Case Name: Biostratum Distribuidora de Combustíveis S.A. vs. União Federal (Acquisition of CBios)

Summary

This is an action filed as an Ordinary Action (ProcedCom), with a request for preliminary injunction, by Biostratum Distribuidora de Combustíveis SA against the Federal Government, aiming to overturn the mandatory target for the acquisition of Decarbonization Credits (CBios) imposed on it, equivalent to 9,959 CBios at the time the action was filed. CBios were established by the National Biofuels Policy (Federal Law 13.576/2017) – known as RenovaBio – which, in turn, was enacted because Brazil is a signatory to the Paris Agreement. RenovaBio, among other objectives, aims to contribute to the fulfillment of the commitments assumed by the country under the Paris Agreement, promote the expansion of biofuels in the energy matrix, and reduce greenhouse gas (GHG) emissions in the production, marketing, and use of biofuels. To this end, it provides for the establishment of annual national decarbonization targets for the fuel sector, which are individualized each year for fuel distributors and met by companies through the acquisition of CBios (Carbon Credits), under penalty of sanctions provided for by law. The annual targets are defined by the National Council for Energy Policy (CNPE) and individualized by the National Agency of Petroleum, Natural Gas and Biofuels (ANP). The plaintiff company argues that the obligation to acquire CBios constitutes the imposition of a new tax, with the Decarbonization Credit being a residual tax, as it is not provided for in the Federal Constitution and fulfills the requirements of the National Tax Code (Federal Law 5.172/1966). It argues that, for the establishment of such a tax, the Federal Constitution requires the enactment of a Complementary Law and that the tax be non-cumulative, which does not occur in the case of CBios, implying a formal defect in its establishment. The author further argues that, as a fuel distributor, it is not responsible for the emission of polluting gases, but only for the commercialization of fossil fuels, making it logical that the fuel producer should be the recipient of the mandatory acquisition of CBios. It also states that fuel distribution is a relatively low-polluting activity. It requests, as a preliminary measure, the suspension of its CBio acquisition target. As a final measure, it requests confirmation of the injunction and recognition of the unconstitutionality of the legislation that mandates the company's compulsory CBio acquisition target.

The preliminary injunction was denied, based primarily on the grounds that (i) the constitutional principles for environmental protection set forth in the Federal Constitution make it mandatory to reduce the environmental impact of human conduct, whether in the production or distribution of fossil fuels; (ii) the establishment of CBio acquisition targets does not constitute the creation of a tax rule, but rather an environmental administrative rule, based on constitutional and international dictates for the reduction of environmental pollution, whose deleterious effects are felt worldwide, such as increased heat and decreased rainfall; (iii) the argument that the distribution company does not pollute is not credible. Since no tax-related matter was recognized in the lawsuit, the action was ordered to be redistributed to the federal court with jurisdiction in administrative matters.

In its defense, the Federal Government argues, among other points: (i) that the creation of CBios is in line with environmental regulations, functioning as a form of incentive for social actors to preserve nature, with the creation of compensatory measures being indispensable for reducing GHG emissions and for the effectiveness of RenovaBio; (ii) that CBios are based on the idea of converting the environmental costs of using fossil fuels into revenue for biofuel producers, offering efficiency incentives for their sustainable growth; (iii) that Decarbonization Credits provide for the valuation of externalities present in the fuel market, generating a competitive balance between fossil and renewable fuels; (iv) that CBios are a market solution without altering taxes; (v) the absence of delay in the publication of annual targets; (vi) that there was sufficient time for the acquisition of CBios and their full availability in the market; (vii) the non-existence of a tax legal relationship, especially since it concerns an obligation to reduce GHG emissions through the acquisition of CBios offered by other private parties, with no pecuniary relationship between the Public Administration and the distributor; and (viii) the impossibility of distributors deviating from the mandatory annual decarbonization target and the acquisition of CBios.

In the judgment, the requests were dismissed, based on the same grounds as the decision that denied the request for preliminary injunction sought in the initial petition, thus confirming it. The plaintiff appealed the decision, arguing, in addition to the arguments presented in the initial petition, that imposing the purchase of CBios on fuel distributors harms economic activity, violating the principle of Free Enterprise. The Federal Government filed counter-arguments to the appeal, requesting the upholding of the judgment, in the same terms presented in its defense.

The appeal was dismissed. The court argued that RenovaBio is an instrument that gives effect to the provisions of Article 225 of the Federal Constitution and that it does not have the nature of a tax. The policy establishes an obligation to act, consisting of reducing carbon emissions by fuel distributors, which only becomes a monetary obligation when not fulfilled.

In response to this judgment, a Special Appeal was filed, which was dismissed as inadmissible; consequently, an Interlocutory Appeal in a Special Appeal was filed, but the Superior Court of Justice (STJ) declined to hear it.

The defendant filed an Extraordinary Appeal with an interlocutory appeal to the Federal Supreme Court (STF), which denied the appeal. In response to that decision, the defendant filed a procedural appeal. The Panel unanimously dismissed the appeal. On the merits, the Court emphasized that, in its rulings on ADIs 7,596 and 7,617, the STF affirmed the constitutionality of the mandatory decarbonization targets imposed by RenovaBio on fossil fuel distributors, thereby consolidating a position contrary to the appellant’s argument. The judgment became final on May 7, 2026.

 

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Main norms mobilized

• Article 170 of the Federal Constitution (CRFB/88)
• Article 225 of the Federal Constitution (CRFB/88)
• 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