On Wednesday, January 22, President Luiz Inácio Lula da Silva signed Bill 327/2021 into law — establishing the Energy Transition Acceleration Program [Programa de Aceleração da Transição Energética/PATEN]. The text was published in the Federal Official Gazette on Thursday, January 23rd. The new law transforms the country's energy landscape, promoting sustainability and efficiency in energy use. The signature marks a milestone toward a more sustainable future aligned with global carbon emission reduction targets, while also reaffirming the government's commitment to technological innovation.

The PATEN reaffirms our country's commitment to global leadership in energy transition, bringing innovation and streamlining access to financing for low-carbon energy projects"

Alexandre Silveira, minister of Mines and Energy

The program aims to encourage the green economy and create jobs. Its main objectives include promoting the financing of sustainable development projects, connecting financing institutions with companies interested in sustainable initiatives, leveraging corporate credits as a financing tool, encouraging the generation and efficient use of low-carbon energy, and fostering energy transition activities in coal-mining regions.

''The PATEN reaffirms our country's commitment to global leadership in the energy transition, bringing innovation and streamlining access to financing for low-carbon energy projects," said Minister of Mines and Energy Alexandre Silveira, Brazil's representative at the World Economic Forum in Davos, Switzerland. The ministry will coordinate the alignment of the program's projects.

RESOURCES — The program provides access to credit for companies that have funds receivable from the Federal Government, such as writs of payment and tax credits, to finance projects linked to the energy transition. The Guarantee Fund for Sustainable Development [Fundo de Garantias para o Desenvolvimento Sustentável/Fundo Verde], created by the law and administered by the National Bank for Economic and Social Development [Banco Nacional de Desenvolvimento Econômico e Social /BNDES], will be the basis for this financing, providing resources for low-carbon initiatives without the need for real guarantees, reducing costs for entrepreneurs.

AREAS — PATEN's priority sectors include: the development of technologies and the production of low-emission fuels; the expansion and modernization of renewable energy generation and transmission; the replacement of high-emission energy sources with clean ones; the development of waste recovery and energy valorization projects; technical training and research into renewable energy; the development of the production and distribution of natural gas and nitrogen fertilizers; and the decarbonization of the transport matrix.

VETOS —  Based on analyses by the relevant ministries, President Lula decided to veto article 17 of the Bill, due to the lack of an estimate of the budgetary and financial impact, and article 18, in the part that amends the head of article 5-B of Law 9.991/2000, with the aim of making it impossible to reduce investments in energy efficiency projects. He also chose to veto article 20, in order to ensure that resources from the National Climate Change Fund [Fundo Nacional sobre Mudança do Clima] are only earmarked for investments that are in line with the National Climate Change Policy [Política Nacional sobre Mudança do Clima] and Brazil's greenhouse gas emission reduction targets.