Brazil’s legislative push on the energy transition

Brazil’s congress is trying to move forward with the approval of a series of regulations to turn the country into a global leader in terms of businesses associated with the energy transition.

As part of these efforts, several regulatory-focused bills have already been approved, while others are progressing in the lower house.

Arnaldo Jardim, a lawmaker of the centrist Cidadania party, and lower house chair of the special committee for the energy transition and green hydrogen production, speaks with BNamericas about the energy transition initiatives.

BNamericas: What are the main recent advances on the legislative agenda in terms of projects and initiatives associated with the energy transition?

Jardim: I can say that the Brazilian congress is very much in tune with the energy transition, and examples of this are approvals of bills that we have already drawn up and which have been welcomed by market participants.

What I would highlight in terms of approved bills are the fuel for the future and the one related to the regulation of green hydrogen.

But the advances don't stop there. We also approved regulations associated with the Mover program, linked to the automobile industry and the Nova Industria Brasil program. Within these two industrial programs announced by the government, there are a series of elements that will improve our environmental footprint throughout the industrial chain.

BNamericas: What is congress’ objective with the bills that have already been approved?

Jardim: We see this as a way of making Brazil more competitive.

The sectors where Brazil has clear competitive advantages compared with other countries in the world are sectors that deal with renewable energy, the environment and the approved regulations create opportunities for us on these fronts.

BNamericas: What are the next priorities for congress within this energy transition agenda?

Jardim: Along with the bills that we have approved, it’s also worth saying that the infrastructure debentures, for which we recently approved a regulation, also have aspects linked to the sustainability of projects.

One of the bills that's a priority for congress is the approval of Profert, which is a bill providing incentives for the fertilizer industry in Brazil so that, within this sector, we can use more renewable energy, develop green ammonia and particularly promote production of nitrogen fertilizers.

The objective of this bill is to reduce Brazil's dependence on imports, as we currently import 95% of the fertilizers we use.

BNamericas: What other priorities are there?

Jardim: Another issue on our priority agenda is approving a regulatory framework for the carbon credit market. We need to create this framework to unlock a series of business activities and generate opportunities in the country.

Another one is the approval of Paten, which is the energy transition acceleration program and it will regulate investments associated with the energy transition. I’m the author of this bill.

The bill has already been approved by the lower house and is now scheduled for a vote in the senate. After the senate vote it will go back to the lower house where there will be a final assessment.

The fourth priority bill to be voted on by congress is linked to a regulation of the offshore wind segment. This bill was approved a long time ago in the lower house and we’re awaiting the vote in the senate.

We’re working hard within the committee that I preside over so all the four bills that I mentioned can obtain final approval as soon as possible.

BNamericas: What's the status of the bill regarding the regulation of carbon credits?

Jardim: This bill was voted on in the senate and the lower house, and it returned to the senate where it’s practically ready to enter the voting schedule, which should happen very soon.

BNamericas: If the senate changes several items in this bill, will it go back to the lower house again for a new vote?

Jardim: No, this bill won't return to the lower house. We’re working to ensure that there's a bicameral understanding so the items to be voted on and approved in the senate are definitive.

My expectation is that the vote will take place soon, perhaps before COP29.

[Editor’s note: COP29 is the 29th UN Conference on Climate Change and will take on November 11-22 in Baku, Azerbaijan.]