Newsletters

Energy and Natural Resources Newsletter | July 2026

August 6th, 2026

In order to keep our clients informed about the current landscape of the main energy and natural resources sectors in Brazil, we have prepared the Energy Newsletter, a monthly bulletin with the main news of the energy market.

This information channel is the result of the unification of our “Oil & Gas” and “Power” newsletters, designed in the context of the energy transition that is being targeted in Brazil, and prepared to be a complete source of information about the dynamic Brazilian energy market in the oil, natural gas, electricity and renewable energy sectors.

Enjoy reading!

This newsletter is for informative purposes only and does not constitute legal advice for any specific operation or business. For more information, please contact our team of lawyers.

OIL AND GAS

HIGHLIGHTS

CNPE approves increase of ethanol blend in gasoline to 32%

The National Energy Policy Council (“CNPE”) approved, on July 14, 2026, the temporary increase of the mandatory anhydrous ethanol blend in gasoline to 32% (“E32”), with an initial term of 180 days starting on August 1. The measure seeks to reduce dependence on fossil fuels in a context of rising international oil prices and may avoid the importation of approximately 900 million liters of gasoline per year, in addition to generating an estimated reduction of BRL 0.03 per liter in the fuel price paid by consumers, according to the Ministry of Mines and Energy (“MME”).

The decision comes after months of advocacy by the sugar-energy sector in favor of the measure and amid renewed tensions in the Middle East, which have pushed oil prices above USD 80 per barrel. Although the increase was approved on a temporary basis, the minister of Mines and Energy, Alexandre Silveira, stated that there is a full possibility that the new percentage may become permanent, highlighting that technical tests previously carried out had already validated the use of E32. According to the Federal Government, the adoption of ethanol as an energy policy instrument has gained relevance in light of the risks to global supply security caused by the war between the United States and Iran.

The policy, however, has come under legal challenge. On July 22, 2026, the Federal Public Prosecutor’s Office (“MPF”) filed a public civil action to suspend the implementation of E32 until the completion of supplementary technical studies that, according to the agency, would be necessary to demonstrate the safety of the new blend for the national fleet. The MPF argues that the studies used by the Federal Government did not adequately assess aspects such as durability and compatibility with different vehicle technologies, while the MME and representatives of the sugar-energy sector maintain that the tests already conducted are sufficient to support the adoption of the measure.

The approval of E32 also increased pressure from the biodiesel sector for similar measures. Entities such as Abiove, Aprobio, Ubrabio, and the Biodiesel Parliamentary Front submitted a document to President Lula advocating an increase in the mandatory biodiesel blend from 15% to 17% (“B17”), arguing that expanding biofuels reduces the country’s exposure to fluctuations in the international oil market and strengthens national energy security. Despite this pressure, the CNPE did not include changes to the biodiesel blend on the agenda of its latest meeting.

Federal Government maintains oil export tax at 12%

The Executive Management Committee of the Foreign Trade Chamber (“GECEX-CAMEX”) approved, on July 9, 2026, the maintenance of the 12% Export Tax rate levied on oil cargoes. The decision was taken at an extraordinary meeting and provides for the continuation of the charge for up to 60 days, with a reassessment scheduled after 30 days. According to the government, the measure was motivated by the worsening geopolitical tensions in the Middle East, particularly due to new episodes of instability in the Strait of Hormuz, which increased concerns regarding supply and the dynamics of international oil prices.

The rate had already been in force since March 2026 pursuant to Provisional Presidential Decree No. 1,340/2026, whose effectiveness ended on July 9. Following CAMEX’s decision, the tax will remain in force for up to 180 days. The government maintains that preserving the tax helps ensure adequate refining conditions and protect the domestic market from potential risks of fuel shortages. On the other hand, industry associations such as the Brazilian Institute of Oil and Gas (“IBP”) and the Brazilian Association of Independent Oil and Gas Producers (“ABPIP”) criticized the measure on the grounds that it creates legal uncertainty, discourages investment, and is predominantly revenue-raising in nature.

The decision reinforces the use of tax instruments as an energy policy mechanism during periods of volatility in international markets. By extending the collection of the tax even after the expiration of the Provisional Presidential Decree that established it, the government signals the priority assigned to protecting domestic supply and mitigating the impacts of external shocks on the Brazilian fuel market.

House of Representatives approves extraordinary credit to finance diesel subsidy

The House of Representatives approved, on July 8, 2026, MP No. 1,344/2026, which opens an extraordinary credit of BRL 10 billion in the 2026 Budget to subsidize part of the diesel price. The Federal Government adopted the measure to mitigate the impacts of the war in the Middle East on fuel prices and to ensure resources for maintaining the diesel subsidy policy through December 31, 2026. Following approval by the House of Representatives, the text was forwarded to the Federal Senate for consideration.

According to the government, the resources will come from the 2025 financial surplus and will be allocated to the National Agency of Petroleum, Natural Gas and Biofuels (“ANP”), which will be responsible for making the payments. The measure forms part of the set of emergency actions adopted by the government to reduce the transmission of international price shocks to the domestic fuel market. The continuation of attacks and tensions around the Strait of Hormuz, a strategic route for global oil trade, has contributed to maintaining concerns regarding international supply and to the renewed increase in oil prices, a context that supports the preservation of diesel support mechanisms.

Fuel subsidies remain under debate in the National Congress

The National Congress extended the effectiveness of the provisional measures that established fuel subsidies, allowing discussions on the matter to continue through September 2026. The Federal Government adopted the measures to mitigate the effects of rising fuel prices resulting from geopolitical tensions in the Middle East and remain under review by the Legislative Branch.

Among the measures under discussion is MP No. 1,363/2026, extended for an additional 60 days, which provides for an economic subsidy of BRL 1.12 per liter of diesel traded by producers and importers, as well as MP No. 1,358/2026, also extended, which created a cashback mechanism for taxes paid by importers and domestic refiners of gasoline and diesel. Although part of the benefits has already been in effect since May, the joint committees responsible for reviewing the texts have not yet been established, meaning that the legislative deliberation is expected to take place after the congressional recess. In the same context, the Ministry of Finance extended the subsidy of BRL 0.44 per liter of gasoline for another 30 days, maintaining the benefit that had been established in May 2026.

The debate is taking place in a context of the gradual reassessment of emergency measures adopted by the government. Some incentives have already begun to be reduced, while the continuation of benefits applicable to Liquefied Petroleum Gas (“LPG”) and aviation kerosene, for example, remains under review. The maintenance or possible revision of these mechanisms continues to be influenced by international oil price movements and the global geopolitical scenario, factors that remain at the center of discussions on energy policy and supply security in the country.

CNPE establishes new guidelines for the sale of federal natural gas

On July 30, CNPE approved a resolution that revises the rules for the sale of natural gas owned by the Federal Government. The measure allows Pré-Sal Petróleo S.A. (“PPSA”) to hold auctions to sell natural gas to the market, replacing the previous model, under which sales were conducted through internally negotiated contracts. The new system provides for short-term auctions between 2026 and 2030 and long-term auctions starting in 2030, with the aim of expanding supply and increasing competitiveness in the Brazilian natural gas market.

The resolution establishes that industrial segments with intensive use of natural gas – particularly the chemical, petrochemical, fertilizer, and steel sectors – are priorities for the supply of federal government-owned gas. According to the MME, the initiative is part of a strategy to strengthen the domestic industry by expanding the availability of natural gas at more competitive prices.

According to estimates released by the MME, the new policy could contribute to a significant reduction in the cost of natural gas for industry, thereby promoting the expansion of economic activity and investments linked to energy-intensive production chains. The measure also reinforces initiatives aimed at opening up and developing the Brazilian natural gas market, in line with the objectives of Law No. 14,134/2021 (“New Gas Law”).

NEWS

House of Representatives approves extraordinary budget appropriation to subsidize LPG imports

The House of Representatives approved, on July 15, 2026, a Provisional Presidential Decree opening an extraordinary credit of BRL 330 million for the MME, with the purpose of financing an economic subsidy for LPG imports. The measure was adopted in response to rising fuel prices resulting from the escalation of tensions in the Middle East and their impact on international oil prices.

The funds will be allocated to the subsidy established by a Provisional Presidential Decree issued in April 2026, which provides assistance of up to BRL 850 per ton of imported LPG for products delivered between April 1 and July 31, 2026. The total amount of the assistance was capped at BRL 330 million. According to Agência Eixos, the Federal Government’s concern is focused on the effects of rising LPG prices on the federal Gás do Povo program, which is responsible for providing cooking gas free of charge to millions of low-income families. The Provisional Presidential Decree is immediately effective and is expected to produce effects throughout its term, which ends in early September 2026.

The approval of the extraordinary credit forms part of the set of emergency measures adopted by the government to mitigate the effects of international price volatility on Brazilian consumers. Unlike the initiatives directed at diesel and gasoline, the focus of the intervention in the LPG market is associated not only with energy policy but also with the social protection of vulnerable families, given the relevance of cooking gas to household budgets and to the implementation of social assistance programs.

ANP approves public consultation on third-party access to pre-salt pipelines and processing facilities

On July 10, 2026, the ANP approved the launch of a public consultation and public hearing on the draft resolution regulating negotiated and non-discriminatory third-party access to production outflow pipelines and natural gas treatment and processing facilities. The consultation will remain open for 45 days, until August 31, 2026, and forms part of the agency’s 2025-2026 Regulatory Agenda, in compliance with Article 28 of the New Gas Law. One of the main aspects of the proposal is the elimination of the infrastructure owners’ right of first refusal after 30 years from the authorization, where applicable, or from the commencement of operations.

The draft resolution addresses issues related to the supplementary application of provisions of the New Gas Law concerning natural gas transportation, as well as criteria for agent remuneration, the definition of conditions and rules governing access, transparency requirements, and the adequacy of existing agreements. The text also establishes that ANP may review the agreements entered into before the resolution comes into force, which will be required to comply with the new regulation. In addition, the proposal includes mechanisms aimed at reducing information asymmetries among market participants and incorporates adjustments resulting from Decree No. 12,153/2024, which expanded the guidelines governing access to natural gas infrastructure.

According to Agência Eixos, discussions on the matter revealed differences of opinion within the ANP’s Board of Directors. Director-General Artur Watt supported a more gradual implementation of the new rules and expressed concern about potential regulatory interventions that could reduce the negotiating autonomy of infrastructure owners or discourage new investments in exploration and production activities. Conversely, Directors Pietro Mendes and Symone Araújo advocated for a faster regulatory process, arguing that the absence of clear rules has hindered third-party access to existing infrastructure, reduced competitiveness in the gas market, and limited the monetization of volumes currently being reinjected into production fields. Following the public consultation and hearing period, the proposal will return to the collegiate board for final deliberation.

ANP approves public consultation on the revision of royalty distribution criteria for municipalities affected by oil and natural gas loading and unloading operations

On July 10, 2026, the ANP approved the holding of a public consultation and public hearing to revise ANP Technical Ordinance No. 29/2001, which regulates the payment of royalties to municipalities affected by oil and natural gas loading and unloading operations. The revision stems from the enactment of Decree No. 12,849/2026, which amended Decree No. 1/1991 and began recognizing waterway terminals directly connected to offshore oil and natural gas facilities for royalty purposes.

As a result of the regulatory change, waterway terminals have been considered loading and unloading facilities as of July 1, 2026, expanding the range of structures potentially relevant to the allocation of financial compensation payments. The decree granted the ANP authority to define the technical criteria for calculating royalties in such cases and established that the volumes of oil or gas handled may not be accounted for simultaneously by both the waterway terminal and the offshore facility to which it is connected, in order to avoid double counting and duplicate financial compensation.

Because the measure concerns the regulation of a federal decree, the ANP’s Board of Directors waived the requirement to conduct a Regulatory Impact Analysis (“AIR”). The revision of the regulation seeks to adapt the royalty-sharing criteria to the changes introduced by the new decree and to provide greater legal certainty regarding the identification of facilities that give rise to municipalities’ entitlement to financial compensation. The definition of these criteria may have significant implications for the future distribution of royalties among municipalities associated with oil and natural gas transportation infrastructure.

ANP publishes updated guidance handbook for fuel retail stations

The ANP published, on July 9, 2026, a new edition of its Fuel Retail Station Handbook, a guidance document intended to assist market participants engaged in the retail sale of automotive fuels. According to the agency, the updated version incorporates procedures established under current legislation and consolidates guidance on the main regulatory obligations applicable to fuel retail stations.

The handbook is organized into eight sections covering topics such as operators’ obligations, risks associated with the commercialization of off-specification fuels, the most common fuel adulteration practices identified during inspections, regulatory prohibitions, enforcement actions, rights relating to retained samples, fuel quality testing, and the core legislation governing the sector. The ANP highlights that the activity, regulated by Law No. 9,847/1999, requires agency authorization pursuant to ANP Resolution No. 948/2023.

The updated publication reinforces ANP’s strategy of promoting broader dissemination of regulatory and compliance information throughout the fuels industry. Although the handbook does not replace applicable legislation, its use is expected to facilitate understanding of regulatory requirements and inspection procedures relevant to the activity.

ANP approves public consultation and hearing on the revision of fuel specifications for waterway use

On July 24, 2026, the ANP’s Board of Directors approved the opening of a 45-day public consultation and a public hearing on a draft resolution revising ANP Resolution No. 903/2022, which establishes the specifications for marine diesel oil and marine fuel oil sold within Brazil. The proposal seeks to align Brazilian regulations with the 7th edition of ISO 8217, published in 2024, and with the maritime transport decarbonization targets established by the International Maritime Organization.

Among the main points of the draft are the restructuring of the specification tables for marine fuels, with the inclusion of classes for fuels containing biodiesel; the recognition of biodiesel with a content of up to 100% for regular marine use; and the treatment of green diesel and synthetic fuels as drop-in components, capable of replacing fossil fuels without the need to adapt engines or existing infrastructure.

Additionally, the draft allows the ANP to authorize, on an experimental basis, the use of alternative fuels not yet covered by ISO 8217, such as ethanol, methanol, ammonia, and hydrogen, and establishes a specific regulatory framework for liquefied natural gas (LNG). This measure is part of the ANP’s effort to modernize national regulations in line with technological advances in the sector and international standards applicable to maritime transport.

POWER

Regulation

MME Publishes Regulation on Compensation for Generation Curtailment

On July 21, the Ministry of Mines and Energy (“MME”) issued Ordinance No. 140/2026, establishing the procedures for entering into a Commitment Agreement aimed at compensating electricity generation curtailments affecting wind and solar photovoltaic power plants between September 1, 2023, and November 25, 2025, pursuant to Article 1-B of Law No. 10,848/2004, as amended by Law No. 15,269/2025. Subject to compliance with the applicable participation rules and conditions, interested parties must first register their expression of interest through the dedicated Celebra platform.

CMSE: Committee establishes rules for thermal generation dispatches

Following a decision by the plenary of the Federal Court of Accounts (“TCU”), the MME published CMSE Resolution No. 1/2026, establishing new guidelines and requirements for the Electric Sector Monitoring Committee (“CMSE”) to determine generation dispatches for energy supply security purposes, a mechanism typically associated with the dispatch of thermoelectric generation outside the merit order. The resolution provides greater transparency to the decision-making process.

CMSE approves measures to prepare the power system for El Niño

At its 321st Meeting held on July 22, 2026, the Electric Sector Monitoring Committee (“CMSE”) approved a series of measures aimed at strengthening the reliability of Brazil’s power system in light of the expected impacts of El Niño and the uncertainties arising from the current geopolitical landscape.

Among the measures approved by the committee are: (i) the acceleration of certain generation projects awarded in the 2022 and 2026 Capacity Reserve Auctions; and (ii) the inclusion of a new analytical variable in the Monthly Energy Operation Program (“PMO”) beginning in 2027, related to the expansion of the installed electricity generation capacity of power plants operating in the free market environment.

Review the Meeting Information Note.

ANEEL: New rules for self-generation

The Brazilian Electricity Regulatory Agency (“ANEEL”) published Order No. 2,414/2026, establishing guidelines for the Electric Energy Trading Chamber (“CCEE”) to implement new Article 16-B of Law No. 9,074/1995, introduced by Law No. 15,269/2025, the New Electric Sector Framework. The decision consolidates interpretations of the new rules governing electricity self-generation and the classification as a self-generator, providing greater predictability in operationalizing the new legal framework and defining how situations established under the previous regime should be treated.

Read Order No. 2,414/2026

ANEEL: Board orders technical analysis and official communication to MME regarding bidding procedures for DIT works

As reported by MegaWhat, ANEEL’s Board of Directors ordered the submission of an official communication to the MME requesting that the ministry assess the feasibility of conducting competitive bidding procedures for the expansion and exclusive intervention works involving Other Transmission Facilities (“DITs”) whenever the estimated investment and the nature of the works are technically and economically compatible with a bidding process.

In his vote, the reporting director, Gentil Nogueira, noted potential economic and technical efficiency gains for the system through the possible adoption of bidding procedures for the procurement of such works.

Institutional

MME: Ministry prepares publication of decree on offshore wind projects

According to Agência Infra, the MME is preparing to publish, in the coming months, a decree regulating offshore wind projects in Brazil. The plan is for the legal framework to be enacted by the end of 2026, allowing the first auction to allocate offshore areas for generation facilities to be held in 2027.

Read Agência Infra’s report

National Congress: Senate discusses bill establishing new mandatory procurements

The Federal Senate Infrastructure Services Committee approved Bill (“PL”) No. 5,017/2019, which provides for benefits applicable to semi-artesian wells, changes to the allocation of battery storage procurement costs, and mandatory procurement of gas-fired thermoelectric plants and small hydropower plants. The bill, currently under consideration by the Senate plenary, has generated intense debate among sector participants, members of Congress, and the Federal Government.

Follow the bill’s legislative progress

National Congress: Chamber appoints rapporteur for data center bill

The House of Representatives’ Mining and Energy Committee appointed Federal Representative Danilo Forte (PP-CE) as rapporteur for Bill No. 490/2026, which proposes authorizing the Federal Government to adopt instruments to encourage the supply of clean and competitive energy to data centers located in the North and Northeast regions, among other measures, including the creation of the “Regional Green Data Center” certification. The bill represents a resumption of discussions regarding data centers within the committee following the expiration of the Special Tax Regime for Data Center Services (“REDATA”).

Follow the bill’s legislative progress

Ceará: State government approves law to attract data centers and energy storage systems

The Government of the State of Ceará approved Bill No. 69/2026, aimed at easing environmental licensing procedures for data centers and battery energy storage systems in order to attract new investments to the state. The measure seeks to accelerate the implementation of these projects.

Read Bill No. 69/2026

System Operation

MME: Ministry announces acceleration of the Graça Aranha–Silvânia bipole project

According to MegaWhat, the MME announced that the commissioning of the Graça Aranha–Silvânia transmission bipole will be brought forward. Originally scheduled for 2030, the project is now expected to begin operations in March 2028, increasing energy exchange capacity among the Northeast, Midwest, and Southeast regions.

Read the news article

ONS: System operator presents 2026–2030 PEN results, addressing MMGD and curtailment

The National Electric System Operator (“ONS”) presented the results of the 2026–2030 Energy Operation Plan (“PEN 2026”), which assesses the adequacy of the National Interconnected System (“SIN”) over the next five years.

The report projects average annual electricity demand growth of 4.2%, reaching approximately 98.8 average GW by 2030. It also anticipates significant growth in the participation of solar photovoltaic generation and distributed microgeneration and minigeneration (“MMGD”), which together are expected to account for 31.7% of the electricity matrix by 2030.

PEN 2026 also includes a new chapter dedicated to the assessment of curtailment, featuring a probabilistic analysis of multiple wind and solar generation scenarios and hourly demand profiles. The study indicates maximum restrictions of up to 40 GW, primarily for energy-related reasons.

Check the 2026–2030 Energy Operation Plan results

ONS: Operator conducts Third Competitive Demand Response Mechanism

The ONS held the Third Competitive Demand Response Mechanism for the procurement of the “availability” product. With record-breaking results, the process reaffirms the importance of Demand Response for the operation of the power system.

EPE: BRL 79.1 billion projected for transmission system investments

The Energy Research Office (“EPE”) projected BRL 79.1 billion in investments for the transmission system under the new cycle of the Transmission Expansion Program (“PET”) and the Long-Term Expansion Plan (“PELP”). The studies indicate the need for transmission network expansion and reinforcements, consistent with load growth, the expansion of renewable energy sources, and the need for greater integration among the SIN subsystems.

The projection reinforces the importance of transmission investments to enable the connection of new generation projects, reduce operational constraints, and increase electricity supply security. The new PET/PELP cycle is expected to support sector planning and the structuring of future transmission auctions.

Read about the Transmission Expansion Program

Auctions

ANEEL: Agency approves initiation of public consultation on electricity auction notice

ANEEL’s Board of Directors approved the opening of Public Consultation (“CP”) No. 019/2026, aimed at discussing the draft auction notice and potential improvements to it. The consultation concerns the A-1, A-2, and A-3 Existing Energy Auctions, respectively: ANEEL Auction No. 7/2026, ANEEL Auction 8/2026, and ANEEL Auction 9/2026. Contributions may be submitted until August 24, 2026.

ANEEL: Companies participating in the second public session of Auction No. 1/2026 are qualified

On July 24, the ANEEL announced the qualification of the companies awarded contracts during the second public session of Transmission Auction No. 1/2026, concerning Lots 7 through 10.

Review the ANEEL notice.

ONS and EPE: Entities issue technical note relevant to the 2026 LRCAP – Storage

The EPE and the ONS issued Technical Note No. NT-ONS DPL 0057/2026 / EPE-DEE-RE-067/2026-r0, addressing the methodology, assumptions, and criteria to be adopted for defining the Remaining Transmission Capacity of the SIN for energy evacuation. The capacity is associated with the connection and procurement of new Battery Energy Storage Systems (BESS) under the 2026 Capacity Reserve Auction in the Form of Power (“LRCAP”).

Read the technical note

Demarest in the Media

Demarest’s partners participate in the Energy Summit 2026

Our partners, Rosi Costa Barros and Henrique Silva Reis, participated in two separate panels at Energy Summit 2026, one of the leading annual events in Brazil’s electricity sector. Rosi Costa Barros participated in the panel “Innovation in the Energy Sector and New Business Models: How Market Participants Are Reinventing Themselves,” while Henrique Silva Reis participated in the panel “Legal Framework and Challenges for the Integration of Energy Storage Solutions in Brazil.”

Regulatory Monitoring

ANEEL: Board decisions

In July, ANEEL advanced several matters of broad relevance to the sector. Below we highlight some of the main topics, together with links to the board members’ votes and published acts:

2026 A-1, A-2, and A-3 Existing Energy Auctions: By unanimous decision, the board initiated a public consultation, running from July 9 to August 24, 2026, to gather contributions aimed at improving the draft notice and related annexes for ANEEL Auctions No. 7/2026, 8/2026, and 9/2026. Among the topics submitted for discussion are the proposed enhancement of the financial guarantees under the Regulated Market Energy Trading Agreements (“CCEARs”), including an increase in coverage from three months to one year of sales revenue; the possibility of linking a generation project to the agreement in lieu of a financial guarantee; and the reassessment of the energy delivery-by-submarket rule, in light of potential financial exposures arising from price differences between submarkets borne by purchasers and regulated consumers. (Vote and Public Consultation No. 20/2026).
Revision of the X-Factor Methodology: During the Fourteenth Ordinary Public Meeting of 2026, ANEEL approved the opening of a specific public consultation to gather information and contributions for revising the X-Factor Methodology – Productivity Component (Vote and Public Consultation No. 20/2026).
Underground Networks: During the Fourteenth Ordinary Public Meeting, ANEEL discussed opening another public consultation focused on evaluating underground networks and other network standards aimed at increasing the resilience of electricity distribution systems in the face of more frequent extreme weather events. The matter was removed from the agenda.
Extension of PROINFA Plant Concessions: During the twelfth deliberative circuit, ANEEL discussed extending the concession terms of plants whose energy purchase agreements under the Incentive Program for Alternative Electricity Sources (“PROINFA”) had their supply period extended pursuant to Article 23 of Law No. 14,182/2021, as regulated by Decree No. 10,798/2021. However, the matter was removed from the agenda.

LRCAP 2026 – National Storage: At its 15th Ordinary Public Meeting (RPO), ANEEL’s Board discussed the controversial aspects of the Notice for the 2026 LRCAP – National Storage auction, associated with the innovative nature of this technology, and approved the opening of a specific public consultation to discuss improvements to the proposed notice for the auction (Board Opinion).
LRCAP 2026 – Storage: ANEEL’s Board approved the opening of a specific public consultation to discuss improvements to the proposed notice for the auction (Board Opinion).
Public Consultation No. 45/2019 – Generation Reduction or Limitation: Following the opinion issued by Reporting Director Agnes Costa at the 4th Ordinary Public Meeting (RPO) of 2026, Director Fernando Mosna presented a separate opinion, agreeing with the conclusion of the third phase of the public consultation, but proposing the opening of a fourth phase to gather additional input and information regarding the results of the shadow period referred to in Articles 12 and 13 of the draft normative resolution attached to the separate opinion. However, the matter was not approved by the board, as Director Gentil Nogueira requested additional review (Board Opinion and Separate Opinion).

LRCAP 2026 and Trading Rules: The board unanimously approved the opening of a specific public consultation to (i) gather additional input and information regarding amendments to the Trading Rules for the inclusion of the 2026 LRCAP auctions and (ii) approve the provisional application of the Trading Rules upon the launch of such public consultation, with the possibility of the appropriate adjustments by the CCEE should amendments be approved upon the conclusion of the public consultation (Board Opinion).
PNAST: Reporting Director Fernando Mosna, joined by Directors Gentil Nogueira and Willamy Frota, voted (i) to open a public consultation to gather additional input and information regarding the draft normative resolution and the proposed revisions to Modules 1 and 5 of the Transmission Services Rules approved by Normative Resolution No. 905/2020, including the amendment proposed in paragraph 78 of the Reporting Director’s opinion; and (ii) to require the ONS, within 45 days, to submit proposed amendments, as well as any other amendments deemed necessary, to the Grid Procedures related to the operationalization of the duties assigned to it under Decree No. 12,772/2025, which established the National Transmission System Access Policy (“PNAST”). Deliberations on the matter were not concluded, as Director-General Sandoval Feitosa requested additional review of the proceeding.

ANEEL: Allocation of proceedings

In July, new cases were assigned and distributed among ANEEL’s directors. Among these cases, we highlight the following due to their scope and subject matter:

Case	Subject Matter	Randomly Assigned Reporting
48500.016976/2026-37	Establishment of a market service indicator for the public electricity distribution service	Agnes Maria de Aragão da Costa
48500.015992/2026-11	2026 LRCAP – National Storage, through new battery energy storage systems with domestic content	Gentil Nogueira de Sá Júnior
48500.019603/2026-18	2026 LRCAP – Storage, through new battery energy storage systems	Gentil Nogueira de Sá Júnior
48500.004840/2026-84	Regulation of the phase-out of discounts on the Distribution System Use Tariff (“TUSD”) and the Transmission System Use Tariff (“TUST”) applicable to consumers, pursuant to Section 14 of Article 26 of Law No. 9,427/1996, as introduced by Law No. 15,269/2025	Willamy Moreira Frota
48500.019929/2026-45	Accountability Report for the Fifth Resource Allocation Plan of the National Program for Electricity Conservation (Fifth Procel PAR)	Gentil Nogueira de Sá Júnior
48500.015356/2026-81	Proposed amendments to the commercialization rules to incorporate the 2026 LRCAP auctions held in March 2026	Willamy Moreira Frota

Monitoring

Brazilian Congress – Highlights

Proposal	Content	House	Date
Bill No. 4499/2026	Establishes the National Community Solar Energy Program in Indigenous Territories and Riverside Communities (Sol da Floresta) and sets forth guidelines to expand access to sustainable electricity in isolated and hard-to-reach areas.	Brazil’s House of Representatives	July 17, 2026
Bill No. 4495/2026	Establishes the National Program for Reducing the Duration of Interruptions to Essential Public Services (Resposta Essencial), aimed at reducing outages affecting water supply, electricity services, and other essential public services in critical situations, particularly in vulnerable areas and remote regions.	Brazil’s House of Representatives	July 17, 2026
Bill No. 3744/2026	Establishes the Legal Framework for the Decentralized Electricity Market (“MMDEE”); sets rules for bilateral electricity trading; creates the Experimental Regulatory Sandbox for innovation in the power sector; governs smart energy communities, digital energy assets, smart contracts, and decentralized electricity trading; amends Law No. 14,300 of January 6, 2022, Law No. 9,427 of December 26, 1996, and Law No. 10,848 of March 15, 2004, among other provisions.	Brazil’s House of Representatives	July 15, 2026
Bill No. 3716/2026 ^HIGHLIGHT	Repeals the provision of Law No. 10,848 of March 15, 2004, concerning the allocation of costs associated with the procurement of energy storage systems.	Brazil’s House of Representatives	July 15, 2026
Bill No. 3660/2026	Amends Law No. 9,991 of July 24, 2000, to include energy efficiency measures in public healthcare facilities within Brazil’s Unified Health System (“SUS”) among the priorities of energy efficiency programs undertaken by electricity distribution concessionaires and permit holders, among other provisions.	Brazil’s House of Representatives	July 13, 2026
Bill No. 3629/2026	Provides for the physical identification and traceability of the occupation of utility poles that integrate electricity distribution networks by telecommunications service providers and other authorized occupants.	Brazil’s House of Representatives	July 9, 2026
Bill No. 3625/2026	Establishes the National Program for Democratizing Access to Solar Energy (“PRODSOL”); creates the Solar Credit Line with amortization mechanism linked to the consumer’s electricity bill; amends Law No. 14,300 of January 6, 2022, to provide for a solar escrow account and simplified approval procedures for photovoltaic systems; amends Law No. 8,036 of May 11, 1990, to authorize the use of FGTS funds for the installation of solar generation systems; establishes Community Solar Condominiums; creates a specific budgetary program eligible to receive individual, caucus, and committee congressional amendments; among other provisions.	Brazil’s House of Representatives	July 9, 2026
Bill No. 3567/2026	Limits the growth of sectoral charges levied on electricity tariffs; prohibits the creation, expansion, or extension of tariff subsidies without identifying a funding source other than the tariff itself; establishes transparency obligations for electricity bills; and amends Article 13 of Law No. 10,438 of April 26, 2002.	Brazil’s House of Representatives	July 8, 2026
Bill No. 3522/2026	Amends Law No. 12,334 of September 20, 2010, to address the declaration of emergency conditions at dams by the developer, emergency measures for the protection of people and the environment, and the exercise of administrative enforcement powers by the supervisory authority.	Brazil’s House of Representatives	July 7, 2026
Bill of Supplementary Law No. 198/2026	Amends Complementary Law No. 214 of January 16, 2025, to provide for the exclusion from the calculation basis of the Contribution on Goods and Services (“CBS”) and the Tax on Goods and Services (“IBS”) of amounts related to electricity offset under the Electricity Compensation System (“SCEE”).	Brazil’s House of Representatives	July 6, 2026

Federal Court of Accounts (“TCU”)

Case

Highlights

Topic

Ruling

015.228/2026-6

Ruling 1891/2026 – Plenary

2026 LRCAP – Storage

The TCU authorized the initiation of an oversight proceeding, under the monitoring modality, concerning the implementation of the first LRCAP – Storage auction.

024.746/2024-0

Ruling 1631/2026 – Plenary

Self-generation

The TCU assessed Brazil’s electricity self-generation policy and concluded that it requires improvements. The policy currently provides economic incentives for consumers to invest in electricity generation facilities to meet their own consumption needs.

The audit found that self-generators benefit from the stability of the electricity system without making a sufficient contribution to its maintenance. Self-generators do not pay for the services required to maintain the reliability and stability of the power system, thereby shifting these costs to other consumers.

National Energy Sector Agenda – August

Days	Event	Segment	Information
30 and 31	31st Distributed Generation Regional Forum	Distribution, Generation, and Energy Trading	website
29 to 31	Sergipe Oil & Gas 2026	Oil and Gas	website
29 to 31	7th Waste-to-Energy Forum – ABREN	Energy Sector	website
25 to 27	Intersolar South America 2026	Solar Energy	website
04 to 06	ES Oil & Gas Energy 2026 + MEC SHOW 2026	Oil, Gas, and Energy	website

Auctions

October 2026: 2026 LRCAP – Storage Auction

More information here

October 2026: Transmission Auction No. 002/2026

More information here

November 2026: 2026 “A-1”, “A-2”, and “A-3” Existing Energy Auctions

More information here

April 2027: Transmission Auction No. 001/2027

To be conducted by ANEEL.

October 2027: Transmission Auction No. 002/2027
To be conducted by ANEEL.

RENEWABLES

HIGHLIGHTS

Federal Government publishes final version of the 2035 Ten-Year Energy Expansion Plan, projecting BRL 3.5 trillion in investments

On July 2, 2026, the MME published the final version of the 2035 Ten-Year Energy Expansion Plan (Plano Decenal de Expansão de Energia 2035), prepared by the Energy Research Office (Empresa de Pesquisa Energética – “EPE”). The document projects the evolution of energy supply and demand in Brazil over the next decade and estimates approximately BRL 3.5 trillion in investments in the sector. Among its main projections is the increase in installed electricity generation capacity from 255 gigawatts to approximately 367 gigawatts by 2035, driven primarily by the expansion of wind and solar sources and distributed generation.

According to the plan, energy demand is expected to grow at an average rate of 1.8% per year, while total energy supply is projected to increase by 2.3% per year through 2035. Renewable sources are expected to account for 51% of domestic energy supply and 86% of national electricity generation by the end of the period. In centralized generation, wind power output is expected to increase from 122.4 terawatt-hours (“TWh”) in 2025 to 184.1 TWh in 2035, while solar generation is projected to rise from 35.8 TWh to 58.7 TWh. The study also forecasts the need for approximately 19 additional gigawatts (“GW”) of flexible thermoelectric power plants to provide security and flexibility to the system in light of the growing share of variable renewable energy sources.

The document also increased the estimated demand for battery energy storage systems by 2035 to more than 6 GW – more than double the 2.8 GW projected in the previous plan. The revision takes into account the expected reduction in energy storage technology costs and the implementation of the first battery-specific auctions. At the same time, the supply of natural gas for power generation is expected to more than triple, increasing from 19.3 TWh to 74.5 TWh, particularly as a result of growing production from the pre-salt fields of the Campos and Santos Basins and the post-salt fields of the Sergipe-Alagoas Basin. These projections reinforce the need for a coordinated expansion of generation capacity, energy storage, and flexible resources to preserve the reliability of the electricity system as Brazil’s energy transition advances.

CNPE restricts use of imported biodiesel in the mandatory diesel blending requirement

On July 14, 2026, the CNPE approved a resolution establishing that biodiesel intended to comply with the mandatory blending requirement in diesel fuel must be produced exclusively by domestic facilities authorized by the ANP. In practice, the measure prevents the use of imported biodiesel in the mandatory blend, currently set at 15%, but does not prohibit its commercialization for other purposes permitted under the applicable regulations.

The decision is consistent with the recommendations issued in a Regulatory Impact Analysis conducted by the Interministerial Working Group created by the CNPE in 2023. The study assessed the effects of biodiesel imports and the Social Biofuel Seal (Selo Biocombustível Social) on compliance with the mandatory blending requirement and supported the proposal submitted by the MME for public consultation. According to information attributed to the ministry, the measure was approved following a new assessment of supply conditions, indicating that domestic production has sufficient output and installed capacity to meet demand in the mandatory market.

NEWS

Brazil ranks third globally in savings generated by renewable energy

The International Renewable Energy Agency (“IRENA”) published a study on July 2, 2026, ranking Brazil third among countries that achieved the greatest savings from avoiding fossil fuel consumption in 2025, reflecting the significant share of renewable sources in its energy matrix. Brazil’s savings were estimated at USD 32 billion, behind only China, with approximately USD 177 billion, and the United States, with USD 35 billion. Globally, the expansion of renewable energy sources avoided approximately USD 480 billion in expenditures on oil, natural gas, and coal, in addition to preventing the emission of 8.4 billion tons of carbon dioxide.

The findings highlight the strategic potential of Brazil’s energy matrix, which combines a high share of renewable sources with competitive power generation costs. According to IRENA, the expansion of these sources not only reduces expenditures on fossil fuels but also strengthens energy security and economic resilience by reducing exposure to fluctuations in international oil, natural gas, and coal markets, as well as to the impacts of geopolitical shocks.

Ministry of Finance opens public consultation on sectoral coverage of Brazil’s regulated carbon market

On July 28, 2026, the Ministry of Finance opened a public consultation on the proposed sectoral coverage of the Brazilian Greenhouse Gas Emissions Trading System (“SBCE”). The preliminary text defines the economic sectors that will be required to gradually comply with monitoring, reporting, and verification (“MRV”) obligations for greenhouse gas emissions, as well as the proposed implementation schedule. The public consultation will remain open until August 28, 2026.

The proposal, presented in May, provides for the gradual introduction of the obligations in three stages. The first stage, expected to begin in 2027, will cover the pulp and paper, integrated iron and steel, cement, primary aluminum, oil and natural gas exploration and production, oil refining, and air transport sectors. The second stage, expected to begin by 2029, will include mining, recycled aluminum, semi-integrated iron and steel, the electric power sector, glass, ceramics, the food and beverage industry, the chemical industry, and solid waste and wastewater treatment. The third stage, expected to begin by 2031, will cover road, rail, and waterway transport. According to the Ministry of Finance, additional sectors may still be incorporated into Stages 1, 2, or 3, in accordance with applicable regulations.

Defining sectoral coverage for MRV purposes is one of the pillars of SBCE implementation, as it will enable the creation of an official, consistent, and reliable database on greenhouse gas emissions. This information is expected to support the future definition of other core regulatory parameters of the system, such as the emissions cap, the allocation rules for Brazilian Emission Allowances (“CBEs”), and the limits on the use of Verified Emission Reduction or Removal Certificates (“CRVEs”) for compliance with SBCE obligations. Companies potentially falling within the listed sectors are advised to closely monitor the public consultation process and to begin assessing the potential regulatory and compliance impacts of the forthcoming obligation to monitor, report, and verify their emissions.

OPPORTUNITIES

TYPE	DESCRIPTION	CONTRIBUTION DEADLINE	CODE / NOTES
Petróleo Brasileiro S.A.	Technical engineering, construction, and installation services for the replacement of submarine electro-optical cables (umbilicals) connecting the Ilha D’Água and Ilha Redonda Terminals.	August 10, 2026, at 12:00 p.m.	7004606599
Petróleo Brasileiro S.A.	Supply of a Floating Production Storage and Offloading (“FPSO”) Unit and provision of pre-operation, operation, and maintenance services under a BOT (Build, Operate, and Transfer) model for the Albacora Revitalization Project.	August 10, 2026, at 5:00 p.m.	7004415516
Petróleo Brasileiro S.A.	Acquisition of urea-based clarifying agent and lease of offshore tanks under a global contract.	August 10, 2026, at 5:00 p.m.	7004597246
Petróleo Brasileiro S.A.	Subsea EPCI – Engineering design, supply of goods, subsea installation, and subsea tie-in services (“SEAP”).	August 14, 2026, at 12:00 p.m.	7004597133
Petróleo Brasileiro S.A.	Chartering of two Anchor Handling Tug Supply (“AHTS”) vessels, including the provision of specialized technical services.	August 21, 2026, at 12:00 p.m.	7004345558
Petróleo Brasileiro S.A.	Contracting of Engineering, Procurement, and Construction (“EPC”) services for the completion of the following units: warehouses 78B and 78D; substations (SE-5200, SE-8020, SE-8040, SE-6900, and SE-9000); Emergency Response Center (“CRE”); cooling towers (U-52 and U-53); industrial wastewater treatment unit (U-90); and Emergency Response Training Center (“CTCE”), as well as the commissioning of all systems.	August 31, 2026, at 12:00 p.m.	7004579659
Petróleo Brasileiro S.A.	EPCI engineering, procurement, construction, and installation services for Permanent Accommodation Modules (“MDA”), and supply of goods for the P-68, P-70, and P-71 platforms of BS.	August 31, 2026, at 5:00 p.m.	7004548299
Petróleo Brasileiro S.A.	EPC services for the revamp of the Delayed Coking Unit (U-52) at REGAP.	October 9, 2026, at 5:00 p.m.	7004591313
Call for Contributions (“TS”) – ANEEL
TS 018/2026^NEW	Gathering input for improving ANEEL’s Reference Price Database, as set forth in Ratifying Decision No. 758/2009.	Until July 31, 2026
CPs – ANEEL
Not yet available on ANEEL’s website	Gathering input and additional information regarding amendments to the Trading Rules for the inclusion of the 2026 Capacity Reserve Auctions in the Form of Power (LRCAP), held in March 2026.	Until September 12, 2026
Not yet available on ANEEL’s website	Gathering input for improving the proposed notice for the 2026 Capacity Reserve Auction in the Form of Power (LRCAP) – Storage.	Until September 14, 2026
Not yet available on ANEEL’s website	Gathering input for improving the proposed notice for the 2026 Capacity Reserve Auction in the Form of Power (LRCAP) – National Storage.	Until September 14, 2026
CP 021/2026^NEW	Gathering input for improving the notice of the 2026 ANEEL Innovation Award.	Until August 17, 2026
CP 020/2026^NEW	Gathering input for reviewing the methodology of the X Factor – Productivity Component (“PD”).	Until August 31, 2026
CP 019/2026^NEW	Gathering input for improving the draft notice and respective annexes of ANEEL Auctions No. 7/2026, No. 8/2026, and No. 9/2026, respectively referred to as the 2026 “A-1”, “A-2”, and “A-3” Existing Energy Auctions, aimed at the procurement of electricity from existing generation facilities.	Until August 24, 2026
CP 018/2026^NEW	Gathering input for improving ANEEL’s Regulatory Impact Analysis under R&D Activity 22-02 – “Enhancement of the Energy Efficiency Program for the Energy Transition”, included in the Regulatory Agenda.	Until August 10, 2026
CP 017/2026	Gathering input for establishing the CCEE’s sanctioning proceeding framework.	Until August 24, 2026	Deadline extended
CP 016/2026	Gathering input for improving Joint Regulatory Impact Analysis Report No. 1/2026-STR/STD/ANEEL and the proposed regulation concerning the methodology for defining a fixed charge intended to cover commercial costs within the tariff structure applicable to low-voltage consumers, under Cycle 1 of the distribution tariff modernization agenda.	Until September 08, 2026
CP 015/2026	Gathering input for improving the Regulatory Impact Analysis Report and the draft normative resolution amending Annex VIII to Normative Resolution No. 948 of November 16, 2021.	Until July 28, 2026	Deadline extended
CPs – MME
CP 226/2026^NEW	Electricity Transmission Grant Plan (“POTEE”) 2026 – Expansions and Reinforcements – Basic Network and Other Transmission Facilities (First Issue)	Until August 13, 2026
CP 224/2026^NEW	Strategic and guiding instrument aimed at strengthening Brazil’s national energy data ecosystem, with a focus on the governance, standardization, integration, interoperability, quality, security, transparency, accessibility, and strategic use of energy-related data and information.	Until July 30, 2026

*Please note that the deadlines in the table above are subject to constant change; therefore, the deadlines listed here were in effect at the time of this newsletter’s publication.