Brazil’s Recycling Incentive Law: Ministry of Environment and Climate Change Publishes Related Ordinance
Ordinance GM/MMA No. 1,250/2024 has been enacted by the Brazilian Ministry of Environment and Climate Change to regulate the presentation, analysis, approval monitoring, accountability and evaluation of proposal and projects resulting from the Incentive Mechanism for the Recycling Industry and Production Chain. The Ordinance establishes that proposals shall be aligned with at least one of the goals set forth in Article 3 of Law No. 14,260/2021 (the Law of Incentives for the Recycling Industry) and regulated by Federal Decree No. 12,106/2024. (See our Legal Update “Brazil Publishes Federal Decree Regulating Recycling Incentive Law.”)
The Incentive
The Law of Incentives for the Recycling Industry provides for tax deductions on amounts allocated to directly support recycling projects, up to 6% of income tax for individuals and up to 1% for legal entities in each quarterly or annual assessment period.
Eligible Participants
As provided for in the ordinance, proposals may be submitted by:
(i) enterprises of recyclable material collectors
(ii) educational, research, science, and technology institutions
(iii) building condominium associations
(iv) non-profits serving public interests (Oscips)
(v) non-governmental organizations (OSCs)
(vi) public agencies and consortia, autonomous agencies, public foundations, and similar entities
(vii) microenterprises and small businesses
In addition, whenever possible, projects must involve enterprises of recyclable material collectors or self-employed collectors in their execution.
Information Required in the Proposal
The proposals are required to include information such as the purpose, problem(s) to be solved, relationship with the incentive program's objectives and guidelines, target audience, expected results, goals, and schedule.
Project Value
The minimum value for a proposal is R$50,000, and the maximum is R$8 million.
Proposal Submission
Proposals must be submitted to the Ministry of Environment and Climate Change by means of the Partnership Management System (Transferegov).
Project Term
Once approved, the execution of the proposed project will be authorized by means of an Execution Authorization Term, which has a maximum term of three years.
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The Environmental, Climate Change and ESG Practice of Tauil & Chequer Advogados, in association with Mayer Brown, is available for additional information on this topic.
