Top
Top

Lex Mundi Global Climate Change Guide

Brazil

(Latin America/Caribbean) Firm Demarest Advogados

Contributors Luiz Fernando Sant'Anna

Updated 17 May 2021
Has your country signed/ratified the Paris Agreement? If so, what is its INDC / NDC?

Brazil ratified the Paris Agreement on September 12, 2016. In order to commit to the agreement terms, Brazil submitted its first iNDC to the United Nations Framework Convention on Climate Change ("UNFCCC") in September 2015. Brazil’s NDC was updated in December 2020. 

The 2015 NDC included the following targets:

  • Forestry - Strengthen compliance regarding the Forest Code, at the federal, state and municipal levels; policies and measures focusing on achieving zero illegal deforestation in the Brazilian Amazon by 2030 and offsetting greenhouse gas emissions from legal suppression of vegetation by 2030; restoration and reforestation of 12 million hectares of forests by 2030, expanding the use of  georeferencing and traceability systems applicable to the management of native forests;
  • Energy - Increase the share of sustainable bioenergy in the Brazilian energy matrix to approximately 18% by 2030, expanding the consumption of biofuels, increasing the supply of ethanol, including by increasing the share of advanced biofuels (second generation), and increasing the share of biodiesel in the diesel mixture; achievement of an estimated 45% share of renewable energy in the composition of the energy matrix by 2030, and expanding the domestic use of non-fossil energy sources, increasing the share of renewable energies (in addition to hydropower) in the supply of electricity to at least 23% by 2030, including by increasing the share of wind, biomass and solar. 
  • Transport - Promote efficiency measures, improvements in transport infrastructure and public transport in urban areas.
  • Industry - Promote new standards of clean technologies and expand energy efficiency measures and low carbon infrastructure.
  • Agriculture - Strengthen the Low Carbon Emission Agriculture Plan ("ABC Plan") as the main strategy for sustainable development in agriculture, including through the additional restoration of 15 million hectares of degraded pastures by 2030 and an increase of 5 million hectares of crop-livestock-forest systems ("iLPF") by 2030.

In the 2020 update of the NDC, Brazil did not establish new targets for each sector but set up the general target of reducing emissions by 37% until 2025 and by 43% for 2030, taking the numbers from 2005 for comparison. The country also established the goal of achieving carbon neutrality by 2050, requiring funding of at least USD 10 billion per year to maintain the strategies necessary for such a goal. 

What are the key national policy instruments regarding climate change and what are the national long term greenhouse gas emissions (GHG) reduction targets?

The key national policy instruments are:

  • Política Nacional sobre Mudança do Clima (National Policy on Climate Change) – PNMC governed by Law No. 12.187/2009 and Decree No. 9.578/2018 (“Regulates the National Policy on Climate Change”)

The National Policy on Climate Change, instituted by Law No. 12,187/2009 and regulated by Decree No. 9,578/2018, is the document that officialized Brazil's voluntary commitment to the United Nations Framework Convention on Climate Change. Among its goals, it aims to reduce greenhouse gas emissions between 36.1% and 38.9% of projected emissions by 2020. This policy will be further explored in Question 4 of this questionnaire.

  • Plano Nacional sobre Mudança do Clima (National Plan on Climate Change) 

The National Plan on Climate Change, presented on December 1, 2008, aims to promote the development and improvement of mitigation actions in Brazil, in collaboration with the global effort to reduce greenhouse gas emissions. It is also aimed at creating internal conditions to deal with the impacts of global climate change and has four axes: mitigation opportunities; impacts, vulnerabilities and adaptation; Research and Development; and education, training and communication.

Its main objectives are to: Identify, plan and coordinate actions to mitigate greenhouse gas emissions generated in Brazil; foster increases in efficiency of the performance of sectors of the economy and the constant pursuit for the achievement of best practices; keep the share of renewable energy in the power matrix high, foster the sustainable increase in the share of biofuels in the national transport matrix; seek a sustained reduction in deforestation rates and to eliminate the net loss of the forest cover area in Brazil, by 2015; strengthen intersectoral actions aimed at reducing population vulnerabilities; identify the environmental impacts resulting from climate change and encourage the development of scientific research. The plan operates at a national level, in cooperation with states, municipalities, and the general public itself, through public consultations.

  • Plano Nacional de Adaptação (National Plan for Adaptation to Climate Change) - PNA - (Ordinance 150/2016)

The National Plan for Adaptation to Climate Change ("PNA"), instituted on May 10, 2016, through Ordinance No. 150, is an instrument prepared by the federal government in collaboration with civil society, the private sector and state governments. It seeks to reduce the impacts caused by climate change in the national territory and to be able to perform risk management associated with this phenomenon.

There were 11 sections considered during the planning of the PNA, represented by the respective competent governmental bodies, which were: Agriculture, Water Resources, Food and Nutritional Security, Biodiversity (Biodiversity and Ecosystems), Cities, Disaster Risk Management, Industry and Mining, Infrastructure, Vulnerable Populations and Peoples, Health (Health) and Coastal Zones.

As previously mentioned, regarding the long-term greenhouse gas emissions ("GHG") reduction targets, the 2015 NDC included the following goals:

  • Forestry - Strengthen compliance regarding the Forest Code, at the federal, state and municipal levels; policies and measures focusing on achieving zero illegal deforestation in the Brazilian Amazon by 2030 and offsetting greenhouse gas emissions from legal suppression of vegetation by 2030; restoration and reforestation of 12 million hectares of forests by 2030, expanding the use of  georeferencing and traceability systems applicable to the management of native forests;
  • Energy - Increase the share of sustainable bioenergy in the Brazilian energy matrix to approximately 18% by 2030, expanding the consumption of biofuels, increasing the supply of ethanol, including by increasing the share of advanced biofuels (second generation), and increasing the share of biodiesel in the diesel mixture; achievement of an estimated 45% share of renewable energy in the composition of the energy matrix by 2030, and expanding the domestic use of non-fossil energy sources, increasing the share of renewable energies (in addition to hydropower) in the supply of electricity to at least 23% by 2030, including by increasing the share of wind, biomass and solar. 
  • Transport - Promote efficiency measures, improvements in transport infrastructure and public transport in urban areas.
  • Industry - Promote new standards of clean technologies and expand energy efficiency measures and low carbon infrastructure.
  • Agriculture - Strengthen the Low Carbon Emission Agriculture Plan ("ABC Plan") as the main strategy for sustainable development in agriculture, including through the additional restoration of 15 million hectares of degraded pastures by 2030 and an increase of 5 million hectares of crop-livestock-forest systems (iLPF) by 2030.

The National Plan on Climate Change (2008) also establishes some targets to be achieved, as follows:

  • Reduce by 80% the annual deforestation rate in the Amazon by 2020;
  • Exchange of 1 million old refrigerators per year, within 10 years;
  • Increase by 20% in the recycling of solid urban waste by 2015;
  • Increase in the supply of cogeneration electricity to 11.4% of the country's total electricity supply by 2030;
  • Increase domestic consumption of ethanol by 11% per year over the following ten years;
  • Doubling the area of planted forests to 11 million hectares by 2020 (with 2 million ha making use of native species);
  • Reduction of non-technical losses in the distribution of electricity at the rate of 1,000 GWh per year, for the following 10 years.

Finally, the National Policy on Climate Change also set its target to reduce greenhouse gas emissions between 36.1% and 38.9% of projected emissions by 2020 through the following goals:

  • the compatibility of economic and social development with the protection of the climate system;
  • the reduction of anthropogenic emissions of greenhouse gases in relation to their different sources;
  • the strengthening of anthropogenic removals by sinks of greenhouse gases in the national territory;
  • the implementation of measures to promote adaptation to climate change by the 3 spheres of the federation, with the participation and collaboration of the economic and social agents interested or beneficiaries, in particular, those especially vulnerable to the adverse effects of climate change;
  • the preservation, conservation and recovery of environmental resources, with particular attention to the great natural biomes considered as National Heritages;
  • the consolidation and expansion of legally protected areas and the incentive towards reforestation and the restoration of vegetation cover in degraded areas;
  • the development of the Brazilian Emissions Reduction Market – ("MBRE").

The policy also states that such targets must be aligned with sustainable development in order to seek economic growth, the eradication of poverty and the reduction of social inequalities.

Have national policies or legislation been adopted limiting or prohibiting the use of certain fossil fuels (e.g. coal, natural gas, nuclear)?

Although Brazilian legislation regulates the use of certain fossil fuels, most of them are focused on the proceedings and requirements necessary for the use, transportation, sale, among others, of such fuels, as opposed to expressly limiting or prohibiting their use. Brazilian policy to limit fossil fuels is more focused in stimulating other uses (such as ethanol, through the Renovabio program, explained in item 8 below) than forbidding its use. The regulation that comes closer to prohibitions or limitations goes as follows:

  • Nuclear

The Federal Constitution of 1988 mentions in its article 21 that the Federal Branch is entitled “to explore nuclear services and installations of any nature and to exercise a state monopoly on research, mining, enrichment and reprocessing, industrialization and trade in ores nuclear and its derivatives, in compliance with the following principles and conditions: a) all nuclear activity in the national territory will only be admitted for peaceful purposes and with the approval of the National Congress ”.

In this case, CNEN (National Nuclear Energy Commission) is responsible for the sector's legislation. Its set of Resolutions includes Nuclear Installations; Control of Nuclear Materials; Physical Protection and Fire Protection; Radiological Protection; Nuclear Materials, Ore and Minerals; Transport of Radioactive Materials; Radioactive Installations; Certification and Registration of People; Radioactive Waste and Decommissioning.

What specific national climate change legislation has been adopted?

The National Policy on Climate Change ("PNMC"), instituted and regulated by Law No. 12,187/2010, formalizes Brazil's voluntary commitment to the United Nations Framework Convention on Climate Change to reduce greenhouse gas emissions between 36.1% and 38.9% of projected emissions by 2020.

Decree No. 9,578/2018, which regulates the PNMC, proposed that the baseline of greenhouse gas emissions for 2020 was estimated at 3,236 GtCO2-eq. Thus, the corresponding absolute reduction was established to be between 1.168 GtCO2-eq and 1.259 GtCO2-eq, 36.1% and 38.9% emission reductions, respectively. In order to achieve the reduction targets, the Law also established adaptation plans at the local, regional and national levels.

Seeking to achieve said goals, the text establishes guidelines, such as promoting practices that effectively reduce greenhouse gas emissions and encouraging the adoption of activities and technologies with low emissions of these gases, in addition to sustainable production and consumption patterns.

The Executive Branch, following the guidelines of the PNMC, established sectoral plans for mitigating and adapting to climate change for the consolidation of a low carbon economy. The plans aim to meet gradual targets for the reduction of quantifiable and verifiable anthropogenic emissions, considering various sectors, such as electricity generation and distribution, urban public transport, industry, health and agricultural services, taking into account the specificities of each sector, including through the Clean Development Mechanism ("CDM") and Nationally Appropriate Mitigation Actions ("NAMAs").

The instruments for its execution are, among others: the National Plan on Climate Change, the National Fund on Climate Change and Brazil's Communication to the United Nations Framework Convention on Climate Change.

Recently, the Ministry of the Environment created – through Ordinance No. 288 of 2020 – the Floresta+ Program and its sub-program focused on GHG emissions called Floresta+ Carbono, which was created through Ordinance No. 518/2020. The first is aimed at stimulating the compensation of individuals and companies that develop activities that help preserve the Amazon environment – the project’s applicability to other regions is to be determined in the future. Its sub-program, the Floresta+ Carbono, seeks to encourage the creation of carbon credits projects for those who succeed in preserving the Amazon Forest and is intended for assisting native communities by generating a new source of income, especially towards traditional communities. 

Does your country participate in an international or national GHG emissions trading scheme?

Yes, the Brazilian Carbon Market ("MBRE"). The MBRE was created due to a joint initiative between the Brazilian Ministry of Development, Industry and Foreign Trade ("MDIC") and the State of São Paulo Stock Exchange ("BM&FBOVESPA"), in order to develop an efficient trading system for environmental certificates, in accordance with the international principles included in the Kyoto Protocol. According to BM&FBOVESPA, it seeks to “lay the foundation for a solid and active carbon market in Brazil, which can become a benchmark for participants of this market around the world”.

The MBRE was initiated through the implementation of the BM&F Carbon Facility, responsible for the registration of projects validated by “Designated Operational Entities (UN-recognized certifying agencies)”, in accordance with the criteria of a Clean Development Mechanism ("CDM").

BM&FBOVEPSA is responsible for the scheduling of the carbon credit auctions, according to the need by CDM project applicants, and such auctions are available online for all those qualified internationally to participate in the global carbon market. 

Has a national CO2 tax or similar instrument been adopted?

No. However, the Brazilian Government has been considering in recent times the implementation of market instruments to meet Brazil’s mitigation targets and reduce overall mitigation costs. One of those instruments would be assessing different carbon pricing instruments, which includes an emissions trading scheme and a carbon tax. 

Does national legislation regulate and/or subsidize carbon capture and storage (CCS)?

There are certain regulations indirectly mentioning Carbon Capture and Storage ("CCS") as one of the possible ways to reduce GHG emissions, such as the following:

  • 2009 Fundo Nacional sobre Mudança do Clima/National Fund on Climate Change - Law No. 12,114/2009 and Decree No. 9,578/2018.

The Law places in their articles, among the possible activities that can apply to the Fund's resources, the following projects: reduction of carbon emissions from deforestation and forest degradation ("REDD"), with priority for areas threatened with destruction and relevant to biodiversity conservation strategies; payments for environmental services to communities and individuals whose activities are proven to contribute to carbon storage, linked to other environmental services, among others.

  • Resolution No. 05/2016 - National Commission for REDD

The National Strategy for REDD+ ("ENREDD+") formalizes the efforts to take actions to prevent and control deforestation, in addition, to promote forest recovery and support for sustainable development. Its main objective is to contribute to the mitigation of climate change through the elimination of illegal deforestation, the conservation and restoration of forest ecosystems and the development of a sustainable low carbon forest economy, generating economic, social and environmental benefits.

To do so, it seeks to improve the monitoring and analysis of the effectiveness of public policies; integrate policy management structures for climate change, forests and biodiversity at the federal, state and municipal levels; and contribute to the mobilization of resources on a scale compatible with the national commitment established in the National Policy on Climate Change.

  • Programa Floresta+ Carbono / Forest+ Carbon Program – Ordinance No. 518/2020-MMA and Technical Note No. 353/2021-MMA

The program determines the incentive for the creation of carbon credits for those who succeed in preserving the Amazon Forest and is intended for assisting native communities by generating a new source of income, especially towards traditional communities. The main goal of this project is the maintenance and increase in carbon stocks due to native forestry conservation and recuperation. The credits are to be emitted by independent certifiers and can be traded by companies that take part in the voluntary carbon market and wish to reduce their carbon emissions regardless of legal obligations. The program was divided into three phases, which are: 

  • RECOGNITION – approval of the National Commission for REDD+’resolution, acknowledging the voluntary carbon market’s contribution to the reduction of deforestation and degradation of native forestry (Resolution CONAREDD No. 03/2020), aiming to incentivize the mobilization of private funds for structuring projects of commercialization of carbon credits generated by the preservation of native forestry.  
  • REGISTER – creation of a digital platform to begin registering projects, with a high level of requirements related to projects’ co-benefits and compliance with safeguards, with specific characteristics, observing the strategy of spreading the initiatives for their optimization and monitoring of the voluntary market (in progress). 
  • REGULATION – to be developed through the future consolidation of international regulated markets, possibly based on the criteria from Article 6 of the Paris Agreement, but that still requires the parties’ consensus. 

Besides national legislation, some states (such as São Paulo, Espírito Santo, and Rio de Janeiro) are regulating CSC in their state policies:

  • São Paulo’s Política Estadual de Mudanças Climáticas – PEMC (State Policy on Climate Change), established by Law No. 13,798/2009, for example, defines carbon sequestration/carbon sink as the “process of increasing the concentration of carbon in another reservoir other than the atmosphere, including practices of direct removal of carbon dioxide from the atmosphere, through land-use changes, forest restoration, reforestation and agricultural practices that increase the concentration of carbon in the soil, the separation and removal of carbon from combustion gases or the processing of fossil fuels for the production of hydrogen, in addition to long-term storage in empty underground reservoirs of oil and gas, coal and saline aquifers”; in addition, PEMC places among its objectives the promotion of projects to reduce emissions, sequestration or sinks of greenhouse gases, including those of the Clean Development Mechanism – CDM, and the preservation and expansion of the existing carbon stocks in the state. 

Article 27 of the PEMC also states that public policies and government programs themselves should encourage the incorporation of the climate dimension in the decision-making process regarding sectoral policies that relate to emissions and sequestration of greenhouse gases.

  • São Paulo’s SMA (Secretariat for the Environment) Resolution 30/2009 - "Establishes guidelines for voluntary reforestation projects to offset greenhouse gas emissions".

The resolution states in its article 8 that the monitoring of carbon stocks from reforestation must be carried out based on an approved methodology for the Clean Development Mechanism, according to the Kyoto Protocol. Article 9 places a limit on the maximum stocks of carbon accumulation, which is 350 tCO2 per hectare. It also mentions that the value of the carbon stock may be corrected based on the results of the monitoring carried out in accordance with the methodology approved by the Executive Board of the Kyoto Protocol for the Clean Development Mechanism.

Article 11 also states that interested organizations must register their reforestation projects for offsetting emissions in the register to be maintained by the SMA, and must present, among others, Carbon Inventory Monitoring Reports every three years.

Are the production and/or use of renewable energy sources subject to a national subsidy or similar support scheme?

In 2012, the National Electric Energy Agency("ANEEL") presented Normative Resolution No. 482/2012 regarding the possibility for the population to generate energy for their own consumption with the installation of equipment that produces renewable energy, such as solar panels. In order to stimulate this new market, the agency offered certain benefits to those who produce energy in this way, such as exemption from certain charges. 

Programa de Incentivo às Fontes Alternativas de Energia (Incentive Program for Alternative Energy Sources) – ("PROINFA")

PROINFA is a project created by Federal Law No. 10,438/2002 aiming to reduce environmental damage by encouraging the generation of electric energy through three alternative sources of energy: biomass, wind, and small hydroelectric plants ("PCHs"). 

Such sources are considered clean energy sources while being less harmful to the environment, involve a much more economically expensive operation compared to the costs of producing mainstream energy. Therefore the need to encourage the generation of electric energy from these sources relies on the guarantee of purchase of the electricity generated by them.

The incentive to use renewable sources was reinforced by the use of instruments such as the Energy Development Account ("CDE"), which is aimed at the energy development of states, in addition to promoting the competitiveness of energy produced from wind, thermal, solar and photovoltaic sources, small hydroelectric plants, biomass, other renewable sources and natural gas. 

Also, on September 1, 2006, Decree 5,882 was published, through which was established the intention to transfer to Eletrobrás (Federal energy company) the right to sell the carbon credits generated through the operation of the projects included in PROINFA. It stated that in the case of carbon credits commercialization by producers (even prior to September 1, 2006), the benefits earned would be used to reduce the prices contracted with Eletrobrás.

RenovaBio

RenovaBio, instituted by Law No. 13,576/2017, is a federal policy that aims to guarantee the strategic role of biofuels in the Brazilian energy matrix, especially in terms of energy security and reduction of GHG emissions. The program was created to generate environmental, social and public health benefits, encourage private investment, promote decentralized income generation and improve energy efficiency in the use of biofuels.

Thus, its main objectives are to encourage the expansion of biofuels, increase market predictability and create tools to assist in the fulfillment of NDC's goals.

It is a plan of national targets, defined annually for a period of 10 years, regarding the reduction of GHG emissions for different fuel distributors. The companies can choose to participate in order to be certified, subject to evaluation and efficiency scores, and from which the producers are able to generate decarbonization credits ("CBio") to be negotiated in the distributor or secondary market. Each CBio represents one metric ton of carbon saved through the utilization of biofuels versus fossil fuels.

Also, the certificate of Efficient Production of Biofuels is issued exclusively by an inspection firm authorized by the National Petroleum Agency ("ANP") as a result of the process of certification of the carbon intensity of the production of Biofuels.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the built environment?

Plano Setorial de Siderurgia (Sectorial Plan for the Steel Industry)

The Sectorial Plan for the Steel Industry, still under discussion in the federal branch, aims to jointly promote actions that prompt the transition from the current scenario to one of low emissions. The plan has two fundamental pillars: expanding the stock of planted forests and improving the efficiency and environmental quality of the carbonization process. The compilation of approved Clean Development Mechanism project methodologies, ranging from the planting of energy forests for the steel industry to the elimination of methane in the carbonization process, should enable the realization of emission reductions in order to meet the criteria of measurability, reportability and verifiability. 

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the transport sector?

Programa de Controle da Poluição do Ar por Veículos Automotores (Control Program for Air Pollution by Motor Vehicles) – PROCONVE and Programa de Controle da Poluição do Ar por Motociclos e Veículos Similares (Control Program for Air Pollution by Motorcycles and Similar Vehicles) - PROMOT  

PROCONVE instituted in 1986, and PROMOT, instituted in 2003, are programs that seek to reduce both the emission of atmospheric pollutants and noise pollution caused by motor vehicles sold in the national territory. The programs establish limits on the emission of pollutants.

Since PROCONVE uses fuel quality and the technological design of the engine as the main determining characteristics in the emission of pollutants, it focuses on the need for advanced combustion technologies and emission control devices, as well as “clean” fuels (low polluting potential) to solve the problem faced. 

Among PROCONVE goals, we highlight those established on the L7 and L8 phases of the program, which are: to establish, as of January 1, 2022, new maximum emission limits for pollutants for light road vehicles; to forbid the discount related to unburned ethanol portion of the exhaust NMOG or NMHC emissions; to establish new maximum limits for the emission of pollutants set out in a corporate manner, for light passenger vehicles and commercial light road vehicles, as of January 1, 2025; to establish the need for technical approval regarding emissions by hybrid vehicles, whether rechargeable by external energy source or not; to establish the maximum emission limit for evaporated fuel from gasoline, ethanol or flex vehicles at 0.5 gram per test day; to establish the maximum fuel vapor emission limit of fifty milligrams per liter of fuel (50mg/L) during the fuel tank filling; to establish the limit for approval and inspection of the smoke index in free acceleration for vehicles equipped with a diesel cycle engine, among others.

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the industry?

Programa Nacional de Conservação de Energia Elétrica (National Electricity Conservation Program) – PROCEL

Procel, instituted by Interministerial Ordinance No. 1,877/1985, is a government program in which the Ministry of Mines and Energy ("MME") and Eletrobras work together, aiming to promote the efficient use of electric energy and combat its waste. It aims to contribute to the increase in the efficiency of goods and services, to develop conscious habits regarding energy consumption and to postpone investments in the electricity sector.

Among PROCEL's areas of activity is Equipment, with the identification of the most efficient equipment and appliances through the Procel Seal; Buildings, with the promotion of efficient use of energy in the construction and buildings sector; Public lighting (Reluz), by supporting city halls in planning and installing public lighting equipment and traffic lights; Public authorities, with assistance in planning and implementing projects aiming at the efficient use of electricity and water in the area of sanitation; Industry and commerce, with assistance in training aimed at reducing energy waste in the segment; and Knowledge, with the dissemination of qualified information on energy efficiency. 

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in agriculture and land use?

Plano Setorial de Mitigação e de Adaptação às Mudanças Climáticas para a Consolidação de uma Economia de Baixa Emissão de Carbono na Agricultura - Plano ABC ("ABC Plan")

The ABC Plan is one of the sectorial plans created in accordance with Decree No. 7,390/2010 and aims to plan the actions to be taken for the adoption of sustainable production technologies, selected in order to meet Brazilian commitments of reduction of GHG emissions in the agricultural sector.

The ABC Plan consists of seven programs, six of which refer to mitigation technologies, and a final program with actions to adapt to climate change: Recovery of Degraded Pastures; Crop-Livestock-Forest Integration ("iLPF") and Agroforestry Systems ("SAFs"); No-Tillage System ("SPD"); Biological Nitrogen Fixation ("FBN"); Planted Forests; Animal Waste Treatment; and Adaptation to Climate Change.

Its period of validity is from 2010 to 2020 and covers the entire national territory, with revisions and updates provided for when necessary. It is estimated that resources in the order of BRL 197 billion will be needed, financed with budgetary sources or through credit lines. The ABC Plan has a credit line - Programa ABC - approved by BACEN Resolution 3,896 of 08/17/10.

Also, regarding the reduction of GHG emissions, there are two key measures that should be noted: PPCDAm and PPCerrado.

In 2004, the Action Plan for the Prevention and Control of Deforestation in the Legal Amazon ("PPCDAm") was launched, in order to mitigate the situation of deforestation in the area, with a reduction in the annual deforestation rate that reached 6,418 km² for the period 2010 -2011. In 2012, the deforestation rate reached the lowest historical value of the monitoring series, reaching 4,656 km², according to preliminary data.

The PPCDAm is structured in three thematic axes, dividing the activities into i) Land and Territorial Planning; ii) Environmental Monitoring and Control; and iii) Promotion of Sustainable Productive Activities.

PPCerrado was updated in 2011, in order to include actions and objectives expected by 2020, which would serve as guidelines for future conduct. The plan should be periodically evaluated and revised, and the sectoral plans anchored in the National Policy on Climate Change, such as Agriculture and Steel (Charcoal), have broad complementarity and integration with PPCerrado.

In 2020, the National Plan for Control of Illegal Deforestation and Recuperation of Native Forestry was presented. The new plan is divided into five pillars, that are: 

  • Zero tolerance policy on illegal deforestation; 
  • Land regulation; 
  • Spatial Planning – divided into Ecological and Economical Zoning of Territory and the Consolidation of Conservation Units; 
  • Payment for environmental services concerning the recuperation of native forestry; and
  • Implementation of bioeconomy. 

Although the measures listed above are applicable to the whole country, this plan is especially concerned with the deforestation of the Legal Amazon. It expects to designate BRL 1,06 billion for the prevention, monitoring and combat of deforestation, fires and other environmental crimes in the region.  

What are the main national measures being taken to reduce GHG emissions / improve energy efficiency in the electricity production sector?

The government programs that involve such matters are the previously mentioned Programa de Incentivo às Fontes Alternativas de Energia (Incentive Program for Alternative Energy Sources) – PROINFA, PROCEL and Renovabio, as regards their measures to improve energy efficiency, incentivize and enable the use of alternative sources of energy, causing less damage to the environment and reducing GEE emissions, as well as acting to substitute traditional sources of producing electricity.

What measures are national financial institutions (incl. banks, pension funds, asset management companies and insurance companies) aimed at reducing the GHG emissions of their customers?

Brazilian Development Bank ("BNDES") 

Regarding the topic in question, we highlight the following projects:

  • Support Program for Energy Efficiency Projects ("PROESCO"): aimed directly at supporting projects whose main objective is energy efficiency, the program targets Energy Conservation Service Companies ("ESCOS"), energy users and companies that generate energy, transmit and/or distribute energy. The Program mainly finances studies, works and installations, new machinery and equipment, information, monitoring and inspection systems and specialized technical services. It also operates in 3 modalities: Direct operation with BNDES (BNDES assumes the risks), Indirect Operation (credited institution assumes the risks) and Shared Risk (between both parties).
  • The National Fund on Climate Change ("FNMC") is a fund of an accounting nature created by Law No. 12,114/2009 and regulated by Decree No. 7,343/2010. Linked to the Ministry of the Environment, it aims to ensure resources to support projects or studies and finance projects that aim to mitigate climate change and adapt to climate change and its effects. FNMC resources are appropriations enshrined in the country’s annual budget law and in its additional credits; donations made by national and international entities, public or private; resources from interest and amortization of financing and other modalities determined by Law No. 12,114/2009.

The FNMC provides resources in two modalities: refundable and non-refundable. The BNDES invests the reimbursable resources, leaving the MMA to apply the non-reimbursable resources.

The resources of the Climate Fund can also be used to support the implementation of projects, the acquisition of machinery and equipment, and technological development that are related to the reduction of greenhouse gas emissions and adaptation to climate change and its effects. The Fund is divided into ten sub-programs: native forests; renewable energy; efficient machines and equipment; urban mobility; sustainable cities and climate change; solid waste; charcoal; carbon management and services; and innovative projects.

CAIXA Econômica Federal

CAIXA, a national bank, has also taken several actions in order to promote energy efficiency, such as Investment in renewable energy, including 44 contracted operations in 2009, adding up to BRL 4.1 billion in investments; Incentives for Sustainable Housing Construction, financing solar water heaters, economic lamps, tree planting; Promotion of energy efficiency in buildings and housing; presenting instruments such as letters of credit for construction material and assisting in the Federal Government's “Minha Casa Minha Vida” program for the construction of more sustainable and affordable houses; and the Casa Azul Caixa Seal, which aimed to qualify enterprise projects with socio-environmental criteria and that give priority to saving natural resources (energy efficiency being one of its evaluation criteria).

Financiadora de Estudos e Projetos (Financing for Studies and Projects) ("FINEP")

FINEP is a federal public company linked to the Ministry of Science and Technology, whose objective is to promote and finance innovation and research in companies, universities, research centers and institutions, aiming at the country's economic and social development. Although it is not an institution focused on energy efficiency, some of its financeable projects can be used for projects of this nature. The sectorial funds, for example, have projects in the energy sector, such as CT-Energ (electricity), CT-Hydro (water resources), CT-Mineral (mineral resources) and CT-Petro (oil and natural gas), aiming to assist in the development of the respective sectors; such projects may be directed for a greater gain in energy efficiency.

Are there prominent national climate change litigation cases in your country? If so please provide a short description (e.g. plaintiffs/defendants, public or civil law based, etc.).

To date, Brazil does not have any outstanding cases in which the central theme is climate litigation. There are, however, some cases dealing with the subject as a subsidiary matter, such as:

  • AgRg in EDcl in Special Appeal 1094.873/SP - prohibits the use of the straw burning technique in the sugarcane harvest, in view of the negative impacts on the environment, respiratory damage and contribution to global warming. The decision mentions that the economic interest of private agents should not prevail in light of environmental protection, especially when it is possible to continue the economic activity without its sacrifice.
  • Justice Antônio Herman Benjamin's votes, expressly citing the need for protection in light of climate change, in the following cases: Special Appeal 1.000.731/RO, in which the phenomenon of climate change is expressly cited as justification for the application of a fine in cases of administrative breaches resulting from illegal fires; and Special Appeal 650,728, in which the Justice mentions in his vote that it would be everyone's duty to ensure the preservation of mangroves, especially in times of climate change and rising sea levels.
  • Class Actions ("ACPs") of the Public Prosecutor’s Office of the State of São Paulo versus more than 30 airline companies – the Plaintiff seeks compensation (through forest restoration) regarding the GHG emissions caused by the daily landings and take-offs of the companies’ aircraft. Such reforestation should be enough to neutralize the pollution caused by the companies. The initial understanding in one of the lawsuits (Civil Appeal 0046991-68.2012.4.03.9999/SP) is that there would be no damage to be discussed, given the previous environmental licensing provided, which proved the regularity of the activities. This case was closed after the final decision in which the Superior Court of Justice understood that the Prosecutor did not demonstrate infringement of legal obligations by the airline company (Special Appeal No. 1856031).

Some cases at the state level also touched on the issue of climate change, such as the discussions regarding the protection of sandbank areas on the coast of São Paulo (JFSP, ACP 0000104-36.2016.4.03.6135) and the Public Class Action proposed in the state of Acre by the Public Prosecutor’s Office against the National Petroleum Agency, Petrobrás and the Federal environmental agency ("IBAMA") to question the bids for oil and natural gas exploitation in the region (ACP 0001849-35.2015.4.01.3001).

Climate change policies, measures or legislation (other than those covered by the questions above)
  • Forest Code – Law 12.651/2012: Provides for the protection of native vegetation.
  • Energy efficiency Law – Law 10.295/2001: Provides for the National Policy for Conservation and Rational Use of Energy. 
  • Resolution No. 791/2019: Deals with the individualization of mandatory annual targets for reducing greenhouse gas emissions for the sale of fuels, within the scope of the National Biofuels Policy ("RenovaBio").

Lex Mundi Global Climate Change Guide

Brazil

(Latin America/Caribbean) Firm Demarest Advogados

Contributors Luiz Fernando Sant'Anna

Updated 17 May 2021