Offshore electricity: Project with incentive for COAL in Brazil could cost R$595 billion and increase electricity bills by 11%

Approved by the Senate, the project that promises to regulate offshore energy includes incentives for coal, one of the most polluting fuels, and could generate tax breaks of up to R$1 trillion, directly impacting consumers and the energy transition in Brazil.

Brazil has taken an important step in regulating offshore electricity, but not without generating controversy. The Regulatory Framework for Offshore Energy Exploration, recently approved by the Senate, includes measures to expand renewable energy generation. However, the inclusion of incentives for coal, one of the most polluting fossil fuels, has caused discomfort among experts and lawmakers.

With an estimated cost of R$595 billion in tax breaks by 2050, this decision calls into question Brazil's commitment to the energy transition. After all, we are looking to the future or insisting on outdated practices?

The offshore energy regulatory framework

Offshore electricity refers to the generation of energy from sources such as wind and solar on the high seas. This technology is promising for countries with vast coastlines, such as Brazil, which has one of the largest renewable energy matrices in the world.

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Coal incentive: A step back in the energy transition

The tax waiver is not a direct investment, but represents a loss of revenue for the government by granting tax benefits to companies operating in the coal and natural gas sector. In other words, the government gives up collecting these amounts in taxes to favor these activities. In practice, this means that money that could be used in other areas, such as health, education or infrastructure, will be indirectly used to support the operation of thermoelectric plants, making the final cost higher for the public coffers and, possibly, for consumers. — The tax waiver is not a direct investment, but represents a loss of revenue for the government by granting tax benefits to companies operating in the coal and natural gas sector. In other words, the government gives up collecting these amounts in taxes to favor these activities.
In practice, this means that money that could be used in other areas, such as health, education or infrastructure, will be indirectly used to support the operation of thermoelectric plants, making the final cost higher for public coffers and, possibly, for consumers.

Coal was included in the project due to political pressure. Advocates argue that Brazil's energy matrix still needs this resource. However, critics say this inclusion is misaligned with the energy transition objectives and the central theme of the project.

Coal incentives could cost R$595 billion in tax breaks by 2050. União Pela Energia estimates an 11% increase in Brazilians’ electricity bills. From an environmental perspective, coal-fired power plants contribute significantly to CO₂ emissions, undermining efforts to mitigate climate change.

Contradictions and criticisms of the project

Lawmakers were divided. While some defended the measure as essential for energy security, others, such as Senator Randolfe Rodrigues, highlighted the contradiction of including incentives for coal in a project aimed at renewable energy.

The “jabutis”, devices unrelated to the main topic, create obstacles. The inclusion of coal represents a deviation from the renewable focus and could delay Brazil’s consolidation as a leader in clean energy.

The future of offshore energy in Brazil

Offshore wind energy is one of the most promising in Brazil, with the potential to supply millions of homes. The same goes for solar energy, which could complement the energy matrix in a clean and efficient way.

Although the project brings advances, its execution will depend on political will, private investments and overcoming technical challenges, such as infrastructure and logistics.

The Offshore Energy Regulatory Framework It is an important milestone, but the inclusion of incentives for coal raises questions about Brazil's direction in the energy transition. It is essential that the country invests in renewable sources and avoids setbacks that harm the environment and the economy.