Association vs. Brazil's Minister of Mines and Energy, over reduction and relaxation of decarbonization targets in RenovaBio

Location

DF Brasília Brazil

Status
Closed
Case file number
MS 27.093
Start date
November 18, 2020
Date of judgment or latest existing decision
On October 5, 2022, the Superior Court of Justice issued a final decision.
Summary

The Brazilian Association of Fuel Distributors (BRASILCOM) filed a Collective Security Mandate action against the Minister of Mines and Energy, in his capacity as President of the National Council for Energy Policy (CNPE).

Among the main arguments, the Association challenged the annual target for reducing Greenhouse Gas (GHG) emissions for the year 2020, established by CNPE Resolution 8/2020 and subsequently individualized for each company by ANP Office No. 797/2020.

These goals are part of the National Biofuels Policy – RenovaBio, established by Federal Law 13.576/2017 to incentivize the expansion of biofuels and meet the commitments of the Paris Agreement. To achieve this, fossil fuel distributors must acquire Decarbonization Credits (CBios) in the financial market.

BRASILCOM argued that the 2020 target was illegal and disproportionate, given that its update was published in September 2020 (due to the COVID-19 pandemic), leaving distributors just three months to acquire the necessary CBios before the December 31 deadline.

He further stated that the availability of CBios on the market would be insufficient and that the abrupt increase in demand would have generated an overvaluation of the price, putting the functioning of the distribution sector at risk and potentially causing a collapse in the national supply if the sanctions foreseen for non-compliance were applied.

The Minister of Mines and Energy argued that the Superior Court of Justice (STJ) lacked jurisdiction to hear the case, as the challenged resolution stemmed from an act of the President of the Republic, advised by a collegiate body (CNPE), which triggers the jurisdiction of the Supreme Federal Court (STF). He also maintained that there was no illegality or disproportionate nature of the target, that there were sufficient carbon credits (CBios) in the market, and that BRASILCOM was, in practice, seeking to encourage distributors to "pollute more," negatively impacting climate protection, public health, and the country's compliance with international commitments.

The STJ initially denied the preliminary measure and subsequently acknowledged its lack of jurisdiction to process security orders against acts of collegiate bodies presided over by a Minister of State (STJ Summary 177), in addition to the passive illegitimacy of the authority being sued. BRASILCOM filed an internal grievance, but it was unanimously rejected.

The process was definitively archived at the end of 2022.

Climate element

In the Collective Security Mandate , the BRASILCOM association focused its challenge not on questioning climate policy itself, but on the alleged illegality and disproportionate nature of the annual GHG emissions reduction target for 2020, implemented through the RenovaBio program. This program was created to expand the use of biofuels in the national energy mix and, above all, to ensure compliance with the climate commitments assumed by Brazil under the Paris Agreement.

Although BRASILCOM did not dispute RenovaBio's climate target, it argued that the late publication of the revised target (in September 2020) prevented distributors from acquiring the necessary Decarbonization Credits (CBios) before the end of the year, rendering the target materially unattainable. From this perspective, climate policy is being applied unreasonably, generating market distortions and disproportionate penalties with systemic effects on fuel supply. The petitioner's climate argument is therefore indirect: the timing of the targets prevents a real and efficient contribution to decarbonization objectives.

On the other hand, the defendant authority (Minister of Mines and Energy) invoked climate arguments centrally and explicitly to defend the legality of the target. It maintained that any judicial decision reducing or suspending the decarbonization targets would interfere with:

  1. In compliance with Brazil's international commitments, especially those derived from the Paris Agreement.

  2. In terms of environmental quality and public health, less regulatory pressure would allow for greater emissions from the fossil fuel sector.

  3. In the RenovaBio economic model, designed precisely to guide the transition towards a less carbon-intensive energy matrix.

The Minister also argued that BRASILCOM's claim amounted, in practice, to a "right to pollute more," incompatible with the protection of the climate, health, and the public interest.

Claimants
  • Brazilian Association of Fuel Distributors (BRASILCOM)
Defendants
  • Minister of Mines and Energy
Territorial context

In this Collective Security Mandate, there is no delimited territory nor specific local or traditional communities whose direct protection is the objective of the legal action. Unlike territorialized climate or environmental litigation, this case focuses exclusively on the regulatory dispute between the fossil fuel distribution sector and the Federal Government regarding the implementation of the RenovaBio program.

The object of the lawsuit is the national target for reducing greenhouse gas (GHG) emissions by 2020. Consequently, the impacts of the challenged act and the debated policy are national and systemic in scope, not limited to a specific territory.

The potentially affected communities, therefore, should be understood in a broad and diffuse sense, and include:

  • The Brazilian population in general, given that reducing emissions contributes to improving air quality, reducing climate risks and fulfilling international environmental commitments.

  • Consumers and economic agents of the fuel supply system, mentioned by BRASILCOM when alleging risk of market collapse in case of non-compliance with the goals.

  • Sectors dependent on biofuels, benefiting from the incentive for Decarbonization Credits (CBios).

However, no document from the process indicates the presence of indigenous peoples, traditional communities, preservation areas or specific territories directly affected.

Rules and principles invoked

International agreements/treaties

  • Paris Agreement

National laws

  • Federal Constitution of Brazil (CF/1988)
  • Law 13,576/2017 – National Biofuel Policy (RenovaBio)
  • Law 9.847/1999 — Oversight of supply activities
  • Law 12.651/2012 (Forestry Code)
  • CNPE Resolution No. 8/2020
  • ANP Dispatch No. 797/2020
  • RenovaBio Instruments

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Instance
Judicial
Actor type
Other
Topic
Acuerdo de París y compromisos climáticos
Fossil fuels
Defendant type
State
Interim measures
Denied or rejected
Grounds for claim
Paris Agreement and climate commitments
National legislation
Regional or international treaties