complaint

ADI 7596 (RenovaBio and Unlawful Interference in Economic Activity) - complaint

Litigation

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Sabin Litigation

Filing Year For Action

On February 5, 2024, the Democratic Renewal Party (PRD) filed a Direct Action of Unconstitutionality (ADI) with a preliminary injunction request. The action is seeking for a declaration of unconstitutionality of Articles 4(I), 6, 7, 9, and 10 of Law No. 13,576/2017, which regulates the National Biofuels Policy (RenovaBio) and other provisions. By extension, it seeks a declaration of unconstitutionality of Articles 1 to 8 and 12(IV to VII) of Decree No. 9,888/2019, all articles of National Agency of Petroleum, Natural Gas, and Biofuels (ANP) Resolution No. 791/2019, and Articles 6(II to VII), 8(II), 11(§3), and 13 of Normative Ordinance No. 56/GM/MME/2022, which violate the norms outlined in the Federal Constitution, the principles of reasonableness and proportionality, as well as articles of the Paris Agreement, an international human rights treaty with supra legal force. 

The violation allegedly arises from the discrimination against fossil fuel distributors, as they are the only ones required by the contested norms, individually and under penalty of fines, to purchase CBios (financial obligations) to fulfill the formal duty of proving compliance with the annual mandatory target for reducing greenhouse gas (GHG) emissions. This is alleged to create discrimination among agents, violating the polluter-pays principle, the principle of equality, environmental protection, economic order, and consumer protection. This stems from holding only fossil fuel distributors responsible for decarbonizing the entire fossil fuel chain, despite other agents in the chain also emitting, thereby affirming the inefficacy of the program’s model. It is argued that the current RenovaBio model has created an inefficient and asymmetric public policy with severe negative environmental, social, and economic impacts, such as increased fuel prices, inflation, and GHG emissions—resulting from the undisputed increase in fossil fuel consumption—that produce outcomes contrary to the commitments made under the Paris Agreement and in conflict with constitutional principles. 

As an interim relief, the suspension of the effectiveness of the contested provisions was sought until the action is adjudicated. On the merits, a declaration of unconstitutionality of the contested provisions is requested, with erga omnes effect and retroactive effect (ex tunc), or alternatively, that these normative acts be interpreted in accordance with the Constitution, provided that: (i) the annual and individual mandatory targets are assigned to all agents in the fossil fuel chain, in proportion to their GHG emissions; (ii) the supply of CBios is proportional to the mandatory demand, with penalties for non-compliance with the annual and individual targets prohibited in cases where CBios are unavailable on the market; (iii) an annual and individual mandatory target is established for the production or importation of biofuels; (iv) a transparency system is established to verify the reinvestment in biofuel production from the revenue obtained; and (v) standards of reasonableness and proportionality are met in setting and applying the fines for non-compliance with individual targets, and the provision for suspension of the obligated party’s activities as a sanction for non-compliance with individual targets through the sale of CBios is excluded. 

ADI 7596 (RenovaBio and Unlawful Interference in Economic Activity)

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

This sector involves the wholesale and retail selling of goods.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

People with different national or cultural traditions from the dominant population

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

A company that is owned wholly or partially by the state, typically operating in key sectors.

Jobs that contribute to preserving or restoring the environment. We include jobs which require a high amount of green skills or which spend much of their time on green activities, as well as jobs transforming polluting industries.

Codes and standards are regulatory instruments that specify minimum standards to protect health and safety. This ranges from performance standards, which prescribe outcomes while allowing flexibility to achieve compliance, to the more prescriptive approach of technology-specific standards.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

This sector involves activities to move goods and people, alongside the storage of products.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

ADI 7596 (RenovaBio and Unlawful Interference in Economic Activity) - complaint

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance