Notice

Brazil Industrial Decarbonisation Hub: Joint concept note

Published 2 December 2023

Context

The international climate finance landscape can be complex, fragmented and a challenge to access for developing countries. The opportunity costs to developing countries of navigating and accessing such diverse sources of international support can be considerable. In the absence of transparency around different activities, there is a real risk of duplication or gaps in support.

This is the case for all sectors. Yet mobilising support to tackle emissions from industrial sectors presents a particular challenge.  Industry currently accounts for 25% of greenhouse gas emissions, with the IEA expecting industry to be the largest source of CO2 emissions by 2035 under current country commitments. Many low carbon technologies face considerable barriers to deployment, including high costs, immature markets or readiness to deploy. Compared to some other sectors, the offer of support to developing countries for industrial decarbonisation is less developed in both breadth and scale. Yet industrial development is vital for the social and economic prosperity of emerging markets and developing economies. It is therefore essential to support economies that wish to align industrial development with ambitious net-zero commitments.

As Brazil takes over the G20 Presidency next year and looks ahead to COP30, it is once again showing real political leadership on the global stage on the clean energy transition. The Brazil Industry Hub, in partnership with the UK, Leadership Group for Industry Transition (LeadIT) and United Nations Industrial Development Organization (UNIDO), seeks to play a crucial role in convening and coordinating international actors to support Brazil’s industrial clean transition. If successful, this pilot could provide a valuable model to scale up and replicate across other economies and sectors to accelerate decarbonisation and foster the next green industrial revolution.

Objective

The Industrial Decarbonisation Hub (IDHub) is a country-led initiative between Brazil’s Ministry of Development, Industry, Trade and Services (MDIC) and the UK’s Department of Energy Security and Net Zero (DESNZ). Through the coordination of international and domestic actors, it seeks to facilitate engagement between international actors – bilateral partners, multilateral funds, technical assistance programmes, private sector coalitions and initiatives, UN bodies – and the government of Brazil to mobilise support for its industrial transition. It aims to ensure different types of support on offer fit well together and help to identify new opportunities for future engagement with international partners.

Approach and deliverable

The IDHub will achieve this objective by capitalising on the UK and Brazil’s combined convening power and strategic international roles to deliver on: 

• Knowledge sharing: The Hub will facilitate the exchange of information to learn from others’ experience on industrial decarbonisation and provide advice on transition pathways.
• Identifying support: The Hub will assist Brazil to identify support from a diverse range of international actors, tailored to specific objectives. This will include efforts by the UK to align its own international climate finance support with the objectives of the Hub.
• Accessing international assistance: The Hub will support Brazil to access international climate finance, capacity building offers and initiatives, using the facilitative function of the Hub to identify new areas for complementarity and collaboration.

The IDHub will deliver on the approach outlined above on the basis of a work plan. The work plan will outline key objectives which the Hub will work to support in high-emitting industrial sectors and set targets for delivery by COP30. The work plan will be published to help all countries and initiatives see how they too could support the Hub’s work and deliver on Brazil’s aspirations. It will also help the Hub to monitor and update partners on delivery over time.

IDHub governance: roles and responsibilities

There will be three levels of governance in the delivery of the Hub’s work.

The IDHub will be run by a Secretariat, which is resourced by MDIC and DESNZ representatives, alongside LeadIT and UNIDO. The Secretariat will be responsible for:

• Facilitating engagement with key international stakeholders, including but not limited to industry representatives, technical assistance providers, international initiatives;
• Leading on the development, review and delivery of the workplan, updating it as needed to ensure progress against objectives;
• Providing technical advice on pathways and opportunities for industrial decarbonisation in Brazil;
• Preparing the three meetings per year of the Director-level Steering Group as well as the biannual high-level ‘Transition Dialogue Group’ which once a year will include ministers;

The IDHub will be supported in its work with the oversight of a Director-level Steering Group which will meet three times a year. The Steering Group will be responsible for: 

• Overseeing the delivery of the work plan, responding to any issues as raised by the Secretariat, and ensuring it remains on track to deliver its longer-term objectives;
• Engaging partners at senior levels where required to secure engagement and unlock any barriers to progress;
• Identifying external opportunities to promote the Hub’s work, including through multilateral meetings and other major events in the year;
• Setting the strategic framing for the Industry Hub Roundtable meetings and issues which require ministerial attention.

In order to provide political accountability and oversight to the Hub’s work, the Secretariat will organise a biannual high-level Country Co-Chaired Transition Dialogue, one of which will be attended and chaired by ministers from Brazil and the UK. The Dialogue will aim to:

• Convene a high-level group of international partners, including from other country governments, in support of Brazil’s industrial transition and the Hub’s objectives;
• Showcase progress made to date under the Hub and promote opportunities for further collaboration