The Ministry of Mines and Energy sent for approval by the Federal Revenue a Provisional Measure that provides for progressive taxation in the commercialization of decarbonization credits (Cbios) of the Renovabio program. To Broadcast Agro, the lawyer and professor of Financial Law at the University of São Paulo (USP), Heleno Torres, who assisted in the preparation of the proposal, said that the idea is to start with a rate of 5% in 2021, to move to 10% in 2022, to then reach 15% from 2023. "Taxation would gradually increase, which, together with the growth of the goals, will guarantee the collection", he said.

In the professor's assessment, progressive taxation aims to stimulate the commercialization of the Cbios, and should not be interpreted as a tax benefit. "It is a new taxation because we are talking about a completely new asset. There are no previous parameters that measure whether these taxes would be obtained or not, so it does not constitute any type of tax benefit," said Torres. He recalled that the collection will only begin in 2021.

Taxation for the issuer, that is, biofuel producers, will only occur when the security is sold at B3. In the case of intermediary negotiations, taxation will apply to the capital gain that agent will have between the purchase of the asset and the resale. Another point foreseen in the MP is that it clarifies that the cost with the acquisition of Cbios by the distributors will be subject to deduction in the income tax.

The subject of taxation is considered a pending issue by the sugar-energy sector since Article 60 of Provisional Measure No. 897/2019, known as the Agro MP, was vetoed by President Jair Bolsonaro in April. The article proposed a 15% tax on Cbio, but with the veto, a charge that includes the Social Contribution on Net Income (CSLL) would come into effect and reach 34%. For Torres, Bolsonaro's veto, although questioned by many market participants, was consistent, "since the proposal did not make it clear on what basis the tax would apply".

The Provisional Measure aims to further clarify the classification of decarbonisation credits as environmental assets or "means of payment", which are backed by an Energy-Environmental Efficiency Note (SEN). For Torres, this definition is important because it differentiates Cbio from financial securities or securities. In addition, it highlights the fact that Cbio can be sold by other market participants and even by foreigners, not being limited to negotiations by fuel issuers and distributors.

"Now Cbio has a new face, with greater potential for circularity in the market, including in the international space", he reinforced. In practice, the asset will only be retired when the distributor acquires it and uses it to offset its annual goals. In the meantime, commercialization occurs with the denotation of an environmental currency.