The shift toward clean energy could help attract new foreign investors to the region
10/23/2025
With 86.8% of its installed power already derived from renewable sources—and set to receive 63% of Brazil’s upcoming solar projects and 89% of new wind projects—the Northeast region has emerged as the natural hub for investments in “powershoring,” the relocation of industrial chains seeking decarbonization and energy security. The region also hosts 18 industrial hubs with energy-intensive operations that could be transitioned to clean energy sources.
These findings are part of a study by Ceplan, a consulting firm, which will be presented on Thursday (23) at a seminar on accelerating powershoring investments in the region. The event is organized by the Northeast Consortium, Banco do Nordeste, and the Climate and Society Institute (iCS).
According to the report, the 18 industrial zones are distributed as follows: two in Maranhão (Açailândia and São Luís); three in Ceará (Caucaia, Eusébio, and Maracanaú); four in Pernambuco (Cabo de Santo Agostinho, Igarassu, Ipojuca, and Paulista); four in Alagoas (Coruripe, Marechal Deodoro, Rio Largo, and São Luís do Quitunde); and five in Bahia (Camaçari, Candeias, Feira de Santana, Simões Filho, and Vitória da Conquista).
These cities are home to industries that require high energy consumption, such as metallurgy and steelmaking, chemicals, food production, non-metallic minerals, rubber and plastic manufacturing, textiles, and automotive production.
“These industries serve both the domestic and export markets and could transition to renewable energy as a strategy to attract foreign investors who must demonstrate to shareholders that their operations are decarbonized,” explains Paulo Ferraz Guimarães, an economist and one of the study’s authors.
He notes that shifting an industry’s energy source is not a simple process. “It often requires adjustments in procedures, machinery, and possibly in production methods,” he says. However, he adds that this transition also represents an opportunity to adopt more efficient and sustainable production processes and strengthen integration into global value chains.
The conversion of existing industrial plants is only one path to powershoring expansion in Brazil. With 45.1 gigawatts of installed capacity and another 104.6 GW projected for development, along with robust port infrastructure and proximity to major consumer markets such as Europe and the United States, the Northeast is a natural destination for decarbonization projects, says Jorge Arbache, economist at the University of Brasília and Valor columnist, who coined the term “powershoring.”
“The question,” he points out, “is why this agenda has not progressed as quickly as anticipated.”
“I believe there are two main explanations,” says Mr. Arbache. “First, trade in green products faces multiple obstacles from developed countries, including both tariff and non-tariff barriers, which have become major roadblocks to progress. This agenda creates significant friction in sectors that lack the same conditions for producing, for example, green steel, green ceramics, or green hydrogen. Direct competition in these areas would be clearly detrimental to some companies,” he notes, citing as an example the Carbon Border Adjustment Mechanism (CBAM)—a tax the European Union will begin imposing in 2026 on the carbon emissions embedded in imported products.
“The issue is that without trade, there is no investment,” Mr. Arbache summarizes. “Many countries still fail to grasp that powershoring is essential to combat green inflation—the rise in prices driven by the need to invest in more sustainable processes and inputs,” he laments.
The second challenge, he says, lies in the lack of coordination and political commitment among the federal and state governments to advance the agenda. “The Nova Indústria Brasil (NIB) program, for instance, only touches on the issue indirectly. Companies need to see a stronger signal of commitment, such as the creation of dedicated funds and de-risking mechanisms to support these initiatives. States also need better coordination; they can’t each go their own way,” he argues.
A similar lack of coordination can be seen in financing, adds Mr. Guimarães. While the country faces energy oversupply at certain times of day—forcing the National Electric System Operator (ONS) to instruct renewable plants to reduce or halt generation (curtailment)—most available financial resources remain focused on expanding supply rather than optimizing use.
Despite these hurdles, Mr. Arbache points out that fuels have been one of the few areas showing faster progress. The former vice president for the private sector at the Development Bank of Latin America (CAF) explains: “It’s one of the few areas where compliance speaks for itself. Decarbonization rules have already been established, and companies are required to meet them—it’s not optional. But other high-emission sectors, such as steel, aluminum, and petrochemicals, which together account for roughly 30% of global emissions, also need to decarbonize. There’s no alternative.”
He adds that the key challenge is finding financially viable solutions. “These solutions don’t exist in many parts of Europe, the United States, or Japan. In fact, several of these countries have scaled back their energy transition investments, which only widens the opportunity for Brazil and the Northeast to take the lead.”
*By Marcelo Osakabe — São Paulo
Source: Valor International
https://valorinternational.globo.com/