Brazil’s Superior Court of Justice ruling preserves RenovaBio rules, reinforces legal certainty for fuel sector

The decision by Brazil’s Superior Court of Justice Feb. 3 to suspend preliminary injunctions that allowed the replacement of the mandatory purchase of decarbonization credits (CBios) with judicial deposits represents a milestone for strengthening RenovaBio, Brazil’s Ministry of Mines and Energy announced Feb. 5.

RenovaBio is Brazil’s national biofuels policy to reduce greenhouse-gas emissions in the transportation sector.

In 2024, two political parties in Brazil sued the federal government over the constitutionality of the RenovaBio program, arguing that mandatory carbon-reduction targets for fossil-fuel distributors were unfair and discriminatory.

The court’s decision, according to MME, reaffirms the legal security of the program, preserves its regulatory coherence and ensures the uniform application of decarbonization targets in the fuel sector.

In granting the federal government’s request in suspension of preliminary injunction, the Superior Court of Justice recognized that judicial interference in highly technical rules constitutes serious harm to public order and the economy, MME stated.

According to the decision, authorizing alternative solutions to those provided for by law weakens the regulatory core of RenovaBio and compromises the predictability necessary for the functioning of the CBio market.

The court also highlighted that the Supreme Federal Court has already declared the constitutionality of RenovaBio by dismissing direct actions of unconstitutionality (ADIs) 7596 and 7617, fully validating Law No. 13.576/2017.

The preliminary injunctions, now suspended, allowed defaulting distributors to unilaterally calculate deposits in lieu of mandatory targets, generating competitive imbalances and preventing the equitable application of the public policy.

In practice, the decision reestablishes the uniform application of RenovaBio rules, ensuring that the targets are met exclusively through the acquisition of CBios, as provided by law.

Following this decision, MME said it expects the market to resume operating promptly without judicial exceptions, strengthening the technical authority of MME, the National Council for Energy Policy (CNPE) and the National Agency of Petroleum, Natural Gas and Biofuels (ANP), as well as reinforcing regulatory predictability and aligning the program with the objectives of decarbonizing the Brazilian transportation matrix.