Case Name: ADI 7617 (RenovaBio)

Summary

This is a Direct Action of Unconstitutionality (ADI) filed by the Democratic Labor Party (PDT) arguing the unconstitutionality of articles 4, item I, 5, items V, VII, XI and XIII, 6, 7, caput and § 2, and 13, caput and § 1, of Federal Law 13.576/2017 - National Biofuels Policy (RenovaBio). The aim is to deregulate the carbon market established by the policy. The party alleges a formal flaw in the legislative process, consisting of a deviation from the intended purpose in the bill's processing, favoring private interests to the detriment of environmental protection. From a substantive standpoint, it is argued that the Law violates constitutional norms related to an ecologically balanced environment, the social function of property, the prohibition of deficient protection, and free enterprise. It is argued that, in a biased way, the purpose of the Law is to offer financial assistance to the biofuels sector, and not to environmental protection. This is because RenovaBio does not fulfill the objective of contributing to the reduction of greenhouse gas (GHG) emissions, given the lack of additionality of Decarbonization Credits (CBIOs) – that is, there would be no effective and measurable reduction in GHG emissions or removal of CO2 as established by the Law to actually mitigate climate change. The party suggests that RenovaBio represents state intervention in the economic domain, selectively benefiting manufacturers and importers without any counterpart in environmental protection, camouflaging socio-environmentally harmful practices under the pretext of fulfilling international commitments of the Paris Agreement. Furthermore, the Law confers on distributors the responsibility for the decarbonization of the entire fossil fuel chain, despite representing only a fraction of the agents that compose it, creating unequal treatment. A declaration of formal and material unconstitutionality is requested for Federal Law 13.576/2017, with a pronouncement of partial nullity without reduction of text, of articles 4, item I; 5, items XXIII, V, VII, XI and XIII; 6; 7, heading and § 2; and 13, heading and § 1, giving them an interpretation in accordance with the Constitution.

The plaintiff party requested the dismissal of the action, but it was not dismissed due to the principle of non-disposability that governs actions of concentrated constitutional review.The Court, unanimously, jointly considered ADIs 7.596 and 7.617, ruling the requests inadmissible and confirming the presumption of constitutionality of the challenged legal provisions, in accordance with the rapporteur's vote. The rapporteur minister argued that RenovaBio fulfills international commitments to mitigate GHG emissions assumed by Brazil in the Paris Agreement, and that imposing decarbonization targets on fossil fuel distributors does not violate the principle of equality, since the differentiation criterion – the commercialization of fossil fuels – is objective and directly linked to the purpose of the rule. He further justified that the polluter-pays principle is observed insofar as the burden of environmental policy falls on consumers who opt for fossil fuels. It concluded that there is no offense to the principles of free enterprise and free competition, since the program establishes uniform rules for all distributors of fossil fuels, and that there is no disproportionality or confiscation in the sanctions foreseen for producers and importers of biofuels who fail to meet the targets established within the scope of the policy.

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Main norms mobilized

• Article 170 of the Federal Constitution (CRFB/88)
• Article 225 of the Federal Constitution (CRFB/88)
• Article 5th of the Federal Constitution (CRFB/88)
• National Biofuels Policy Act - RenovaBio (Federal Law 13.576/2017)
• Paris Agreement (Federal Decree 9.073/2017)

Case timeline

Case documents