Environmental Regulatory Tracking |
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Brazil |
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(Latin America/Caribbean)
Firm
Demarest Advogados
Contributors
Renato Canizares |
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1. Classification of steel slags, refractories and aluminum dross – are each of them regulated as industrial co-products, solid wastes or hazardous wastes? Are there regulations, limitations or restrictions in landfilling such materials? | Brazilian environmental agencies are conservative and tend to consider any production leftover as solid waste. Act No.12.305/2010 defines solid waste as “discarded material, substance, object or good resulting from human activities in society (…)”, which, in other words, can be understood as any material resulting from a production process that is not the final product. The fact that the material is reused as raw material in another production process does not exclude its legal nature as solid waste, since Act No. 12.305/2010 itself defines the reuse as one of the possible environmentally adequate destinations of the waste (such understanding was expressly stated by the Ministry of Environment in its website’s FAQ regarding solid waste). Moreover, pursuant to Normative Instruction No. 13/2012/IBAMA, and Resolution No. 313/2002/CONAMA, steel slags, refractories and aluminum dross are classified as solid waste and could be considered as hazardous wastes, as explained below. Steel slags are considered non-hazardous solid waste according to legal classifications: 10 02 01, 10 02 02 in Normative Instruction No. 13/2012/IBAMA; A013 in Resolution No. 313/2002/CONAMA. Also, they are not listed as hazardous waste in technical standard ABNT 10.004, version November/2004. For purposes of transboundary waste movement, steel slag is classified within B1200 and B1210 of the Basel Convention (Annex IX, non-hazardous wastes). Refractories are considered as non-hazardous waste as classified in No. A017, Resolution No. 313/2002/CONAMA, and B1030 and B1100, Basel Convention. Also, refractories are not indicated in the technical standard ABNT 10.004, version November/2004, as hazardous waste. However, some types of refractory linings could be considered hazardous waste according to chapter 16 11 of Normative Instruction No. 13/2012/IBAMA, Annex I. If the related metallurgical process involves hazardous substances, the refractory lining shall be considered hazardous waste. Aluminum dross is classified within A012 under Resolution No. 313/2002/CONAMA, as non-hazardous waste. Also, if applicable, the following are considered as non-hazardous waste under the Basel Convention: aluminum scrap (B1010), and aluminum skimmings (or skims) excluding salt slag (B1100). Aluminum dross is not indicated in the technical standard ABNT 10.004, version November/2004, as hazardous waste. However, there are specific types of aluminum dross that are explicitly classified as hazardous waste by Normative Instruction No. 13/2012/IBAMA, namely: aluminum dross from primary production (10 03 04), salt aluminum dross from secondary production (10 03 08) and black dross from secondary aluminum production (10 03 09). Moreover, we highlight that if non-hazardous waste is mixed with hazardous waste, the legislation considers it to be hazardous as well. Finally, the landfilling of waste, in general, shall be the last resort. According to Act No. 12,305/2010, solid waste management shall prioritize, in order, non-generation, reduction, reuse, recycling, and treatment. If such procedures cannot occur and all technologically available and waste treatment and recovery economically viable possibilities are exhausted, the waste can be subject to landfilling. In observation of the above, the landfilling of steel slags, refractories and aluminum dross is permitted. We did not identify any limitation or restriction to the landfilling of steel slags and refractories. With regards to aluminum, the technical standard ABNT 10.157, version December/1987, indicates that waste that contains aluminum shall not be mixed with certain types of waste which could lead to explosions, among others. |
2. Reuse, recycle and alternative application of internal byproducts - what regulations are now in place or are anticipated within the next 12-18 months that will encourage steel mills and aluminum producers to reuse or recycle their internal by-p... | In accordance with Article 9 of Brazilian Act No. 12,305/2010, regulated by Federal Decree No. 7,404/2010, solid wastes shall, in general, be managed in a manner which prioritizes, in order, non-generation, reduction, reuse, recycling, and treatment. We understand that the reuse, recycle or alternative application of steel and aluminum waste follows such order and is, therefore, encouraged by the aforementioned regulations. Article 11 of Resolution No. 499/2020/CONAMA/MMA indicates that the reuse of solid wastes as substitutes for raw material or fuel in cement production is beneficial for the environment when it leads to the reduction of greenhouse gas emissions, or the reduction or elimination of waste disposal, among others, and allows such use, providing for certain procedures and technical parameters. We understand that the by-products indicated above are included in this article (waste refractories, slags, sludges, baghouse dust, aluminum dross, among others), provided that technical requirements are followed in their application. Resolution No. 499/2020/CONAMA/MMA’s validity was questioned at the Brazilian Federal Supreme Court (Case No. ADPF 748), considering that it allows solid waste to be used in cement production in prejudice of other allegedly more environmentally friendly forms of waste management. On a decision regarding a preliminary injunction, in this case, the Supreme Court understood that the resolution is adequate and, therefore, its validity was maintained. However, the case is pending final judgment by the court. We did not identify other specific regulations (currently in place or anticipated within the next 12-18 months) aimed at encouraging steel mills and aluminum producers to reuse or recycle their internal byproducts (such as waste refractories, slags, sludges, baghouse dust, aluminum dross, among others) or find alternative application for byproducts (asphalt, cement, ready-mix, mineral wool, replacement for natural mining new aggregates, fertilizers, others). However, in case a steel mill or aluminum producer decides to reuse, recycle or find alternative applications to its internal byproduct, such activity shall be authorized in its environmental license. On the other hand, the reuse, recycling and alternative application of steel and aluminum internal byproducts is a relevant theme in the discussion by companies in the sector (as, for example, Brazil’s Steel Institute) and technical agencies (such as the Brazilian Association for Technical Standards ("ABNT")). In this sense, the ABNT has published technical standards in place for the use of slags in the production of cement and concrete. Also, the ABNT and Brazil’s Steel Institute created the Steel Mills’ Brazilian Committee, which studies such matters and promotes the publication of related technical guidelines. In addition, the ABNT has a Committee for the Study of Circular Economy. In spite of the legislation above, Brazil does not have a clear regulatory framework to regulate the reuse of solid waste, which depends on a case-by-case analysis. |
3. Use of chemicals, metals, oxides - Are there any existing or anticipated regulatory limitations or otherwise encouragement on handling or using certain chemicals, metals, oxides e.g. in the steel industry, landfill (for example): 1.fluorine-con... | We did not identify a comprehensive and specific regulation (existing or anticipated) regarding limitations or encouragement on handling or using specific chemicals, metals, or oxides in the steel industry. With regards to the landfilling of waste containing the chemicals listed above (fluorine-containing material, aluminum oxides from aluminum dross slag, chrome, beryllium, molybdian, calcium, oxides), we highlight that they shall be handled in accordance with the technical standard ABNT 10.157, version December/1987, which indicates that certain materials cannot be mixed, considering potential explosions arising from such mixture. Within the materials listed to which there must be attention in the conformity of landfilling, in the terms indicated above, the following are included: aluminum, beryllium, calcium, and certain oxides. We highlight ABNT has announced that it is updating such technical standards, as indicated in the 17th Volume of its News Report (November/December 2020). In addition, we have identified limitations considering the additions of materials that contain fluorine in the steel-making process, which are subject to ABNT’s Technical Standards No. 11526:1990, 1990-11-30, 11528:2016, 11529:2016, 2016-05-19, 11530:2016, 11532:2016, and 11533:2016. We recommend hiring a technical consultancy to have access to the technical regulations and for technical analysis on the subject. |
4. Cement and Concrete regulations – rules to limit or encourage adding more slag, fly ash, etc to cement; Green cement / concrete regulations that would support lower carbon-emissions based products (i.e. Carbicrete) | There are regulations establishing technical guidelines for the addition of more slag, fly ash, etc. to cement in a safe manner. Article 11 of Resolution No. 499/2020/CONAMA/MMA ("Resolution") indicates that the reuse of solid waste (which includes slag and fly ash) in cement production, benefits the environment when it leads to the reduction of greenhouse gas emissions, or the reduction or elimination of waste disposal, among others, permitting such use. Such use should be subject to authorization and must follow technical guidelines established in the Resolution, which could be complemented by requirements set forth by the applicable environmental agency (articles 3 and 6, CONAMA’s Resolution), aiming at maintaining the environment’s quality and avoiding harm and risks to human health (article 8, CONAMA’s Resolution). Also, ABNT has technical standards for the use of slags in cement and concrete production. Resolution No. 499/2020/CONAMA/MMA’s validity was questioned at the Brazilian Federal Supreme Court (Case No. ADPF 748), considering that it allows solid waste to be used in cement production in prejudice of other allegedly more environmentally friendly forms of waste management. On a decision regarding a preliminary injunction, in this case, the Supreme Court understood that the Resolution is adequate and, therefore, its validity was maintained, however, the case is pending final judgment by the court. Although we have not identified specific current regulations, lower carbon-emissions-based concrete and cement products are being discussed in the Brazilian industry. In 2019, Brazilian cement companies published, in collaboration with the International Energy Agency, the World Bank's International Finance Corporation, the World Business Council for Sustainable Development and a group of experts, the Cement Technology Roadmap, which indicates alternatives for the reduction of carbon emissions by the industry and recommends technical measures and solutions intending to reduce the sector’s emissions by 35% until 2050. The sector continues to participate in discussions in this matter, having published in November 2020 recommendations regarding a possible carbon pricing regulation. Also, Sao Paulo’s State Environmental Agency and the Inter-American Development Bank have published 2017 a study regarding lower carbon emissions-based cement products in Sao Paulo. At the time, the use of slags and fly ash in cement production was not considered a viable solution for the State’s carbon emissions, because there was no local supplier of these materials. Finally, Brazilian legislators are discussing, in the context of Brazil’s tax reform, the creation of a carbon tax, which is still uncertain. Brazil’s National Confederation of Industry advocates for the non-application of the tax to the productive chain, such as the cement industry, if such creation occurs. The Economy Ministry has also stated that it prefers to create a Brazilian carbon credit market instead of a carbon tax. |
5. Regulations to support new technologies – existing or anticipated regulations on EAF dust recovery, dust control, dumps recovery, treatment of water, natural gas | We did not identify specific regulations supporting new technologies in the matters indicated above, however, we highlight that any new technology on the matter must follow the existing regulations with limits and standards applicable to dust control, dumps recovery, treatment of water and natural gas. Specifically regarding EAF dust recovery, we did not identify relevant regulations. Also, we highlight that all matters hereby indicated may be subject to specific requirements established by legislation under the municipal and state level, and by the applicable environmental agencies, in the respective environmental licenses (case-by-case analysis). With regards to dust control, Brazil’s legislation establishes air emissions limits for industries, which are usually defined in companies’ environmental licenses, in accordance with technical standards. In general, CONAMA Resolution 491/2018 defines the current air quality standards applied in Brazil. In regards to particulate matter emissions, such parameters range from 20 to 40 mg/m³ annually (PM 10) and from 50 to 120 mg/m³ per day (PM 10); 10 to 20 mg/m³ annually (PM 2.5) and 25 to 60 mg/m³ per day (PM 2.5). These ranges depend on local standards to be applied by state authorities. Also, CONAMA’s Resolutions 382/2006 and 436/2011 define maximum limits for the emission of air pollutants. For steel industries, both Resolutions define that particular matter emissions must range from 40 to 100 mg/Nm³ depending on the production unit type (coke, sintering, electric steelmaking, among others). On dumps recovery, we highlight that such procedure involves the recovery of contaminated areas. As such, technical requirements and procedures contained in CONAMA’s Resolution No. 420/2009, which provides for standards and guiding values for soil quality and established guidelines for the environmental management of contaminated areas, must be followed. Such resolution states that the area should be recovered in a way that is compatible with the intended use of the land. Regarding the treatment of water, industries must obtain the applicable authorizations for effluent discharge and follow certain quality standards, indicated in the following regulations: (i) CONAMA’s Resolution No. 357/2005, which establishes certain conditions and parameters for effluent discharge; (ii) CONAMA’ Resolution No. 396/2008, regarding the prevention and control of groundwater pollution; (iii) CONAMA’s Resolution 430/2011, which complements Resolution No. 357/2005 and establishes certain conditions and parameters for effluent discharge; and (iv) Brazil’s Health Ministry Order No. 5/2017, which contains parameters for water potability. Finally, with regards to natural gas, activities such as transport, treatment, processing, storage and trade must follow, in general, the provisions of Federal Act No. 11.909/2009, and the applicable regulations of Brazil’s National Petroleum, Natural Gas and Biofuel Agency. Also, ABNT has published technical guidelines on the matter. |
6. CO2 emissions and CO2 trading programs - Existing and anticipated CO2 trading programs the Client could benefit from and/or CO2 emissions regulations that may favor increased use of steel mills and aluminium producers internal by-products/appli... | Brazil is a party to the Kyoto Protocol and the Paris Agreement, having an interministerial body responsible for approving standards for the regulated market in the country (Interministerial Committee on Climate Change). Despite the constitution of such a framework, there are very few certified projects in progress in the regulated sphere, which is awaiting definitions regarding the transition from the Kyoto Protocol to the Paris Agreement. In parallel, there are private initiatives of the so-called market instruments through private institutions. Currently, Brazil does not have specific legislation in force regulating carbon dioxide trading programs and promoting a tax or cap for the steel and aluminum industries’ carbon dioxide emissions. However, such a theme is under discussion. On January 13th, 2021, Brazilian Federal Act No. 14,119/2021 entered into force. This legislation provides for the implementation of a National Policy on Payments for Environmental Services and establishes the National Registry of Payments for Environmental Services and the Federal Program of Payments for Environmental Services. With these, individual or collective activities that favor the maintenance, restoration or improvement of ecosystem services (defined as relevant benefits to society generated by ecosystems, in terms of maintenance, recovery or improvement of environmental conditions) are encouraged and can be subject to payment in many forms, including compensation linked with certificates of reduced emissions. Such legislation is expected to be subject to specific regulations. With regards to carbon dioxide trading systems, such a theme will be discussed under Bill No. 528/2021, presented to Brazil’s Chamber of Deputies in February 2021. Brazil’s Ministry of Environment is also developing the project “Floresta + Carbono”, which aims at promoting the generation of a voluntary market of carbon credits. Currently, trading systems or programs in Brazil occur on a voluntary basis. We did not identify carbon dioxide trading programs specific to the steel mills and aluminum sectors. Finally, Brazilian legislators are discussing, in the context of Brazil’s tax reform, the creation of a carbon tax, which is still uncertain. Brazil’s National Confederation of Industry advocates for the non-application of the tax to the productive chain, such as the cement industry, if such creation occurs. The Economy Ministry has also stated that it prefers to create a Brazilian carbon credit market instead of a carbon tax. |
7. Steel slags/Applied Products imports, export, transport or trade – existing or anticipated regulations that would limit or encourage import/export, transport or trade of steel slags or applied products. | Trade and transport activities of steel slags or applied products (including asphalt, cement, ready-mix, mineral wool, a replacement for natural mining new aggregates, fertilizers) are subject to some environmental licenses or authorizations. Regarding asphalt trade, transport and related activities, Resolution No. 2/ANP/2005 establishes requirements, including the obtainment of authorization from Brazil’s National Petroleum Agency. Trade, storage and transport of fertilizers are allowed if in accordance with technical guidelines and procedures from Brazil’s Ministry of Agriculture, Livestock and Supply (“MAPA”) (Article 36 of Decree No. 4.954/2004). The import of fertilizers is subject to control and register by MAPA (Normative Instruction No. 8/2003 and 51/2011). Import of cement shall not contain substances or elements in quantities which can affect human health and the environment (Articles 9 and 10 of Resolution No. 499/2020/CONAMA). Steel slags may be considered “solid waste” and, as a consequence, import procedures and limitations indicated in Normative Instruction No. 12/2013/IBAMA and Resolution No. 452/2012/CONAMA apply. The import is permitted if the steel slag imported (i) is not considered hazardous waste (e.g. not mixed with hazardous material) and (ii) may be treated and recovered (i.e. its use is technically and economically viable). There are types of slags, not derived from iron or steel, whose import is forbidden due to the presence of metals or other chemicals in its composition. Also, if steel slag falls under categories of Common MERCOSUL Nomenclature 2517.20.00 (Macadam from blast furnace slag, other slag or similar industrial waste) and 2621.90.90 (other ashes or slags not listed in previous categories), its import shall be subject to the Federal environmental agency ("IBAMA")’s authorization and control. The following requirements must be fulfilled to obtain such authorization: (i) waste must be originated from a state party to the Basel Convention; (ii) import must aim at recycling the imported waste in facilities duly licensed for such; and (iii) parties involved in the import process must be regularly registered under IBAMA’s Technical Federal Registry; all in accordance with Article 4 of Normative Instruction No. 12/2013/IBAMA. IBAMA’s authorization is waived only if the importer proves that the product is not considered solid waste, as indicated in Article 5, paragraph 4 of Normative Instruction No. 12/2013/IBAMA. In addition, the export of waste must follow the requirements contained in the Basel Convention. We highlight that the import of (i) hazardous waste, (ii) waste without any technical or economic viability of use, and (iii) solid waste which causes damages to the environment, human, animal and plant health (such as used tires) is an infraction under Brazilian law subject to a fine which could range from BRL 500.00 to BRL 10,0000,000.00, as per Article 71-A of Decree No. 6,514/2008. Finally, companies must declare the transport of solid waste in the national territory through Waste Transport Manifests, as indicated in Order No. 280/2020 of Brazil’s Ministry of Environment. In case of hazardous waste being transported between states or at the sea, the company must also obtain authorization from IBAMA (Normative Instruction 05/2012/IBAMA). State agencies may also regulate local rules on the matter. |
Environmental Regulatory Tracking
Brazil
(Latin America/Caribbean) Firm Demarest AdvogadosContributors Renato Canizares
Updated 22 Apr 2021Brazilian environmental agencies are conservative and tend to consider any production leftover as solid waste.
Act No.12.305/2010 defines solid waste as “discarded material, substance, object or good resulting from human activities in society (…)”, which, in other words, can be understood as any material resulting from a production process that is not the final product. The fact that the material is reused as raw material in another production process does not exclude its legal nature as solid waste, since Act No. 12.305/2010 itself defines the reuse as one of the possible environmentally adequate destinations of the waste (such understanding was expressly stated by the Ministry of Environment in its website’s FAQ regarding solid waste).
Moreover, pursuant to Normative Instruction No. 13/2012/IBAMA, and Resolution No. 313/2002/CONAMA, steel slags, refractories and aluminum dross are classified as solid waste and could be considered as hazardous wastes, as explained below.
Steel slags are considered non-hazardous solid waste according to legal classifications: 10 02 01, 10 02 02 in Normative Instruction No. 13/2012/IBAMA; A013 in Resolution No. 313/2002/CONAMA. Also, they are not listed as hazardous waste in technical standard ABNT 10.004, version November/2004. For purposes of transboundary waste movement, steel slag is classified within B1200 and B1210 of the Basel Convention (Annex IX, non-hazardous wastes).
Refractories are considered as non-hazardous waste as classified in No. A017, Resolution No. 313/2002/CONAMA, and B1030 and B1100, Basel Convention. Also, refractories are not indicated in the technical standard ABNT 10.004, version November/2004, as hazardous waste. However, some types of refractory linings could be considered hazardous waste according to chapter 16 11 of Normative Instruction No. 13/2012/IBAMA, Annex I. If the related metallurgical process involves hazardous substances, the refractory lining shall be considered hazardous waste.
Aluminum dross is classified within A012 under Resolution No. 313/2002/CONAMA, as non-hazardous waste. Also, if applicable, the following are considered as non-hazardous waste under the Basel Convention: aluminum scrap (B1010), and aluminum skimmings (or skims) excluding salt slag (B1100). Aluminum dross is not indicated in the technical standard ABNT 10.004, version November/2004, as hazardous waste. However, there are specific types of aluminum dross that are explicitly classified as hazardous waste by Normative Instruction No. 13/2012/IBAMA, namely: aluminum dross from primary production (10 03 04), salt aluminum dross from secondary production (10 03 08) and black dross from secondary aluminum production (10 03 09).
Moreover, we highlight that if non-hazardous waste is mixed with hazardous waste, the legislation considers it to be hazardous as well.
Finally, the landfilling of waste, in general, shall be the last resort. According to Act No. 12,305/2010, solid waste management shall prioritize, in order, non-generation, reduction, reuse, recycling, and treatment. If such procedures cannot occur and all technologically available and waste treatment and recovery economically viable possibilities are exhausted, the waste can be subject to landfilling.
In observation of the above, the landfilling of steel slags, refractories and aluminum dross is permitted. We did not identify any limitation or restriction to the landfilling of steel slags and refractories. With regards to aluminum, the technical standard ABNT 10.157, version December/1987, indicates that waste that contains aluminum shall not be mixed with certain types of waste which could lead to explosions, among others.
In accordance with Article 9 of Brazilian Act No. 12,305/2010, regulated by Federal Decree No. 7,404/2010, solid wastes shall, in general, be managed in a manner which prioritizes, in order, non-generation, reduction, reuse, recycling, and treatment. We understand that the reuse, recycle or alternative application of steel and aluminum waste follows such order and is, therefore, encouraged by the aforementioned regulations.
Article 11 of Resolution No. 499/2020/CONAMA/MMA indicates that the reuse of solid wastes as substitutes for raw material or fuel in cement production is beneficial for the environment when it leads to the reduction of greenhouse gas emissions, or the reduction or elimination of waste disposal, among others, and allows such use, providing for certain procedures and technical parameters. We understand that the by-products indicated above are included in this article (waste refractories, slags, sludges, baghouse dust, aluminum dross, among others), provided that technical requirements are followed in their application.
Resolution No. 499/2020/CONAMA/MMA’s validity was questioned at the Brazilian Federal Supreme Court (Case No. ADPF 748), considering that it allows solid waste to be used in cement production in prejudice of other allegedly more environmentally friendly forms of waste management. On a decision regarding a preliminary injunction, in this case, the Supreme Court understood that the resolution is adequate and, therefore, its validity was maintained. However, the case is pending final judgment by the court.
We did not identify other specific regulations (currently in place or anticipated within the next 12-18 months) aimed at encouraging steel mills and aluminum producers to reuse or recycle their internal byproducts (such as waste refractories, slags, sludges, baghouse dust, aluminum dross, among others) or find alternative application for byproducts (asphalt, cement, ready-mix, mineral wool, replacement for natural mining new aggregates, fertilizers, others). However, in case a steel mill or aluminum producer decides to reuse, recycle or find alternative applications to its internal byproduct, such activity shall be authorized in its environmental license.
On the other hand, the reuse, recycling and alternative application of steel and aluminum internal byproducts is a relevant theme in the discussion by companies in the sector (as, for example, Brazil’s Steel Institute) and technical agencies (such as the Brazilian Association for Technical Standards ("ABNT")). In this sense, the ABNT has published technical standards in place for the use of slags in the production of cement and concrete. Also, the ABNT and Brazil’s Steel Institute created the Steel Mills’ Brazilian Committee, which studies such matters and promotes the publication of related technical guidelines. In addition, the ABNT has a Committee for the Study of Circular Economy.
In spite of the legislation above, Brazil does not have a clear regulatory framework to regulate the reuse of solid waste, which depends on a case-by-case analysis.
We did not identify a comprehensive and specific regulation (existing or anticipated) regarding limitations or encouragement on handling or using specific chemicals, metals, or oxides in the steel industry.
With regards to the landfilling of waste containing the chemicals listed above (fluorine-containing material, aluminum oxides from aluminum dross slag, chrome, beryllium, molybdian, calcium, oxides), we highlight that they shall be handled in accordance with the technical standard ABNT 10.157, version December/1987, which indicates that certain materials cannot be mixed, considering potential explosions arising from such mixture. Within the materials listed to which there must be attention in the conformity of landfilling, in the terms indicated above, the following are included: aluminum, beryllium, calcium, and certain oxides. We highlight ABNT has announced that it is updating such technical standards, as indicated in the 17th Volume of its News Report (November/December 2020).
In addition, we have identified limitations considering the additions of materials that contain fluorine in the steel-making process, which are subject to ABNT’s Technical Standards No. 11526:1990, 1990-11-30, 11528:2016, 11529:2016, 2016-05-19, 11530:2016, 11532:2016, and 11533:2016.
We recommend hiring a technical consultancy to have access to the technical regulations and for technical analysis on the subject.
There are regulations establishing technical guidelines for the addition of more slag, fly ash, etc. to cement in a safe manner. Article 11 of Resolution No. 499/2020/CONAMA/MMA ("Resolution") indicates that the reuse of solid waste (which includes slag and fly ash) in cement production, benefits the environment when it leads to the reduction of greenhouse gas emissions, or the reduction or elimination of waste disposal, among others, permitting such use. Such use should be subject to authorization and must follow technical guidelines established in the Resolution, which could be complemented by requirements set forth by the applicable environmental agency (articles 3 and 6, CONAMA’s Resolution), aiming at maintaining the environment’s quality and avoiding harm and risks to human health (article 8, CONAMA’s Resolution). Also, ABNT has technical standards for the use of slags in cement and concrete production.
Resolution No. 499/2020/CONAMA/MMA’s validity was questioned at the Brazilian Federal Supreme Court (Case No. ADPF 748), considering that it allows solid waste to be used in cement production in prejudice of other allegedly more environmentally friendly forms of waste management. On a decision regarding a preliminary injunction, in this case, the Supreme Court understood that the Resolution is adequate and, therefore, its validity was maintained, however, the case is pending final judgment by the court.
Although we have not identified specific current regulations, lower carbon-emissions-based concrete and cement products are being discussed in the Brazilian industry.
In 2019, Brazilian cement companies published, in collaboration with the International Energy Agency, the World Bank's International Finance Corporation, the World Business Council for Sustainable Development and a group of experts, the Cement Technology Roadmap, which indicates alternatives for the reduction of carbon emissions by the industry and recommends technical measures and solutions intending to reduce the sector’s emissions by 35% until 2050. The sector continues to participate in discussions in this matter, having published in November 2020 recommendations regarding a possible carbon pricing regulation.
Also, Sao Paulo’s State Environmental Agency and the Inter-American Development Bank have published 2017 a study regarding lower carbon emissions-based cement products in Sao Paulo. At the time, the use of slags and fly ash in cement production was not considered a viable solution for the State’s carbon emissions, because there was no local supplier of these materials.
Finally, Brazilian legislators are discussing, in the context of Brazil’s tax reform, the creation of a carbon tax, which is still uncertain. Brazil’s National Confederation of Industry advocates for the non-application of the tax to the productive chain, such as the cement industry, if such creation occurs. The Economy Ministry has also stated that it prefers to create a Brazilian carbon credit market instead of a carbon tax.
We did not identify specific regulations supporting new technologies in the matters indicated above, however, we highlight that any new technology on the matter must follow the existing regulations with limits and standards applicable to dust control, dumps recovery, treatment of water and natural gas. Specifically regarding EAF dust recovery, we did not identify relevant regulations. Also, we highlight that all matters hereby indicated may be subject to specific requirements established by legislation under the municipal and state level, and by the applicable environmental agencies, in the respective environmental licenses (case-by-case analysis).
With regards to dust control, Brazil’s legislation establishes air emissions limits for industries, which are usually defined in companies’ environmental licenses, in accordance with technical standards. In general, CONAMA Resolution 491/2018 defines the current air quality standards applied in Brazil. In regards to particulate matter emissions, such parameters range from 20 to 40 mg/m³ annually (PM 10) and from 50 to 120 mg/m³ per day (PM 10); 10 to 20 mg/m³ annually (PM 2.5) and 25 to 60 mg/m³ per day (PM 2.5). These ranges depend on local standards to be applied by state authorities. Also, CONAMA’s Resolutions 382/2006 and 436/2011 define maximum limits for the emission of air pollutants. For steel industries, both Resolutions define that particular matter emissions must range from 40 to 100 mg/Nm³ depending on the production unit type (coke, sintering, electric steelmaking, among others).
On dumps recovery, we highlight that such procedure involves the recovery of contaminated areas. As such, technical requirements and procedures contained in CONAMA’s Resolution No. 420/2009, which provides for standards and guiding values for soil quality and established guidelines for the environmental management of contaminated areas, must be followed. Such resolution states that the area should be recovered in a way that is compatible with the intended use of the land.
Regarding the treatment of water, industries must obtain the applicable authorizations for effluent discharge and follow certain quality standards, indicated in the following regulations: (i) CONAMA’s Resolution No. 357/2005, which establishes certain conditions and parameters for effluent discharge; (ii) CONAMA’ Resolution No. 396/2008, regarding the prevention and control of groundwater pollution; (iii) CONAMA’s Resolution 430/2011, which complements Resolution No. 357/2005 and establishes certain conditions and parameters for effluent discharge; and (iv) Brazil’s Health Ministry Order No. 5/2017, which contains parameters for water potability.
Finally, with regards to natural gas, activities such as transport, treatment, processing, storage and trade must follow, in general, the provisions of Federal Act No. 11.909/2009, and the applicable regulations of Brazil’s National Petroleum, Natural Gas and Biofuel Agency. Also, ABNT has published technical guidelines on the matter.
Brazil is a party to the Kyoto Protocol and the Paris Agreement, having an interministerial body responsible for approving standards for the regulated market in the country (Interministerial Committee on Climate Change). Despite the constitution of such a framework, there are very few certified projects in progress in the regulated sphere, which is awaiting definitions regarding the transition from the Kyoto Protocol to the Paris Agreement. In parallel, there are private initiatives of the so-called market instruments through private institutions.
Currently, Brazil does not have specific legislation in force regulating carbon dioxide trading programs and promoting a tax or cap for the steel and aluminum industries’ carbon dioxide emissions. However, such a theme is under discussion.
On January 13th, 2021, Brazilian Federal Act No. 14,119/2021 entered into force. This legislation provides for the implementation of a National Policy on Payments for Environmental Services and establishes the National Registry of Payments for Environmental Services and the Federal Program of Payments for Environmental Services. With these, individual or collective activities that favor the maintenance, restoration or improvement of ecosystem services (defined as relevant benefits to society generated by ecosystems, in terms of maintenance, recovery or improvement of environmental conditions) are encouraged and can be subject to payment in many forms, including compensation linked with certificates of reduced emissions. Such legislation is expected to be subject to specific regulations.
With regards to carbon dioxide trading systems, such a theme will be discussed under Bill No. 528/2021, presented to Brazil’s Chamber of Deputies in February 2021. Brazil’s Ministry of Environment is also developing the project “Floresta + Carbono”, which aims at promoting the generation of a voluntary market of carbon credits. Currently, trading systems or programs in Brazil occur on a voluntary basis. We did not identify carbon dioxide trading programs specific to the steel mills and aluminum sectors.
Finally, Brazilian legislators are discussing, in the context of Brazil’s tax reform, the creation of a carbon tax, which is still uncertain. Brazil’s National Confederation of Industry advocates for the non-application of the tax to the productive chain, such as the cement industry, if such creation occurs. The Economy Ministry has also stated that it prefers to create a Brazilian carbon credit market instead of a carbon tax.
Trade and transport activities of steel slags or applied products (including asphalt, cement, ready-mix, mineral wool, a replacement for natural mining new aggregates, fertilizers) are subject to some environmental licenses or authorizations.
Regarding asphalt trade, transport and related activities, Resolution No. 2/ANP/2005 establishes requirements, including the obtainment of authorization from Brazil’s National Petroleum Agency.
Trade, storage and transport of fertilizers are allowed if in accordance with technical guidelines and procedures from Brazil’s Ministry of Agriculture, Livestock and Supply (“MAPA”) (Article 36 of Decree No. 4.954/2004). The import of fertilizers is subject to control and register by MAPA (Normative Instruction No. 8/2003 and 51/2011).
Import of cement shall not contain substances or elements in quantities which can affect human health and the environment (Articles 9 and 10 of Resolution No. 499/2020/CONAMA).
Steel slags may be considered “solid waste” and, as a consequence, import procedures and limitations indicated in Normative Instruction No. 12/2013/IBAMA and Resolution No. 452/2012/CONAMA apply. The import is permitted if the steel slag imported (i) is not considered hazardous waste (e.g. not mixed with hazardous material) and (ii) may be treated and recovered (i.e. its use is technically and economically viable). There are types of slags, not derived from iron or steel, whose import is forbidden due to the presence of metals or other chemicals in its composition. Also, if steel slag falls under categories of Common MERCOSUL Nomenclature 2517.20.00 (Macadam from blast furnace slag, other slag or similar industrial waste) and 2621.90.90 (other ashes or slags not listed in previous categories), its import shall be subject to the Federal environmental agency ("IBAMA")’s authorization and control. The following requirements must be fulfilled to obtain such authorization: (i) waste must be originated from a state party to the Basel Convention; (ii) import must aim at recycling the imported waste in facilities duly licensed for such; and (iii) parties involved in the import process must be regularly registered under IBAMA’s Technical Federal Registry; all in accordance with Article 4 of Normative Instruction No. 12/2013/IBAMA. IBAMA’s authorization is waived only if the importer proves that the product is not considered solid waste, as indicated in Article 5, paragraph 4 of Normative Instruction No. 12/2013/IBAMA. In addition, the export of waste must follow the requirements contained in the Basel Convention.
We highlight that the import of (i) hazardous waste, (ii) waste without any technical or economic viability of use, and (iii) solid waste which causes damages to the environment, human, animal and plant health (such as used tires) is an infraction under Brazilian law subject to a fine which could range from BRL 500.00 to BRL 10,0000,000.00, as per Article 71-A of Decree No. 6,514/2008.
Finally, companies must declare the transport of solid waste in the national territory through Waste Transport Manifests, as indicated in Order No. 280/2020 of Brazil’s Ministry of Environment. In case of hazardous waste being transported between states or at the sea, the company must also obtain authorization from IBAMA (Normative Instruction 05/2012/IBAMA). State agencies may also regulate local rules on the matter.