Increasing energy efficiency in the Brazilian industry

A Mitigation Action Facility project has successfully supported more than 400 small and medium-sized enterprises in reducing their energy consumption. It is now to be expanded to other regions of Brazil.

The industrial sector accounts for a third of Brazil's final energy consumption and contributes 18.13 per cent of the country's energy-related greenhouse gas (GHG) emissions. Despite the considerable potential for energy savings in this sector, the market for energy efficiency in the industry has so far remained relatively unexploited.

The project “Transformative Investments for Industrial Energy Efficiency” (PotencializEE) is financed by the International Climate Initiative (IKI) and other donors as part of the Mitigation Action Facility, which is a multiple-donor climate finance mechanism. The project aims to enable transformative investments in industrial energy efficiency in Brazil and to accelerate decarbonisation as a result. PotencializEE initially addressed small and medium-sized enterprises (SMEs) in São Paulo, the state with the highest number of industrial manufacturers, with the aim of establishing an energy efficiency value chain, including consultants and technology providers as well as public and private financial institutions.

Successful energy audits in more than 400 small and medium-sized enterprises

So far, PotencializEE has supported more than 400 SMEs through energy audits. The auditors had previously been trained as part of the São Paulo project. The first 170 companies have already begun with the implementation of the proposed energy efficiency measures. Some of these companies also received support from a guarantee fund that facilitates access to loans. This fund was set up by the São Paulo State Development Bank in cooperation with the state government.

To date, the investments mobilised have led to energy savings of over 500 GWh and a cumulative reduction of 103,154 tonnes of CO₂ equivalents over the service life of the technology applied. These savings are beneficial to various industrial sectors, including the metal machining, automotive supply and plastic industries, food and beverage production and the textiles sector. 

The example of Particolare Gelateria: Reduction of greenhouse gas emissions in the ice cream manufacturing 

One specific example of the impact of PotencializEE is Particolare Gelateria, which is a small company that manufactures ice cream and frozen desserts. Following the technical support received through the project, the company decided to install a high-temperature heat pump for the pasteurisation process, perform adaptation measures in the cold rooms, implement thermal insulation measures and replace inefficient compressors and cooling towers. 

The participants in the implementation of these measures also include German technology providers. With an investment of around EUR 270,000, the company is expecting a reduction of its GHG emissions by 63 per cent compared to the “business-as-usual” scenario. This corresponds to a reduction of 1,284 tons of CO₂ equivalents. At the same time, the company can cut its energy costs by 47 per cent. 

“We would not have been able to put this project into practice without PotencializEE and the expertise of the specialists who supported my company”, said Vicente Manzione, Managing Director of Particolare Gelateria.

Expansion of the project to all regions of Brazil

Convinced by the positive outcome, the Brazilian government has decided to continue the project with its own funds. Additionally, the Mitigation Action Facility is allocating a further EUR 6 million through the Gesellschaft für Internationale Zusammenarbeit (GIZ) for the technical support required for the expansion. 

The current Brazilian government has recently defined seven key missions for its so-called neo-industrialisation strategy, including the “decarbonisation of industry, energy transition and bioeconomy”. This mission involves the promotion of investments in industrial energy efficiency. In this context, the PotencializEE project was integrated into a government programme aiming to reduce the intensity of emissions in the industrial sector by 30 per cent by 2033. 

One component for achieving this ambitious goal is the expansion of PotencializEE to all regions of Brazil from the second half of 2025, including at least five other states. The consulting services of the project will concentrate in particular on the electrification of industrial process heat as well as energy efficiency measures in thermal energy systems, including furnaces, boiler plants, freezing systems, cooling systems and refrigerated warehouses. Energy efficiency measures in these areas are particularly effective, but require specialised know-how and higher investments. This is exactly where the support comes in, thus contributing to the decarbonisation of industry.
 

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Priority field of action: Promoting the energy transition