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Energy Newsletter | March 2024
April 12th, 2024
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 collaboration between our “Oil & Gas” and “Energy” teams.
The newsletter was designed within the context of the energy transition that is being targeted in Brazil, and drafted as a complete source of information about the dynamic Brazilian energy market within the oil, natural gas, electricity and renewable energy sectors.
Enjoy reading!
Oil and Gas
HIGHLIGHTS
ANP discusses proposed revision of oil price rules for calculating government
On March 06, 2024, the Brazilian National Agency for Petroleum, Natural Gas and Biofuels (“ANP”) held Public Hearing No. 18/2023, on the proposed regulation amending ANP Resolution No. 874/2022, which establishes the rules governing the criteria for fixing the reference oil price adopted to calculate government take (royalties and special holdings).
The proposed resolution remained open for public contribution for 45 days, during which 30 contributions were collected from interested parties in this matter. The proposal under discussion introduces regulatory changes in relation to that submitted to Public Hearing No. 24/2022. Among the changes made, we highlight the inclusion of time triggers and the change in the reference price quotation of heavy derivatives.
Click here to access the article.
ANP progresses towards regulating hydrocarbon concentration in natural gas
On March 07, 2024, the ANP’s board approved the Regulatory Impact Analysis (“AIR”) regarding hydrocarbon concentration found in natural gas, as established by ANP Resolution No. 16/2008.
The next step involves ANP’s revision of this resolution, which will include steps such as public consultation and public hearing in order to receive contributions from society.
The associated pre-salt gas, which is increasingly predominant in national production, carries intrinsic characteristics that distinguish it from the post-salt gas traditionally explored and consumed domestically, thus providing Brazil with a new source of gas. These characteristics exclude pre-salt-associated gas from the quality specifications regulated by the ANP through ANP Resolution No. 16/2008. In order to solve the resulting regulatory problem, the ANP chose to carry out another AIR.
The multi-criteria analysis methodology employed selected the following option as the most suitable one to solve the problem: “Uphold the current natural gas specification established in ANP Resolution No. 16, of 2008, with regard to the limits of hydrocarbons (methane, ethane, propane, butane and heavier hydrocarbons) and establish a provision enabling authorizations or changes to the limits of hydrocarbons for specific cases.”
According to the ANP, the chosen option represents a balance between the other options analyzed, as it upholds the current specification and further allows the ANP, in special situations, to authorize – after carrying out analyses and verifying compliance with the key conditions – the trading of natural gas based on different parameters from those established in the regulation, in order to eliminate obstacles to increase internal gas production.
Ideally, new authorizations must be founded on arguments that indicate, among other aspects, technical and economic difficulties in complying with the limits laid down for hydrocarbons, identifying any consumers impacted by the authorization requested and, if applicable, the corresponding mitigating measures. In addition, these authorizations will be monitored by using specific indicators and will be subject to a time limit.
Click here to access the article.
ANP updates oil blend specifications for calculating government take
On March 25, 2024, the ANP published the updated technical specifications for oil blends in the Federal Official Gazette of Brazil (“DOU”).
These specifications are used to determine the oil reference price (“PRP”) used to calculate government and third-party take, as established in ANP Resolution No. 874/2022. The new oil blends will be applied to calculate the PRP from the volume produced in February 2024.
The annual verification process of these oil blends is based on information provided by the operators of producing fields verified by the ANP. According to paragraph 1, Art. 7, of ANP Resolution No. 874/2022, operators must submit updates of the technical specifications of oil blends produced to the ANP until the last working day of February of each year.
After the analysis, 74 oil blends were approved, from both offshore and onshore producing fields. These oil blends encompass numerous aspects of the technical specifications for the hydrocarbon produced: API degree; sulphur concentration; total acidity; amount of nitrogen; and cut-off point (fraction of light, medium and heavy distillates).
Click here to access the article.
ANP approves prior consultation on price transparency of derivatives and biofuels by producers, importers and distributors
On March 28, 2024, the ANP’s board approved a prior consultation on the Preliminary Report on Regulatory Impact Analysis (“RPAIR”) regarding the review of ANP Resolution No. 795/2019, which addresses the duty to submit price data on the trading of oil and biofuel derivatives by producers, importers and distributors.
According to the ANP, an amendment to the resolution was considered to be necessary in order to enhance pricing transparency and to further reduce information divergence involved in this process.
Among the improvement points suggested, we highlight the following:
- mandatory publication of listed price for agents who work in primary supply and whose traded volume is significant;
- publication, in advance, of the internal variables provided for in the pricing and readjustment conditions for the price indicated;
- explanation of the methodology used for calculating the external variables provided for in the pricing and readjustment conditions for the price indicated; and
- change in the ANP’s current analysis, which will be carried out from contract models.
In addition, both the mandatory submission of the price indicated through contract as well as the prohibition on the use of destination restriction clauses were upheld.
NEWS
ANP creates a specific form for small and medium-sized companies to apply for reduced royalties
According to news published by the ANP on March 01, 2024, from this date onwards, small and medium-sized companies wishing to apply for reduced royalty rates, as provided for in ANP Resolution No. 853/2021, must observe a specific application model, available in the “royalties” section, on the ANP’s website.
This measure aims not only to allow full submission of data and documents to the ANP, but also to streamline the organization and standardization of the applications that have been submitted. In addition, the form mentioned above will enable more precise identification of the technical and legal requirements applicable to each case, considering other mechanisms relating to incentive measures towards reduced royalties for producing fields.
The applications to reduce royalty rates, based on ANP Resolution No. 853/2021, must observe the new application model provided. Once completed, the application must be submitted for analysis via electronic petitioning in the Electronic Information System (“SEI”).
Click here to access the article.
ANP publishes consolidated data of oil and gas produced in January
On March 01, 2024, the ANP published the Monthly Newsletter of Oil and Natural Gas Production, which provides for the consolidated data regarding Brazilian production throughout the abovementioned period.
According to data published by the ANP, the total production (oil + natural gas) reached 4.487 million barrels of equivalent oil per day (boe/d).
Regarding oil, 3.519 million barrels per day (bbl/d) were produced – a drop of 1.8% compared to the previous month, yet an increase of 7.5% compared to January 2023. As for natural gas, 153.93 million cubic meters per day (Mmm³/d) were produced in January – a drop of 1.7% compared to December 2023, but an increase of 7.6% compared to January 2023.
The pre-salt total production (oil + natural gas) for January reached 3.389 million boe/d, corresponding to 75.5% of the Brazilian production. These figures indicate a drop of 2.8% compared to July 2023, yet a 7.0% increase compared to January 2023. According to the ANP, 2.670 million barrels of oil per day (bbl/d) and 114.32 million cubic meters of natural gas per day were produced from 148 wells.
In January 2024, 97.1% of natural gas was used. Of this percentage, 52.36 million m³/d were made available to the market and burning reached 4.55 million m³/d. These results represent a 33.9% increase in burning compared to December 2023, and 13.0% compared to January 2023. Such an increase in burning is common when new platforms are commissioned, which occurred in January 2024, after FPSO Sepetiba started operating, in Campo de Mero.
Click here to access the article.
ANP updates list of small and medium-sized companies operating in oil and gas exploration and production
On March 06, 2024, the ANP published the updated list of small and medium-sized companies operating in oil and natural gas exploration and production in Brazil.
According to 2023 data, there are 25 companies framed as small and 10 as medium-sized. The ANP updates its data annually.
ANP Resolution No. 32/2014 provides for the criteria for framing an oil and natural gas exploration and production company as small or medium-sized. Companies framed as small and medium-sized, according to the ANP criteria, can apply for reduced royalty rates in their own fields. Granting this reduction is subject to analysis by the ANP and to compliance with other requirements provided for in ANP Resolution No. 853/2021.
Click here to access the article.
ANP launches system to check status of cooking gas stations and retailers
On March 06, 2024, the ANP launched its Public Data Consultation (“CPD”) system, which allows users to consult the total or partial ban or suspension status of automotive fuel or LPG (cooking gas) retailers.
This information is extremely important for automotive fuel and LPG distributors, because, as established in Law 9,847/99, which regulates the supervision of activities relating to the national fuel supply, distributors cannot sell fuel to establishments banned by the ANP.
Consultation in the CPD system can be carried out using the resellers’ Taxpayer Identification Number (“CNPJ”). Subsequently, the system displays whether, at the time of consultation, the economic agent in question is totally or partially banned by the ANP.
Click here to access the article.
ANP publishes results regarding compliance with the New Gas Law
On March 06, 2024, the ANP published the results regarding compliance with the duties provided for in the New Gas Law.
The ANP’s measures encompassed:
- granting authorizations to new traders, carriers and importers;
- publishing data through its dynamic dashboards and monthly newsletters;
- standardizing transport service contracts progressively; and
- discussing and regulating the provisions of the new legal framework.
After ANP Resolution No. 961 2023/51/2016 was published, amending ANP Resolutions No. 51/2016 and No. 11/2016, the process of offering and contracting capacity for transportation in pipelines was simplified – in line with the principles of the New Gas Law.
Due to these changes, Brazil’s Northeast region stood out in the process of opening the natural gas market. At the end of 2022, independent sellers (not Petrobras) accounted for approximately 75% of sales, and this ratio increased to 81% at the end of 2023 (November). In addition, the average tax-free price of further sellers was approximately 30% lower than that applied by Petrobras. In this regard, the number of companies supplying natural gas to the integrated network continued to grow, from 3 in 2021 to 15 in 2022, and 19 in 2023 (until November).
Click here to access the article.
ANP initiates research on decommissioning of maritime production facilities
On March 22, 2024, the ANP announced a comprehensive research on “legal and regulatory aspects for decommissioning offshore O&G production facilities in Brazil.”
Experts in the legal and regulatory areas of the oil and gas market (“O&G”) are the target audience, as well as representatives of this sector and public entities involved in this subject.
The research is carried out in collaboration with the Federal University of Rio de Janeiro (“UFRJ”), with which the ANP entered into a Technical Cooperation Agreement (“ACT”). The objective is to deepen the understanding around the subject and collect proposed measures that can be implemented in the short, medium and long term to support the development of the decommissioning market in Brazil.
The results of this research will be presented in a future seminar, in which legal and regulatory aspects involving the decommissioning of O&G production facilities in Brazil will also be discussed.
Click here to access the article.
ANP’s board approves partial result of the 4th Cycle of Permanent Concession Offer
On March 26, 2024, ANP published the partial approval of the results from the 4th Cycle of Permanent Concession Offer, held on December 13, 2023.
Overall, 192 exploratory blocks as well as Japiim’s marginal accumulation area were auctioned by 16 winning bidders. Two of the winning bidders, which have acquired three exploratory blocks, are still in the process of qualification, and therefore the areas will be adjudicated at a later date.
The process is now moving forward to the submission phase of financial guarantees backing minimum exploratory investments, delivery of mandatory documents, and payment of the subscription bonuses offered.
The concession contracts are expected to be executed by June 28, 2024.
Click here to access the article.
POWER
HIGHLIGHTS
ANEEL launches public consultation on ONS decision-making procedures
On March 07, 2024, the National Electric Energy Agency (“ANEEL”) opened Public Consultation (“CP”) No. 007/2024, aimed at obtaining contributions from agents to improve the Regulatory Impact Assessment Report and the draft of the normative resolution on the decision-making procedures carried out by the National Electric System Operator (“ONS”). ANEEL aims to regulate the challenge procedure of acts carried out by the ONS. In short, the discussion will address matters which are generally decided by the ONS, such as:
- Unavailability analysis, restriction of operating capacity, and overload in transmission facilities;
- Unavailability analysis of power generation projects;
- Monthly calculation of variable payments relating to unavailability or restriction of the operating capacity of transmission facilities; and
- Calculation of Inefficiency Payments for both Overrun and Overcontracting.
Agents can submit their contributions by April 22, 2024, to cp007_2024@aneel.gov.br.
Access CP No. 007/2024 and the article published by ANEEL.
TCU discusses the potential illegal energy trade of credits within the scope of distributed generation
On March 13, 2024, the Brazilian Federal Court of Accounts (“TCU”) accepted a complaint by the Audit Department for Electric and Nuclear Power (“AudElétrica”) to investigate potential violations by agents that integrate the distributed generation sector – in non-compliance with Article 28 of Law No. 14,300/2022 (“Legal Framework for Distributed Generation”) –, as well as measures to be adopted by ANEEL regarding this matter. Article 28 establishes that “distributed microgeneration and minigeneration refer to the production of electricity for self-consumption”.
According to AudElétrica, the agents could be acting in violation of the Legal Framework for Distributed Generation with the potential illegal energy trade of electricity credits to captive consumers through “energy subscriptions”, which could be the cause of distortions in the energy market and undue subsidies to certain groups of consumers.
The TCU stated that the irregularity identified is the “veiled sale of electricity” through corporate schemes provided for in the Legal Framework for Distributed Generation, such as consortiums, cooperatives, and associations, or the monetizing of the power plant through rental. It also highlights examples of companies offering energy subscriptions.
The complaint also points out that although ANEEL has initiated Call for Contributions No. 18/2023 to discuss this matter, it has not been verified that the matter will be part of ANEEL’s Regulatory Agenda for the 2024/2025 biennium, nor in the 2024 Annual Management Plan. For this reason, it is understood that ANEEL is expected to implement inspection measures and improve regulations to curb these practices.
The decision authorizes ANEEL’s hearing to both collect evidence of compliance as well as to verify TCU’s possibility to determine that the agency:
- develop an inspection plan to identify and sanction cases of non-compliance with Article 28 of the Legal Framework for Distributed Generation;
- include, in this inspection plan, measures to hinder the registration of new irregular projects until the regulations on the subject are developed;
- develop an action plan to regulate the matter in order to hinder the sale, even indirectly, of energy, credits, or energy surpluses from distributed generation; and
- include, in this action plan, measures aimed at projects already framed as distributed generation projects.
Access TCU’s proceedings on this matter.
TUST and TUSD integrate the ICMS calculation basis, according to STJ
On March 13, 2024, the First Section of the Superior Court of Justice (“STJ”) unanimously ruled that the Tariffs for Use of the Distribution and Transmission System (“TUSD/TUST”) must be considered in the calculation basis of the Tax on Circulation of Goods and Services (“ICMS”) for electricity. The inclusion applies when these tariffs are listed in the energy bill as a charge to be paid directly by the end consumer, regardless of whether they are free or captive consumers.
For more information, access the client alert by Demarest’s Tax team on this matter.
ANEEL publishes technical note on the extinction of TUSD/TUST discounts
On March 22, 2024, ANEEL published Technical Note No. 55/2024-SGM-SCE/ANEEL, which analyzes the contributions to Public Consultation No. 20/2023, addressing the extinction of TUSD/TUST discounts for incentivized sources.
The purpose of this public consultation is to discuss the changes introduced by Law No. 14,120/2021, which established the cessation of TUST/TUSD discounts, preceded by a transition period. A few highlights provided in the document, which consolidated the draft resolution on the matter, are as follows:
- In the case of projects that applied for an authorization grant within 12 months of the publication of Law No. 14,120/2021, the discount on TUST/TUSD will only be applied if and after all the plant’s generating units reach commercial operation before the 48-month limit from the date of the grant. This topic received many contributions from agents, as some of them expressed that this discount would already be applicable from the moment the grant is issued, and so it would be necessary to verify whether the requirements are met in the future.
- The discount must be applied when the generating units reach “commercial operation”, and not during “test operations” (as was suggested by some agents).
- There will be no “exclusion of liability” regarding the verification of deadlines and legal requirements for applying the discount.
- The deadline established in Law No. 14,120/2021 for initiating commercial operation also applies to hydroelectric projects of up to 30,000 kW.
- The discount for power plants with reduced capacity has not been extinguished, nor has the law in question imposed any conditions on its use. In any case, the draft resolution on the subject clarifies that it is forbidden to split power plants into smaller plants in order to receive the discount.
Upon the issuance of Technical Note No. 55/2024-SGM-SCE/ANEEL, ANEEL’s Board of Directors must express its opinion regarding the draft resolution on the matter and, if approved, it will be published.
NEWS
ANEEL initiates public consultation on user satisfaction regarding electricity tariff calculation methods
On March 05, 2024, ANEEL opened Public Consultation No. 008/2024 to analyze the inclusion of the “User Satisfaction” component in the calculation of the “X Factor” for the electricity tariff of distributors. The X Factor aims to transfer the productivity gains achieved by distributors to consumers, also considering the results of incentive mechanisms. According to ANEEL’s technical areas, the current tariff component does not adequately capture the drop in consumer satisfaction concerning the energy distribution service.
Access CP No. 008/2024 and the article in full.
Brazil leaps six positions in energy consumer freedom global ranking
On March 05, 2024, the Brazilian Association of Energy Traders (“ABRACEEL”) announced that Brazil had advanced six positions in the global ranking that assesses the freedom of electricity consumers in 56 countries, rising to the 41st position. The ranking considers countries that hold regulations authorizing electricity consumers to participate in free energy markets.
TCU to inspect energy import authorization process
On March 06, 2024, the Plenary of the TCU announced that it would inspect the process of authorizing energy imports, with a special focus on isolated systems and on supplying the energy load of Roraima. The purpose of the inspection is to examine the import of energy from Venezuela, whose authorization was granted to an agent in the sector and which, according to the TCU, was negotiated at a higher price in comparison with the prices in force until 2019. According to the TCU, “the negotiation lacks minimum transparency and competitive requirements”.
Access the article in full as well as TCU’s announcement.
Power Capacity Reserve Auction: public consultation opens discussion on new products
On March 08, 2024, the Ministry of Mines and Energy (“MME”) opened MME Public Consultation No. 160/2024 (“CP No. 160/2024”), which aims to obtain contributions on the draft ordinance governing the guidelines for the next 2024 Power Capacity Reserve Auction (“LRCAP”).
CP No. 160/2024 was expected to remain open for contributions until March 28, 2024. However, on the same day, Ordinance No. 775/GM/MME/2024 was published, thus extending the deadline for contributions until April 26, 2024.
Access the client alert by Demarest’s team on this topic.
Access Ordinance No. 775/GM/MME/2024.
Congress member submits bills on energy distribution concessions to the House of Representatives
On March 13, 2024, Congress member Hugo Leal, who integrates the PSD-RJ political party, submitted three bills to the House of Representatives establishing the guidelines for energy distribution concessions.
- Bill No. 444/24 proposes significant changes in the assessment of the quality of electricity distribution services so that power unavailability on unusual days is considered when calculating distributors’ performance indicators.
- Bill No. 445/24 supports the participation of the states and the Federal District in electricity distribution contracts, both through agencies affiliated with ANEEL and through a Concession Contract Advisory Council.
- Bill No. 446/24 proposes that information on distribution grids, such as the load availability map, be made available in advance in order to simplify consumer connection procedures.
The three bills are currently under analysis by the House of Representatives and will be further examined by the Brazilian Federal Senate.
Access Bill No. 444/24, Bill No. 445/24, Bill No. 446/24.
TCU carries out operational audit on the sector’s energy efficiency policies
On March 20, 2024, a Plenary Session of the TCU was held, which resulted in Decision No. 456/2024. The decision addresses the operational audit process carried out to evaluate public policies and programs aimed at energy efficiency in the electricity sector.
The following government initiatives were audited:
- the National Policy for the Conservation and Rational Use of Energy (“PNCURE”);
- the Brazilian Labeling Program – (“PBE”);
- the Energy Efficiency Program (“PEE”); and
- the National Electricity Conservation Program (“PROCEL”).
The audit indicated the “absence of a structured plan with indicators, targets, and necessary measures to guide and coordinate the electricity sector’s energy efficiency initiatives in an integrated manner”. As a result, the following measures were determined, to be carried out within 180 days:
- The Management Committee for Energy Efficiency Indicators and Levels as well as the National Institute of Metrology, Quality and Technology must develop an action plan that establishes a system aimed at updating the minimum efficiency standards for energy-consuming machines and appliances.
- ANEEL must develop a specific risk management plan for PEE and optimize the current tools to unify the program’s data information system.
- Empresa Brasileira de Participações em Energia Nuclear e Binacional S.A. must develop action plans regarding PROCEL to assess the impacts of reducing resources and making data available in an open format.
- The MME must develop action plans for energy efficiency policies, a structured government plan for the electricity sector, as well as integrated monitoring and evaluation of efficiency policies and programs.
Access the appellate decision in full.
Renewables and other Energy Sources
ANEEL opens call on hydrogen projects
On March 12, 2024, following Public Consultation No. 18/2023, ANEEL determined the rules for Call No. 23/2024 on hydrogen projects in the electricity sector. This call aims to register projects supported by the Research, Development, and Innovation Program (“PDI”), with a focus on the production of renewable hydrogen.
Call No. 23/2024 includes:
(i) the implementation of a hydrogen production system from renewable sources of electricity generation (hydro, solar, and wind), as well as low-carbon, biomass, nuclear, geothermal, marine, or thermoelectric sources (with carbon capture, storage, and use); or
(ii) the development or nationalization of technologies that contribute to the energy efficiency of hydrogen conversion and/or storage processes. The deadline for the project’s implementation is 48 months.
Interested companies must express their interest through the following e-mail address: pedestrategico@aneel.gov.br.
Access the article in full and the rules on Call No. 23/2024.
ANEEL approves Strategic Plan for the 2024-2027 cycle
On March 21, 2024, Ordinance No. 6,886 was published, approving ANEEL’s Strategic Plan for the 2024-2027 cycle. Among the issues addressed in the Strategic Plan, ANEEL included several topics on Energy Transition, such as:
- expanding knowledge on Energy Transition and its application at ANEEL;
- demonstrating cost allocation and the use of subsidies in Energy Transition; and
- aligning ANEEL’s regulatory activities relating to Energy Transition.
Access the Strategic Plan for the 2024-2027 cycle in full.
“Fuel of the Future” is approved by Brazil’s House of Representatives
On March 13, 2024, Brazil’s House of Representatives approved the “Fuel of the Future” bill, which introduces a number of measures to foster decarbonization, mobility and energy transition.
Among them are the creation of the State Electric Vehicle Program (“PEVE”), the State Biomethane Program (“PEB”), and other incentives to boost the development of renewable energy, hydrogen and biofuels. The Bill will now go to the Brazilian Senate for analysis.
Among the points encompassed in the approved bill, we highlight:
- Ethanol blend: the new ethanol-gasoline mix margin will increase from 22% to 27%, and can reach 35%. Currently, the mixture can reach 27.5%, of which at least 18% account for ethanol.
- Biodiesel: 14% biodiesel must be mixed with fossil diesel as of March 2024. From 2025 onwards, 1 percentage point will be added to the mixture annually until it reaches 20% by March 2030.
- National Green Diesel Program (“PNDV”): by 2037, the National Energy Policy Council (“CNPE”) will fix the minimum amount annually, in terms of volume of green diesel added to fossil diesel. Such addition must reach at least 3% per volume and will consider trading across Brazil as a whole.
- National Sustainable Aviation Fuel Program (“PROBIOQAV”): the ANP will establish the amounts of the total equivalent emissions per energy unit calculated in the cycle “from well to burning” of each technological route of sustainable aviation fuel production (“SAF”), in order to calculate decarbonization in relation to fossil aviation kerosene.
- Biomethane: the CNPE will establish an annual target for reducing greenhouse gas emissions in the market of natural gas traded, self-produced or self-imported by natural gas producers and importers, to be complied with by using biomethane to consume natural gas. The obligation will enter into force on January 01, 2026, with an initial amount of 1%, which cannot exceed the mark of 10% reduction in emissions.
- Carbon capture and storage: the capture of carbon dioxide for geological storage purposes, its transport through pipelines and geological storage will be carried out upon authorization by the ANP. This authorization will be valid for 30 years, which can be extended for the same period.
The proposal was forwarded for analysis and approval by the Federal Senate.
Decree regulating infrastructure debentures published
On March 27, 2024, Decree No. 11,964/2024 was published, which aims to regulate the criteria and conditions for prioritizing infrastructure projects for issuing securities with tax incentives, as established by Law No. 12,431/2011 and Law No. 14,801/2024.
Thus, the new decree regulates the so-called “infrastructure debentures”, which supplement the well-known “incentivized debentures” (also regulated by Decree No. 11,964/2024).
Among the energy sector’s projects addressed by Decree No. 11,964/2024 and which can be eligible for issuing securities with tax incentives are:
- energy generation, transmission and distribution from renewable sources;
- natural gas;
- production of biofuels and biogas, except for the agricultural phase;
- production of low-carbon synthetic fuels;
- low-carbon hydrogen;
- capture, storage, handling and use of carbon dioxide; and
- pipelines for transporting fuel, including low-carbon biofuels and synthetic fuels.
Click here to access Decree No. 11,964/2024 in full.
NEWS
House of Representatives approves bill to create Energy Transition Acceleration Program
On March 20, 2024, the House of Representatives approved Bill No. 5174/2023, which establishes the Energy Transition Acceleration Program (“PATEN”), which seeks to encourage the financing of sustainable development projects and allow the use of credits from private legal entities before the Federal Government as an instrument for financing and fostering the generation and efficient use of low-carbon energy. The bill also creates the “Green Fund”, managed by the Brazilian Development Bank (“BNDES”), which is a private equity fund, aimed at guaranteeing the risk of financing granted by financial institutions for the development of projects within the scope of PATEN.
Access the article and Bill No. 5174/2023.
Federal Government submits Bill on Green Mobility Program
On March 20, 2024, the Federal Government submitted to the National Congress, on an urgent basis, a bill establishing the Green Mobility and Innovation Program (“MOVER”), which contains the same text as Provisional Measure No. 1,205/2023, published on December 30, 2023.
The core purpose of the program is to foster investments in energy efficiency, establish minimum recycling limits in vehicle manufacturing, create the Green IPI to benefit the least polluting industries, and reduce carbon emissions by 50% by 2030. In order to achieve this target, MOVER establishes stricter sustainability criteria for new vehicles sold in Brazil. One of the key innovations is the measurement of carbon emissions throughout the vehicle’s life cycle, from production to disposal. This approach will contribute significantly so that Brazil meets its environmental obligations and moves towards a greener and more responsible economy.
MOVER is a follow-up to Rota 2030, introducing major changes. For example, vehicles will be taxed based on indicators such as the source of energy for propulsion, energy consumption, engine power, recyclability, structural performance, and driver assistance technologies. Those that implement more sustainable practices will be rewarded with tax benefits.
Another significant difference concerns the reduction of Import Taxes. Manufacturers that import parts and components that do not have a local equivalent will be entitled to reduced taxes. However, in order to obtain this benefit, they must invest 2% of the total amount imported in research, development, and innovation projects in areas considered to be priorities in the supply chain. The funds from this investment will be allocated to the National Industrial and Technological Development Fund, which will be created through a decree and managed by the BNDES.
These measures aim to foster sustainability, innovation, and energy efficiency in the Brazilian automotive industry, thus contributing to a more conscientious and ecologically responsible future.
International investors recognize progress in Brazil’s energy transition policies
On March 21, 2024, during the panel called “Brazil: Global leader in renewable energy”, at CERAWeek by S&P Global, held in Houston, United States, several representatives of the domestic and international private sector recognized the progress in Brazilian public policies aimed at energy transition.
The minister of Mines and Energy, Alexandre Silveira, explained the ongoing efforts to ensure regulation and stability for attracting new investments to the country.
Silveira highlighted the importance of stabilizing investments in a globalized world, and recognized that investors seek safe regulations and lower-risk environments. The minister also emphasized that energy transition is one of the government’s priorities, leading the efforts towards reducing emissions and fostering the production of clean and renewable energy, both domestically and internationally.
The minister noted that Brazil is moving forward in all areas, assuming global leadership as regards the production of clean energy and biofuels, and that it will use the presiding opportunity at G20 and COP 30 to highlight the country’s capabilities and also propose a balanced transition. In addition, Silveira mentioned policies such as “Fuel of the Future”, recently approved by the House of Representatives, which is aimed at decarbonizing transport and mobility in Brazil, and further discussed Brazil’s projects to develop the energy industry in a sustainable way, including opportunities involving hydrogen and the country’s participation in the Global Offshore Wind Alliance.
Click here to access the article.
In Canada, the Brazilian Ministry of Mines and Energy launches a guide on critical energy transition minerals
On March 03, 2024, the Ministry of Mines and Energy (“MME”) participated in the Prospectors & Developers Association of Canada (PDAC) – a renowned global mining and mineral research convention.
Representing the minister of Mines and Energy, Alexandre Silveira, director of MME’s Department of Transformation and Mineral Technology, Rodrigo Cota, launched, during the Brazil-Canada Mining Brunch event, the Guide for Foreign Investors in Critical Minerals for Energy Transition in Brazil.
In turn, Minister Silveira highlighted that Brazil is one of the world leaders in energy transition, emphasizing the country’s wide range of natural resources, clean energy sources, qualified workforce and promising opportunities for the advancement of the value-added sector. Silveira stated that “through this guide, we seek to attract investments and establish partnerships for the benefit of Brazil.”
On March 04, 2024, the Brazilian Mining Day event was held and gathered exhibitors, investors, analysts, mining executives, geologists and government representatives, who participated in panels and lectures focused on the current topics involving the Brazilian mining industry.
During the opening ceremony, the MME representative stressed the importance of Brazil’s presence in events such as PDAC. The event schedule included debates regarding important mineral research projects involving low-carbon technologies, government regulations, legal certainty and capital fund investments in strategic minerals in Brazil.
OPPORTUNITIES
| TIPO | DESCRIÇÃO | PRAZO DE CONTRIBUIÇÃO | CÓDIGO / OBSERVAÇÕES |
| Petrobras Contracting | EPC for installation of remaining sections to be built involving the OCERJ oil pipeline | May 28, 2024
12:00 PM |
7004257557 |
| Petrobras Contracting | FPSO for SEAP- I – Chartering and Operation Services | June 14, 2024
12:00 PM |
7004032918 |
| Petrobras Contracting | FPSO for SEAP-II – Chartering and Operation Services | June 14, 2024
12:00 PM |
7004032955 |
| Petrobras Contracting | Chartering and Operation Services of FPSO – Barracuda and Caratinga Revit | July 01, 2024
12:00 PM |
7004050042 |
| Petrobras Contracting | Offshore Design, Repair and Maintenance Services, including Parts and Pieces for the UN-BC maritime units | April 16, 2024
08:00 PM |
7004252317 |
| Petrobras Contracting | Provision of VSAT technology-based remote stations, with Global Coverage, on board of TRANSPETRO’s fleet of ships | April 19, 2024
12:00 PM |
7004265204 |
| Petrobras Contracting | Chartering up to 12 PSV vessels – Platform Supply Vessel, of Brazilian Flag. | August 02, 2024
05:00 PM |
7004265988 |
| Petrobras Contracting | Maintenance Services for Energy Systems, Cleaning, Conservation and Building Maintenance of TIC’s Telecommunication Stations, Supply of Applicable Parts and Pieces and Leasing of Equipment | April 16, 2024 12:00 PM |
7004259331 |
| Petrobras Contracting | SCM – Telecommunications Services – GMP2021 | April 16, 2024
12:00 PM |
7004259402 |
| Public Consultations (MME) | |||
| CP No. 160/2024 | Obtain contributions on the draft ordinance that establishes the guidelines for the Electric Power Contracting Auction, based on new and existing generation projects, known as the “2024 Power Capacity Reserve Auction – 2024 LRCAP”. | April 26, 2024 | |
| Public Consultations (ANEEL) |
|||
| CP No. 007/2024 | Obtain contributions to improve the Regulatory Impact Analysis Report and draft Normative Resolution attached to Technical Note 112/2023-SGM-STD/ANEEL, which addresses the decision-making procedures of the ONS. | April 22, 2024 | |
| CP No. 008/2024 | Obtain contributions on the Regulatory Impact Analysis Report No. 2/2023 and further contributions aimed at improving the regulations to increase consumer satisfaction. | April 22, 2024 |
** Please note that the deadlines in the table above are constantly changing and correspond to the deadlines disclosed at the time of publication of this newsletter.
WHATS COMING UP
 |
August 30, 2024 – Power Capacity Reserve Auction
To be held by ANEEL. |
 |
August/2024 – New Energy Auctions “A-4” and “A-6”
To be held by ANEEL. |
 |
September/2024 – Transmission Auction 002/2024
To be held by ANEEL. |
 |
October/2024 – Auction for the Supply of Isolated Systems
To be held by ANEEL. |
 |
November/2024 – Auction for Contracting Capacity Reserve
To be held by ANEEL. |
 |
December/2024 – Existing Energy Auctions “A-1” and “A-2″
To be held by ANEEL. |
 |
July/2025 – Auction for Contracting Capacity Reserve
To be held by ANEEL. |
| |
March/2025 – Transmission Auction 001/2025
To be held by ANEEL. |
| |
August/2025 – New Energy Auctions “A-4” and “A-6”
To be held by ANEEL. |
| |
September/2025 – Transmission Auction 002/2025
To be held by ANEEL. |
| |
October/2025 – Auction for the Supply of Isolated Systems
To be held by ANEEL. |
| |
November/2025 – Auction for Contracting Capacity Reserve
To be held by ANEEL. |
| |
December/2025 – Existing Energy Auctions “A-1” and “A-2″
To be held by ANEEL. |
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Bianca Reis
João Raphael Oliveira Aranha
Laura Isabelle Guzzo
Lívia Sousa Borges Leal
Luis Eduardo Ribeiro
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Roberta Coelho de Souza Batalha
Thais Araujo Rato Tarelho
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