Going Against Brazil's International Commitments, Federal Senate Creates Program to Stimulate Coal Use

Two months after the speedy ratification of the Paris Agreement, last Wednesday (19th) the Brazilian Senate moved exactly on the opposite direction and passed a bill that provides the "modernization of the coal power park", stimulating the building of new coal-fired power stations from 2023 and assuring a captive market for the remarkably low-quality Brazilian coal.

The coal stimulus program was outlined in one specific article of an Executive Act (Medida Provisoria), which was converted into law by the Congress. The act was originally meant to regulate privatizations in the electricity sector, but the coal lobby, strong in the Southern states, has managed to smuggle the pro-coal Article into the branching text.

More than 60 Brazilian NGOs are asking for a presidential veto to the bill. After the approval on the Senate, President Michel Temer has 15 days to approve or reject the new legislation. In case of a veto, the Congress has 30 days to deliberate on it.

During the plenary session, only three senators raised their voices against the measure: the Government leader Aloysio Nunes and two members of the opposition, Joao Capiberibe and Randolfe Rodrigues. The latter two emphasised that the incentive to new coal goes against the Brazilian commitments to the Paris Agreement.

"This article goes against everything Brazil has done to limit CO2 emissions, and puts Brazil in the opposite direction from where the rest of the world is heading. While China, the world's biggest emitter, has been taking measures to reduce the use of coal, in Brazil today we created a program to build more coal power plants", said Rodrigues.

On Thursday, representatives of the Parliamentary Front in Defense of the Coal and the Brazilian Association of Coal attended en masse the Senate session.

"By ratifying the Paris Agreement, the Brazilian government has committed to reduce the country's emissions of greenhouse gases, so it should be signaling a paradigm shift in its development model. Brazil has all the conditions to eliminate our dependency on fossil fuels. We should be heading to a complete restructure of the energy matrix, redirecting investments to projects that promote the efficient use of energy and the expansion of renewable sources such as wind, solar and biomass, accelerating the transition to a low carbon economy with free, just and sustainable energy sources", reinforces Nicole Figueiredo de Oliveira, Director of 350.org Brazil and Latin America.

Carlos Rittl, executive secretary of the Climate Observatory network, which includes more than 40 organizations, emphasises the fact that the approval of this proposal by the Congress is a negative sign for the credibility of Brazil in the climate negotiations.

"The same Parliament that did the right thing by ratifying the Paris Agreement in record time now creates a huge embarrassment for the government on the climate conference in Marrakesh", said Rittl. "Legislators who approved this program seem to live in a parallel reality, stimulating a power of the 19th century in the country that has more advantages in adopting energy of the 21st century."

Coal power has been traditionally minor in Brazil's energy mix. Today it accounts for only 6% of the energy produced, but it makes up for 14% of all emissions from burning of fossil fuels. Since 2014, however, coal has been making a comeback, seizing on the government's anguish about energy security after a series of long droughts that depleted hydroelectric reservoirs - and on a strong lobby in Congress. In 2014, new coal energy was auctioned for the first time in years, and this year a new 600-megawatt plant passed through the first phase of the environmental licensing process.

The recession has also participated on changing the outlook for coal, as it has reduced Brazil's need for energy and the money available for building new plants. Earlier this month, Brazil's giant development bank, BNDES, said it would no longer subsidize new coal - shifting funds to solar instead.