not plan to decommission existing power plants. On the contrary, it has included in the national electricity system until 2040 the obligation to contract the most polluting and expensive energy, without offering workers a true just transition plan.”
Global context
The report also highlights global trends. By 2025, global coal capacity will increase by 3,5%, while generation will fall by 0,6%. In China, capacity grew by 6%, but generation fell by 1,2%; in India, there was a 3,8% expansion in capacity and a 2,9% drop in production. These countries are leading the expansion, with hundreds of gigawatts under development, even in the face of commitments to reduce consumption.
Outside of Asia, the scenario is one of contraction. The number of countries with new proposals fell from 38 in 2024 to 32 in 2025. South Korea announced a gradual phase-out by 2040, and Brazil and Honduras withdrew from the pipeline, leaving Latin America without new projects.
The future of coal in Brazil
Although no new power plants are planned, the subsidies embedded in energy tariffs could exceed R$ 100 billion by 2040, an amount that could be allocated to the energy transition. Furthermore, Bill No. 1.371/2025, which proposes extending contracts for coal-fired power plants until 2050, is currently being processed in the Chamber of Deputies.
Brazil, therefore, faces a dilemma: while it rejects new coal-fired power plant proposals, it maintains and extends the lifespan of older plants, compromising public resources and the health of the population. GEM report He concludes that, given the abundance of renewable energy sources in the country, insisting on coal is walking "towards the climate abyss."
The opinions and information expressed are the sole responsibility of the author and do not necessarily represent the official position of the author. Canal Solar.
