On May 18, 2026, the Federation of Industries of the State of Ceará (FIEC) and the Union of Energy and Services Industries of the Electric Sector of the State of Ceará (SINDENERGIA) filed a Public Civil Action (ACP) with a request for urgent relief, against the Federal Government, the National Electric Energy Agency (ANEEL), the Energy Research Company (EPE), and the National System Operator (ONS). Plaintiffs allege that the Capacity Reserve Auction (LRCAP) 2026 compromises competitiveness and economic rationality, shows signs of methodological inconsistencies, may impact the tariff formation of the electricity sector, and is inconsistent with environmental protection and sustainable development, thus violating the international climate commitments assumed by Brazil. With the estimated cost of contracting through LRCAP being over R$ 500 billion, in addition to an increase in consumer tariffs in general, significant effects on the industrial sector are anticipated. Plaintiffs argue that the energy sector should evaluate more efficient, competitive, and sustainable technologies, considering solutions already discussed in the international market. 

Plaintiffs claim that the demand does not intend to replace technical and administrative merit, but to verify the legal, procedural, regulatory, and competitive compliance of the administrative acts carried out within the scope of LRCAP 2026. This attention should be paid given the long duration of the contracts signed, the potential billion-dollar tariff impacts, and the systemic relevance of the electricity sector to the national economy. FIEC and SINDENERGIA argue that the adopted model is questionable regarding the technological neutrality and environmental compatibility of the promoted expansion, since the auctions are prioritizing the contracting of fossil fuel thermoelectric sources, such as coal, to the detriment of more efficient and sustainable alternatives. They argue that the auction threatens the environmental protection foreseen in Article 225 of the Federal Constitution and in the National Policy on Climate Change, which establishes the inclusion of the climate agenda in national energy policies. An urgent injunction is requested to suspend the acts of approval, awarding, and formalization of the Capacity Reserve Power Contracts arising from LRCAP 2026 or, alternatively, to suspend the effects of acts related to thermoelectric products. On the merits, a declaration of nullity is requested for the administrative and regulatory acts related to LRCAPs 2026.

In its preliminary ruling, the 1st Federal Court of  Ceará found Plaintiff's arguments as involving significant amounts that could compromise the financial stability of companies and families and the clean energy matrix for national energy production, and granted the request for urgent relief to immediately suspend the approval of the results of the LRCAPs 2026 and the signing of the respective contracts. Additionally, it recognized the connection with Public Civil Action No. 1048511-21.2026.4.01.3400 and transferred jurisdiction to the 6th Court of the Federal District, which heard the related lawsuit. 

The 6th Court of the Federal District dismissed the preliminary injunction request and declared the previous provisional decision null and void.

FIEC and SINDENERGIA vs. União Federal and others (Irregularities in Energy Capacity Reserve Auctions)

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FIEC and SINDENERGIA vs. União Federal and others (Irregularities in Energy Capacity Reserve Auctions) - complaint

Filed

Brazil

Ceará

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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.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

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

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

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

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

Actions to reduce emissions in energy generation and supply.

Technologies that capture and hold energy in reserve for later use.

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

Electrical energy generated from mechanical devices driven by flowing fresh water.

Production of electricity and heat from solar irradiation.

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.

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.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

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.

The activities of industries that transforms raw materials into finished goods through industrial processes.

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

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

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

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Climate change impacts our society by disrupting the natural, economic and social systems we depend on. Physical hazards and underlying vulnerabilities can lead to increased resource competition for food and water, which can heighten the risk of conflict.

FIEC and SINDENERGIA vs. União Federal and others (Irregularities in Energy Capacity Reserve Auctions) - complaint

Policy instrument

Risk

Just transition

Renewable energy

Fossil fuel

Economic sector

Finance