On May 3, 2024, Brazil’s Federal Law No. 14,850/2024 (the “Regulation”) was passed by the President establishing the National Policy on Air Quality. The Regulation provides for the creation of a unified air quality monitoring system across the entire Brazilian territory, which will be responsible for data collection and dissemination of information to the public. It will impose maximum limits on polluting emissions from stationary and mobile sources, such as industries and vehicles.

In short, the Regulation aims to establish guidelines and measures to ensure the preservation and improvement of air quality in Brazil, with the goal of protecting the health of the populace and environment.

To this end, the Regulation includes numerous provisions, including:

• the creation of the National Air Quality Information System;
• the implementation of tax benefits for companies that adopt cleaner, more sustainable practices and technology in their production processes;
• the implementation of initiatives aiming to educate and raise awareness of the importance of air quality and the harmful effects of atmospheric pollution on human health; and
• the creation of a national fund to mitigate air pollution, to be funded from fines and penalties applied to companies that violate the standards established by environmental policy.

Presidential vetoes removed legal provisions from the Regulation that referred to: (i) the ability of states and municipalities to supplement the law with local legislation, which could create conflicts of public interest due to the potential for clashing activities or enterprises developed in different regions (which would violate air quality standards established by the National Environmental Council); (ii) the drafting of an inventory of atmospheric emissions, through the Legislative Branch in the Heads of the Executive Branches of the Union, the Federal District, and the States; and (iii) the ability of the Executive Branch to issue regulations, as this is an administrative activity and represents an act of management and political choice to satisfy collective essential needs, underlining that execution of concrete management acts is exclusive to the Executive Branch.

In response to the presidential vetoes, the National Congress will deliberate on how to proceed, whether maintaining or overturning the vetoes.

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The Environmental, Climate Change and ESG Practice of Tauil & Chequer Advogados, associated with Mayer Brown, is available for additional clarification on the topic.

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