Hogan Lovell OffshoreBook 2023 230809 OnlinePDF - Flipbook - Page 29
Offshore Wind Worldwide 2023
Offshore Wind Potential: Brazil has significant offshore wind potential, especially
along its northeastern coast, where the
winds are strong and consistent. This makes
the country attractive to investors looking
to harness this abundant natural resource
and produce clean and renewable energy.
Tax Incentives: Tax incentives have played
a crucial role in promoting the offshore
wind sector. These incentives include (i) an
exemption from federal taxes based on the
turnover of companies (Program of Social
Integration, or "PIS" and Contribution for
the Financing of Social Security or "Cofins"
under a special regime for infrastructure development),12 (ii) an exemption from federal
tax (IPI or "Industrialized Products Tax") on
equipment and components acquired abroad used in turbines,13 (iii) an exemption from
tax on Circulation of Goods and Services
(ICMS),14 and (iv) a reduction of Import Tax
for energy generation related goods.15
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3. PUBLIC LAW AND
REGULATORY PERMITS
3.1 Spatial planning at sea
Governmental auctions or selection
processes provide successful bidders with
an exclusive right to construct, own, and
operate an offshore wind project, as well as
to receive feed-in revenues, which refers to
income generated by renewable energy projects through the implementation of feed-in
tariffs.16 The Brazilian government organizes
competitive auctions with respect to specific sites for offshore wind development. The
installation and operation of offshore wind
farms requires exclusive use of the location
in question, meaning that any other businesses or individuals will not be provided access
rights. There are two distinct procedures to
obtain the necessary assignment of rights
regarding a particular location:
(a) planned assignment, where the MME
offers predefined water columns17 to
interested parties through bidding; and
12 As established by Law No. 11,488/2007, Decree 6,144/2007, and Federal Revenue Service Normative Instruction No. 758/2007.
13 As established by Law No. 13,097/2015.
14 The Agreement 109/2014, as amended by Agreement 203/2019, both published by the National Council of Fiscal Policy (CONFAZ), authorizes certain
federative units to grant deferment of ICMS due on transactions involving machinery, equipment, and materials intended for the capture, generation, and
transmission of solar or wind energy, as well as the generation of energy from biogas, incorporated into the fixed assets of generating establishments.
15 As established by Resolution 125/16 of the Foreign Commerce Change (CAMEX). See also: https://www.gov.br/economia/pt-br/assuntos/noticias/2021/novembro/gecex-reduz-imposto-de-importacao-para-ampliar-producao-de-energia-limpa-no-pais (in Portuguese only).
16 Feed-in tariffs involve the government or regulatory authorities setting a fixed payment rate for renewable energy producers for each unit of electricity they generate. This rate is typically higher than the market price and ensures a steady and guaranteed revenue stream for the project.
17 7 Water columns are vertical spaces from the surface of the water to the bottom of the sea or ocean, where offshore wind farms are developed. The
term is referred by Brazilian legislation as prisma eólico (free translated by "prism"). According to Bill No. 484/2017, approved by the Brazilian Federal
Senate and currently being considered in the Chamber of Deputies, the water columns refer to a specific area in Brazil’s inland waters, territorial sea, or
exclusive economic zone. This area is characterized by a vertical prism that extends from the seabed to the water’s surface, delimited by geographic coordinates. Within these prisms, electricity generation from wind sources will take place. The Bill states that the National Energy Policy will define these areas,
and they must be included in public asset concession contracts.
