Brazil. Tuesday, 05 November 2024.
On November 30th, the Consultor Jurídica portal published an important ruling regarding the taxation of decarbonization credits, in this case, the CBIO.
But what is CBIO about?
Each CBIO corresponds to one ton of CO2 avoided and is traded since 2017 by B3, the Brazilian Stock Exchange.
Simply put, the operation goes like this:
producers and importers of biofuels, duly certified by the National Petroleum, Natural Gas and Biofuels Agency (ANP), issue CBIOs based on their purchase and sale invoices;
on the other hand, fossil fuel distributors, who have annual decarbonization targets calculated by the ANP, based on the proportion of fossil fuels they sell, acquire CBIOs as a way of achieving those targets.
It looks like a regulated carbon market, doesn't it?
The CBIO is an instrument created in Brazil in 2017, within the scope of the National Biofuels Policy (RenovaBio) and in support of the expansion of production and use of biofuels in the country.
As we have been indicating, the uncertainties related to legal and accounting issues have gradually been addressed, at least in terms of discussions and greater engagement on the part of specialists.
The same goes for tax issues, regarding the incidence of IRPJ, CSLL, PIS and COFINS taxes.
Turning back to CBIO and the article on the Consultor Jurídica portal, in 2022, a biofuels plant filed a writ of mandamus so that the Federal Revenue recognized, in the revenue obtained from the sale of CBIOs, the nature of financial revenue, on which the rate of 0.65% for PIS/Pasep collection and 4% for Cofins.
The plea was initially dismissed, with the understanding that the CBIOs would be directly linked to the company's corporate purpose, constituting a “non-monetary asset”.
The company appealed to the TRF-3, which reversed the sentence.
According to the ruling, “In the case of credit written and negotiated under the dictates of Law 13,576/2017, Decree 9,888/2019 and MME Ordinance no. 56/2022 and under the auspices of CVM Resolution 175, there is no doubt about the financial nature of the revenues obtained from the sale of securities represented by CBIOs”
Click on the image below to read the full article (in Portuguese).
While the Carbon Market is not regulated, negotiations continue in the so-called Over-the-Counter (OTC) Market.
Read here a little more about the B3 OTC Market, with reference to CBIOs Decarbonization Credits, ESG Thematic Bonds such as Green, Social and Sustainable Bonds and Sustainability-Linked Bonds in addition to Carbon Credits.
