Brazilian President Enacts Offshore Wind Law, Vetoes Fossil Energy-Related Additions

Brazil’s President Luiz Inácio Lula da Silva has signed into law the bill recently passed by the Brazilian Senate that establishes regulations on allocating and permitting offshore wind development areas. The Brazilian president has vetoed provisions related to fossil fuels in the final version of the legislation which were added while the bill was in the Chamber of Deputies.

As reported in December 2024, the new law, first introduced in 2021, focuses on offshore wind and other offshore renewable energy sources and establishes an approach to identifying and awarding offshore wind areas, as well as the licensing processes, and mandates lease payments to the State. The regulation applies to all projects located off the Brazilian coast, including territorial waters, the continental shelf and the Exclusive Economic Zone (EEZ). 

During its time in the Chamber of Deputies, the lower house of Brazil’s Congress, the bill was amended to also contain provisions for fossil fuel subsidies, including coal and natural gas. This was debated in the Senate with some senators welcoming the provisions and others saying these would cause an average increase of 7.5 per cent in Brazilians’ energy bills and were not related to the original subject of the bill which is renewable energy.

In December 2024, Senator Randolfe Rodrigues said President Luiz Inácio Lula da Silva would repeal the provisions related to fossil fuels, which he now did. The enacted bill was published in Brazil’s Official Gazette on 10 January and shows articles 22, 23 and 24 vetoed.

In a press release issued on 10 January, the administration states that “the presidential vetoes represent a course correction” by removing provisions unrelated to offshore wind power generation that were not included in the original bill. According to the president’s office, these provisions were “contrary to the sanctioned Law as they aim to maintain more polluting, expensive and inefficient sources such as thermoelectric, coal and gas plants” and they involved changing the tariff correction indexes to a parameter that was less advantageous for the citizens.

Besides establishing the main spatial planning and permitting framework for offshore wind, the new law also provides incentives for the development of the domestic supply chain, job creation and integration of economic and environmental aspects.

The revenue generated from concessions fees and proportional participation in the energy produced will be distributed among states and municipalities, with investments primarily designated for research, technological innovation and sustainable development.

Interest in building and operating offshore wind farms in Brazil is immense, with the country’s Institute for the Environment and Natural Resources (IBAMA) having started over a hundred reviews of applications for environmental investigation permits. According to the latest project map on IBAMA’s website, by 10 December 2024, the Institute initiated the environmental licensing process for 103 offshore wind projects, accounting for 244.6 GW in potential installed capacity.