Brazil benefits from Europe’s forced return to dirty coal due to self-inflicted energy crisis

With the onset of the Ukraine War and the useless distancing imposed on the Russian government, European countries have shot themselves in the foot and have now gone on alert about the risks of an energy crisis on the continent as winter approaches.

Criticized abroad for an allegedly increased deforestation and an aggressive stance against indigenous and quilombola communities, the government of President Jair Bolsonaro (Liberal Party – PL) has taken advantage of the increased use of coal in two-faced Europe and recent moves to buy gas to rebut criticisms of environmental policy and try to change the tone in the demands made on Brazil.

On Tuesday, August 23, during an event with industry business people in São Paulo, Environment Minister Joaquim Leite said he recently questioned a German ambassador about the criticism made to the Bolsonaro government, pointing out that the European country sought Qatar in the Middle East to buy gas after the Ukraine War.

“Germany, for example, is at a crossroads in the search for energy via coal. It has tripled the price of coal, and they can’t transport it because of the drought in the rivers,” Leite said.

“So, they went to get gas in Qatar, and one of my criticisms to the German ambassador was: wait a minute, you are going to get gas from a country that doesn’t protect minorities, and you come here and talk about deforestation, Indians, Indigenous people, quilombolas? But when you need your gas, you forget all that and go there?” questioned the minister.

Germany’s economy will lose more than €260 billion (US$259 billion) in added value by 2030 due to the Ukraine war and high energy prices, with negative effects on the labor market, according to a study by the IAB (Institute for Employment Research).

According to the study, Germany’s price-adjusted GDP (Gross Domestic Product) will be 1.7% lower, and about 240,000 people will become unemployed.

In reporting on the conversation with the ambassador, Leite said that it is necessary to bring some balance into the discussion.

“Brazil is, yes, concerned about what you are doing. The climate agreement, to reduce emissions is backward; you are increasing emissions [with coal use].”

According to the minister, the ambassador retorted that the measure was temporary, resulting from an emergency. Leite then said he would not escalate the issue as he should but stated that the two countries needed to be real partners.

On Monday, August 22, President Bolsonaro, in an interview on TV Globo’s “Jornal Nacional,” also used a comparison with Europe to answer a question about the environment, saying that the Amazon was “the size of Western Europe” and that forest fires also occur in other countries, such as France.

“When you talk about the Amazon, what you don’t talk about as well, is France has been on fire for more than 30 days, and the same thing is on fire in Spain and Portugal. In California, they catch fire every year. In Brazil, unfortunately, it is no different; it happens. A big part of it, some part of it is criminal, I know that [but] another part is the river dweller that sets fire to his property,” said the president.

With the change in geopolitics, Leite told the business people that it became clear that Brazil could be part of a new supply chain and represent clean energy security for Europe.

He also affirmed that there was a reduction in the tensions with the Europeans in the past when the country was criticized for the increase in deforestation – which froze the government’s plans to get the agreement between Mercosul and the European Union off the table.

The minister also said that the geopolitics had changed a lot, and Brazil had an opportunity to take advantage of the possibility of generating surplus energy. “When we went there, we presented Brazil’s potential for wind energy production, and our green hydrogen costs half the price.”

Last week, Reuters news agency pointed out that representatives of the European Union sought the Brazilian government, through Itamaraty and the Ministry of Economy, to advance negotiations on the agreement with Mercosur after a long period of stalled negotiations.

The Brazilian government sees a rapprochement with the Europeans after a series of obstacles to the agreement as a sign of the redesign of global value chains, especially after the pandemic and the war in Ukraine, which would have increased Brazil’s power in negotiations.

Members of the government had a preliminary conversation with emissaries from the bloc, and a new meeting is expected to take place by the end of September to draw up a schedule of meetings, said one of the sources, who is from the government and spoke on condition of anonymity because the discussions are private.

According to the agency, sources revealed that the discussion was buried, and the topic is back precisely because the Europeans need agricultural, mineral, and energy commodities and can no longer count on Russia.

After 20 years of negotiations, the free trade agreement was signed in 2019, at the beginning of President Jair Bolsonaro’s mandate.

For it to become effective, however, it must be approved by the countries’ parliaments, a point that has not advanced in the face of pressure from Europeans alleging a worsening of Brazil’s environmental indicators.

The opposing movement, led by France, put the destruction of the Amazon as a barrier.

With information from Reuters