Datacenters: Public consultation open on sustainability and taxation

Brazil’s Federal Government has launched a public consultation, open until October 26, 2025, to collect contributions on the regulation of the Special Taxation Regime for Datacenter Services (“REDATA”), established by Provisional Measure (“MP”) No. 1,318/2025. This program offers tax incentives for the implementation or expansion of datacenters.

The proposal — developed with the support of the Ministry of Environment and Climate Change (MMA) and the Ministry of Science, Technology and Innovation — seeks contributions regarding the sustainability criteria to be required from those interested in joining the special regime, as well as the main equipment and components that may integrate datacenters and benefit from REDATA.

The target audience of the consultation includes companies operating in the datacenter production chain, manufacturers of components and final goods in the information and communication technology sector, investors, and other potential stakeholders in Brazil.

MP No. 1,318/2025 is structured around five environmental pillars aimed at ensuring an ecological transition and prioritizing the establishment of environmentally responsible companies, through the granting of benefits linked to the sustainability criteria defined in the MP and subsequent regulations. The pillars are:

• Clean Energy: Requirement to operate using 100% renewable energy sources.
• Energy Efficiency: Definition of a Power Usage Effectiveness (PUE) index to optimize consumption with minimal energy use.
• Carbon Neutrality: Recognition of mechanisms for offsetting emissions.
• Water Efficiency: Establishment of a Water Usage Effectiveness (WUE) index to promote rational water use.
• Circular Economy: Incentives for waste reduction and material reuse.

Additional requirements for REDATA eligibility:

• Mandatory Investment: Companies must invest, within Brazil, 2% of the amount of products purchased domestically or imported under REDATA benefits in research, development, and innovation within Brazil’s digital production chains.
• Domestic Market Reserve: At least 10% of datacenter services (that is, processing, storage, and data handling capacity) must be allocated to the Brazilian domestic market.

This initiative is part of the National Datacenter Policy (“PNDC”), linked to Brazil’s New Industrial Policy (“NIB”) program, and aims to position the country as a global benchmark in sustainable digital infrastructure.

According to the 2025 National Energy Balance (“BEN”), over 70% of the electricity generated in Brazil comes from renewable sources, reinforcing the country’s image as a leader in clean and stable energy. This favorable context makes Brazil a strategic destination for datacenter installations, enabling digital solutions aligned with decarbonization and the global climate agenda.

Contributions may be submitted through the Brasil Participativo platform.

Demarest’s Environmental, ESG, and TMT teams remain available to provide any additional clarifications that may be necessary.