Brazil Launches Mobility Program With $4 Billion in Incentives

The Brazilian government has published a provisional measure establishing new guidelines for the local automotive sector, including fleet sustainability requirements and incentives for the production of new technologies.

Author of the article:

Bloomberg News

Leonardo Lara

Published Dec 31, 2023 • 1 minute read

Customers wait in line to refuel vehicles at an Ipiranga gas station in Sao Paulo, Brazil, on Thursday, March 10, 2022. The war between Russia and Ukraine has changed the dynamics of the international fuel market. The shortage of supply has thrown small importers in Brazil off track, and large companies are also feeling the decline in product supply, especially in the diesel oil segment, the Rio Times reports. Photo by Victor Moriyama /Bloomberg

(Bloomberg) — The Brazilian government has published a provisional measure establishing new guidelines for the local automotive sector, including fleet sustainability requirements and incentives for the production of new technologies.

Called “Mover”, the national Green Mobility and Innovation program replaces the old Rota 2030 program, which expires Sunday. The program will promote the expansion of investments in energy efficiency, include minimum recycling limits in vehicle manufacturing and charge less tax to those who pollute less, creating the Green IPI ttax, according to a statement on Saturday from the Development, Industry, Commerce and Services Ministry.

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The tax incentive for companies to invest in decarbonization and comply with the program’s mandatory requirements will be 3.5 billion reais in 2024, 3.8 billion reais in 2025, 3.9 billion reais in 2026, 4 billion reais in 2027 and 4.1 billion reais in 2028, amounts that must be converted into financial credits. The program will ultimately reach more than 19 billion reais ($3.9 billion) in credits granted, the statement said. The average annual incentive in the Rota 2030 program was 1.7 billion reais until 2022.

Read more: Brazil’s Beloved Sugar-Cane Cars Are Slowing EV Adoption

The new program also increases the mandatory sustainability requirements for vehicles sold in the country, including the measurement of carbon emissions “from well to wheel.” In the case of ethanol biofuel, for example, emissions will be measured from the planting of sugarcane to the burning of the fuel, the statement said.

In the medium term, the new program foresees an even broader measurement, known as “from cradle to grave”, which will be valid from 2027 and will cover the carbon footprint of all components and all stages of production, use and disposal of the vehicle, it said.

President Luiz Inacio Lula da Silva, also signed a bill that provides incentives for the modernization of the country’s industrial park to stimulate economic sectors to invest in new machines, equipment, devices and instruments.

Text will be sent to the National Congress and initially foresees 3.4 billion reais for the program.

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