Petrobras CCUS Strategy, $1.2 B RPBC Plant, Total Energies Partnership, and $16.3 B Low-Carbon CAPEX (2021 to 2026)

Petrobras Low-Carbon Projects, $1.2 B SAF Plant and 18 MW Wind Pilot

Petrobras is executing a dual-pronged sustainability strategy, prioritizing the decarbonization of its existing oil and gas operations while making cautious, exploratory investments in a portfolio of new low-carbon businesses. This approach leverages its core competencies and infrastructure to produce lower-carbon liquid fuels, a pragmatic path that mitigates immediate financial risk but deliberately avoids a rapid transformation away from fossil fuels. The recent shift from planning to execution on major projects marks a critical phase in testing the viability of this hedging strategy.

• Between 2021 and 2024, Petrobras’s activities were dominated by strategic planning and the formation of initial partnerships. The company’s business plans from this period outlined ambitions for low-carbon initiatives and established key alliances, such as a September 2023 Memorandum of Understanding (Mo U) with Total Energies and Casa dos Ventos to study renewable energy opportunities.
• Starting in 2025, the strategy translated into concrete capital commitments and project approvals. In June 2026, Petrobras greenlit a $1.2 billion investment to construct a renewable fuels plant at its RPBC refinery for Sustainable Aviation Fuel (SAF) and renewable diesel production.
• This was followed by an investment of $728 million to expand capacity at the REGAP refinery, also targeting SAF production by 2027. In parallel, the company entered early-stage exploration of new energy verticals, launching a tender for Brazil’s first dedicated Carbon Capture and Storage (CCS) pilot project and contracting Fugro for work on a small 18 MW offshore wind pilot.

$16.3 B in Low-Carbon CAPEX, Petrobras Allocates 15% of 2026-2030 Plan

While Petrobras has substantially increased its absolute spending on low-carbon projects, this capital remains a modest portion of its total investment plan, reinforcing the company’s continued focus on its core Exploration and Production (E&P) business. The allocation reflects a calculated decision to fund decarbonization primarily through the cash flow generated by an expanding fossil fuel segment, creating a fundamental tension between its commercial and climate objectives. The investment is heavily weighted toward retrofitting existing assets rather than building entirely new greenfield energy systems.

• The Business Plan 2026-2030 allocates $16.3 billion, or 15% of the total $109 billion CAPEX, to low-carbon initiatives. This represents a 42% increase in low-carbon allocation compared to the previous plan but is dwarfed by the $91 billion earmarked for traditional oil and gas projects.
• A cornerstone investment is the $1.2 billion for a new biorefining unit at the Presidente Bernardes Refinery (RPBC) in Cubatão, São Paulo, dedicated to producing SAF and renewable diesel from 100% renewable raw materials.
• Petrobras is also advancing a $728 million project at the Gabriel Passos Refinery (REGAP) to enable the production of advanced biofuels, with a startup target of 2027.
• In the hydrogen sector, Petrobras partnered with the Brazilian funding agency Finep to launch a R$150 million (approximately $30 million) fund to support the development of a domestic electrolyzer industry, a foundational step for future green hydrogen production.

Table: Petrobras Key Low-Carbon Investments (2025-2026)

Petrobras 5 Strategic Alliances, Total Energies to Arcelor Mittal (2023 to 2026)

Petrobras is actively using partnerships with specialized industrial and energy firms to explore and de-risk its entry into new low-carbon markets without shouldering the entire burden of technological development and market creation. This collaborative model allows the company to gain expertise in sectors like renewables, hydrogen, and CCS while focusing its direct capital on areas synergistic with its existing operations. These alliances function as low-cost options to build capabilities for a future energy system.

• In February 2024, Petrobras signed an Mo U with global steel producer Arcelor Mittal to jointly study business models for low-carbon fuels, renewable energy, hydrogen, and CCUS, creating a potential pathway for industrial decarbonization.
• An earlier Mo U from September 2023 brought Petrobras together with French major Total Energies and Brazilian developer Casa dos Ventos to assess joint investments in onshore and offshore wind, solar, and low-carbon hydrogen projects across Brazil.
• In April 2025, the company signed a strategic partnership with the French research institute IFPEN to collaborate on research in low-carbon energy, decarbonization, and the circular economy, signaling a focus on foundational R&D.
• More recently, in May 2026, Petrobras announced a move to strengthen its partnership with Lightsource BP to advance renewable energy projects in Brazil, building on existing collaborations. These partnerships are critical for navigating complex new markets, similar to how the nuclear supply chain requires deep collaboration.

Table: Petrobras Key Low-Carbon Partnerships

Brazil Focus, Petrobras Concentrates Sustainability Projects in Domestic Market

Petrobras’s entire sustainability and energy transition portfolio is geographically anchored within Brazil, a strategy designed to maximize its existing operational advantages and deep market knowledge. By co-locating new low-carbon projects with its vast network of refineries, pipelines, and offshore platforms, the company aims to reduce costs, streamline development, and control execution risk. This domestic focus is a logical approach for a national oil company tasked with supporting the country’s economic and energy objectives. While other NOCs like Saudi Aramco invest in global digital platforms, Petrobras is doubling down on its home turf.

• All major announced investments are tied to existing Brazilian assets. The $1.2 billion renewable fuels plant is at the RPBC refinery in São Paulo, and the $728 million SAF upgrade is at the REGAP refinery in Minas Gerais, both key industrial hubs.
• The company’s pioneering CCUS efforts are centered in the state of Rio de Janeiro. The tender for its first dedicated CO 2 storage pilot targets a site in the Santos Basin, leveraging decades of offshore operational experience in the region.
• Early-stage renewable energy exploration is also Brazil-centric. The pilot 18 MW offshore wind turbine is planned for the coast of Rio Grande do Norte, a region known for its strong wind resources, while a major reforestation initiative with BNDES is focused on the Amazon.
• This differs from other energy strategies, such as developing geothermal resources in Iceland or managing the high power demand of data centers in Europe, highlighting the regional nature of transition pathways.

Petrobras Technology Pilots, CCUS and Offshore Wind in Early Stages

Petrobras is pursuing a bifurcated technology strategy, deploying commercially proven biorefining processes at industrial scale while simultaneously conducting small-scale pilot projects in emerging technologies like offshore wind and dedicated geological carbon storage. This approach allows the company to generate near-term revenue and emissions reductions from mature technologies while building operational learning and de-risking future investments in sectors that are not yet commercial in Brazil. The progression from planning to pilot execution since 2025 represents a tangible, albeit cautious, step forward.

• Biorefining (Commercial Scale): Petrobras is making its most significant investments in SAF and renewable diesel, leveraging established hydroprocessing technology. The selection of Topsoe in February 2026 to provide technology for a large-scale renewable diesel project confirms the use of mature, bankable solutions for these multi-billion dollar refinery conversions.
• CCUS (Pilot Scale): While Petrobras is a world leader in using CCUS for Enhanced Oil Recovery (EOR), its dedicated geological storage efforts are in their infancy. The September 2025 tender for a pilot to inject 100, 000 metric tons of CO 2 annually is a critical first step to validate storage reservoirs and regulatory frameworks, but it is not yet at a commercial sequestration scale. This is a contrast to companies focused on other stranded energy solutions like Crusoe Energy.
• Offshore Wind (Pilot Scale): The planned 18 MW pilot project, for which Fugro was contracted in April 2026, is an exploratory R&D initiative. Its purpose is to gather data on Brazil’s offshore conditions and test turbine performance, not to generate significant power. It represents an option for future growth, similar to how some firms explore fuel cell applications.
• Hydrogen (R&D/Supply Chain): The partnership with Finep to fund electrolyzer development is a foundational move to stimulate a domestic supply chain for Norwegian Hydrogen. It is an investment in enabling future projects rather than a commitment to build a large-scale hydrogen production facility in the immediate term. Other technologies, like advanced liquid cooling or geothermal energy, follow similar paths from R&D to commercialization.

SWOT Analysis, Petrobras Strengths in E&P vs. Low-Carbon Transition Risks

Petrobras’s strategic position is defined by its formidable strengths in offshore oil production, which provide the financial and technical foundation for its low-carbon ventures. However, this same core business creates significant weaknesses and threats, as the company’s commitment to expanding hydrocarbon output runs directly counter to its sustainability narrative and exposes it to long-term transition risks.

Table: SWOT Analysis for Petrobras’s Sustainability Strategy

Petrobras 2027 Outlook: Will SAF Output Meet Targets at REGAP?

The most critical near-term signal for Petrobras’s energy transition strategy is its ability to deliver on its large-scale biorefining projects, particularly the planned 2027 startup of SAF production at the REGAP refinery. Successful execution would validate its model of leveraging existing assets for a gradual, profitable transition. Failure or significant delays would undermine confidence in its approach and intensify pressure for a more fundamental strategic shift.

• If Petrobras brings its new SAF and renewable diesel units at the RPBC and REGAP refineries online by their 2027-2028 targets, watch for an acceleration of similar conversion projects at other refineries in its portfolio. This would confirm biorefining as the central pillar of its transition strategy.
• If the company announces a final investment decision on a large-scale offshore wind or green hydrogen project with partners like Total Energies before 2028, watch for an upward revision of its low-carbon CAPEX allocation beyond the current 15%. This would signal a growing appetite for greenfield investments.
• These could be happening: The company could face increasing shareholder and political pressure to reconcile its rising oil production targets with its decarbonization commitments. Watch for any changes in its long-term production guidance or a potential spin-off of its renewable energy assets to unlock value and create a more focused low-carbon entity.

The questions your competitors are already asking

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• Brazil sustainable aviation fuel demand forecast
• Petrobras TotalEnergies offshore wind project status
• Brazil carbon capture projects
• National oil company energy transition investments comparison

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