The Brazilian Supreme Court (“STF”) dismissed Direct Actions of Unconstitutionality N. 7,596 and 7,617 (“ADIs”), in which the Renovação Democrática Party (“PRD”) and the Democratic Labour Party (“PDT”), respectively, challenged provisions of Federal Law N. 13,576/2017, which established the National Biofuels Policy (“RenovaBio”). The decision led by the Reporting Justice Nunes Marques confirmed the constitutionality of the compulsory decarbonization targets and the Decarbonization Credit model (“CBIO”), as well as the obligation imposed on fossil fuel distributors to acquire such credits, emphasizing that “the debate on RenovaBio needs to gravitate around the serious climate issues that have put the world on alert.”.
RenovaBio is a federal government program aimed at promoting the decarbonization of the transportation sector by encouraging the production and use of biofuels and contributing to the reduction of greenhouse gas emissions in Brazil. The program establishes: decarbonization targets applicable to fossil fuel distributors; issuance of CBIOs by biofuel/biomass producers; and acquisition of CBIOs by distributors for the purpose of demonstrating compliance with the decarbonization targets.
Through the ADIs, it was argued (1) violation of constitutional principles such as equality, free enterprise, free competition, and the polluter-pays principle; (2) that RenovaBio would impose an excessive burden on distributors—characterized as “mere logistical operators”—and that the policy’s design would create competitive risks and the possibility of speculation in the issuance of CBIOs; (3) that the legislative process suffered a deviation of purpose, allegedly oriented by private economic interests; and (4) the inefficiency, for the protection of an ecologically balanced environment, of a State intervention in the economic domain of a merely remuneratory nature, selectively benefiting biofuel producers and importers.
The Reporting Justice concluded that RenovaBio was conceived based on broad technical assessments involving government, industry, and society, and that the decision to assign to distributors the responsibility for acquiring CBIOs stems from objective criteria connected to their position in the fuel supply chain. Thus, the Reporting Justice understood that there is no violation (1) of the polluter-pays principle, since CBIOs are not equivalent to fines or indemnities applied to air polluters, and that “it is appropriate that end users, responsible for almost 60% of emissions, bear the burdens of the energy transition policy”; and (2) of the economic order and free competition, because the system contains two safeguards capable of preventing unreasonable quantities of CBIOs from being set for acquisition: (a) the link between targets and the distributor’s share of the total volume of fossil fuels sold in the previous year; and (b) the requirement that targets correspond to the availability of biofuels offered by certified producers or importers holding the Efficient Biofuel Production Certificate.
The Justice also mentioned that, given the goal of ensuring competitiveness for biofuels in the market, producers and importers cannot waive revenue, including that derived from the issuance and sale of CBIOs. Also, according to the Reporting Justice, the role of distributors does not mean that the cost of the policy falls exclusively on them, since the economic burden of decarbonization rests on “users of vehicles powered by fossil fuels, notably gasoline or diesel", and not on intermediary agents.
Finally, the STF ruled that there was no evidence of abuse in the law´s approval and that the Judiciary branch cannot interfere in matters relating to the merits of public policies adopted by the Legislative and Executive branches.
The President of Brazil, the National Agency of Petroleum, Natural Gas and Biofuels, the Ministry of Mines and Energy, the National Congress participated in the ADIs as interested parties, as well as various entities acting as amici curiae.
Sources:
https://www.conjur.com.br/wp-content/uploads/2025/11/voto-Kassio-RenovaBio.pdf
