Brazil’s Ministry of Environment and Climate Change has enacted Ordinance GM/MMA No. 1,250/2024 to govern the Incentive Mechanism for the Recycling Industry. The ordinance supports tax deductions for recycling projects, outlines eligible participants, and specifies proposal requirements, including financial ranges from R$50,000 to R$8 million. Submissions are facilitated via Transferegov, with a project execution span of three years post-authorization.
The Brazilian Ministry of Environment and Climate Change has introduced Ordinance GM/MMA No. 1,250/2024, which serves to regulate the submission, evaluation, and monitoring of proposals and projects arising from the Incentive Mechanism for the Recycling Industry and its Production Chain. Under this ordinance, proposals must align with the goals established in Article 3 of Law No. 14,260/2021, also known as the Law of Incentives for the Recycling Industry, which is further governed by Federal Decree No. 12,106/2024.
One of the primary attributes of the Incentive Law is to provide tax benefits—specifically, deductions of up to 6% of personal income tax for individuals and up to 1% for legal entities directed toward recycling initiatives. Eligible participants for submitting proposals include a variety of organizations such as recyclable material collectors, educational institutions, condominium associations, non-profits, and governmental bodies, among others. Proposals should ideally incorporate cooperation with recyclable material collectors.
Each proposal must detail essential elements including the project’s objectives, the specific issues being addressed, its alignment with incentive goals, the intended audience, anticipated outcomes, objectives, and a timeline for execution. The planned project’s financial scope ranges from a minimum of R$50,000 to a maximum of R$8 million.
Submissions are to be processed via the Partnership Management System (Transferegov), with projects permitted a maximum execution period of three years once authorized through an Execution Authorization Term. For further assistance related to this ordinance, individuals are encouraged to consult the Environmental, Climate Change, and ESG Practice of Tauil & Chequer Advogados, in association with Mayer Brown.
Brazil has made strides in environmental regulation, particularly focusing on enhancing its recycling capabilities through legislative measures. The introduction of the Recycling Incentive Law represents a concerted effort to facilitate and promote recycling initiatives across various sectors. By providing tax incentives and establishing clear guidelines through Ordinance GM/MMA No. 1,250/2024, the Brazilian government creates an enabling environment for diverse entities to engage in sustainable practices, bolster their recycling efforts, and contribute to a greener economy. This initiative aligns with global trends towards sustainable development and resource conservation, reflecting Brazil’s commitment to comprehensive environmental stewardship.
In conclusion, the implementation of Ordinance GM/MMA No. 1,250/2024 signifies a meaningful advancement in Brazil’s commitment to enhancing its recycling industry. By offering tax incentives and establishing a clear framework for project proposals, the Brazilian government actively encourages a diverse range of organizations to participate in recycling efforts. This approach not only fosters environmental benefits but also contributes to the economic vitality of the country by engaging a variety of stakeholders in sustainable practices.
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