Environmental licensing: what changes with PL 2.159/2021 and what are the impacts for agriculture

Approved by the Senate in May 2025, Bill No. 2.159/2021 proposes a General Environmental Licensing Law in Brazil. The main objective is to create more uniform national rules for the procedures and deadlines for issuing environmental licenses, replacing the current regulations based on CONAMA Resolution No. 237/1997 and state regulations. The measure seeks to reduce the existing asymmetry between states and offer greater legal certainty for different sectors, including agribusiness.

Currently, environmental licensing in Brazil follows, in most cases, a three-phase model, which includes three distinct stages: the Preliminary License (LP), the Installation License (LI) and the Operating License (LO). This process, in addition to requiring detailed environmental impact studies, can be long and costly, especially for medium-sized projects.

One of the main changes introduced by the bill is the exemption from environmental licensing for activities classified as low-impact, such as extensive and semi-intensive agriculture and livestock farming. Even with this exemption, producers are still required to fully comply with the Forest Code, which includes registration in the Rural Environmental Registry (CAR), maintenance of Permanent Preservation Areas (APPs) and Legal Reserves (RLs), and adherence to the Environmental Regularization Program (PRA), when necessary. In the case of conversion of areas with native vegetation, the requirement for prior authorization for removal remains, regardless of the exemption from licensing for the other phases of the activity.

Another highlight is the proposal to expand the use of the License by Adhesion and Commitment (LAC), a simplified environmental licensing model. In this format, the entrepreneur declares compliance with legal requirements and assumes environmental responsibilities, without the need for prior technical analysis by the licensing agency. According to the study by FGV Bioeconomia, coordinated by Leonardo Munhoz, the text of PL 2.159/2021 allows the application of the LAC also for medium-impact activities, which represents a change in relation to the current standard, in which the LAC is restricted to low-impact activities. The study highlights that this proposal may generate legal challenges, since a recent decision by the Federal Supreme Court (ADI 6618) established that this type of simplified license should be applied only to activities with low potential for environmental impact.

The same study indicates that Brazil has one of the strictest regulatory frameworks for the agricultural sector, when compared to countries such as the United States, South Africa and Australia. In the United States, for example, federal regulation only applies to large intensive animal production systems (CAFOs), with a focus on water pollution control. In South Africa, environmental licensing is only required for conversion of native vegetation exceeding 300 m² or for agriculture in areas exceeding 100 hectares. In Australia, federal licensing is only required in cases of impact on environmentally sensitive areas, such as habitats of endangered species or indigenous heritage.

According to FGV Bioeconomia, the proposal for a general law seeks to reduce differences between states, but has generated discussions about the effects of this standardization, especially because states currently adopt different rules and have different levels of technical structure to implement environmental licensing. The study highlights that the same activity may require licensing in one state and be exempt in another, which currently creates uncertainty for producers.

Another aspect addressed in the study concerns the integration of the new framework with other recent legislation, such as the new Bioinputs Law (Law No. 15.070/2024). The production of bioinputs within the farms themselves (on-farm production) was regulated by the new law with a simplified process, based on good agricultural practices and a producer registry. However, Bill 2.159/2021 does not exempt this type of activity from environmental licensing, which may generate different interpretations between the two standards until there is clearer regulation.

In this interview for Insper Agro Global, lawyer Fernanda A. Tanure, partner in the Environment, Climate and Mining practice at BMA Advogados, comments on the legal, political and environmental impacts of Bill 2.159/2021, focusing on the effects on agribusiness and Brazil's international image*.

Does the current project contradict previous STF decisions on environmental licensing? What does this represent in legal terms?

The Federal Supreme Court (STF), in the judgment of ADI 5014 on Bahian Law No. 12.377/2011, declared the unconstitutionality of the provision for Licensing by Adhesion and Commitment (LAC) for activities with medium environmental impact, maintaining its constitutionality only for low-impact activities.

The current version of Bill 2.159/2021 provides for the possibility of applying the LAC to activities and enterprises classified simultaneously as small or medium-sized and as having low or medium polluting potential. This can be interpreted as a possible tension with the understanding established by the STF in ADI 5014.

However, it is important to note that the Court's decision was based on the fact that state law allows a licensing modality considered less restrictive than that provided for at the federal level, especially by Conama Resolution No. 237/1997. Bill 2.159/2021, on the other hand, seeks to standardize the rules for all federative entities, eliminating the conflict between state and federal regulations. In addition, the bill imposes additional cumulative conditions for the use of the LAC, such as the prohibition of the suppression of native vegetation.

Even so, the STF precedent may serve as a basis for future legal challenges, which tends to generate legal uncertainty for entrepreneurs and licensing bodies, given the possibility of prolonged judicialization over the validity of the rule.

What is the risk of the strategic license category becoming a political instrument to favor allies or release controversial projects?

The inclusion, by the Senate, of the Special Environmental Licensing (LAE) modality for Strategic Activities or Undertakings in Bill 5.159/2021 has generated attention from experts and environmental law practitioners. This is because the bill provides that the definition of what will be considered “strategic” will be made by decree, based on a biannual proposal by the Government Council. In other words, every two years, an act of the Executive Branch may indicate, on an individual basis, which activities and undertakings will be subject to this special licensing procedure.

The modality provides for a single-phase procedure, with a maximum period of 12 months for issuing the license, which may be valid for between 5 and 10 years. Given the possibility of government definition of what qualifies as “strategic”, there is a risk that the instrument may be interpreted or used as a means to accelerate specific projects during a given term, with criteria that may vary depending on the current administration.

It should be noted that the LAE may be applied at all levels of government — federal, state, district and municipal —, respecting the jurisdiction of each entity. In addition, it will be up to the competent licensing body to define, in each case, the applicable documents, studies and environmental requirements, which may generate relevant variations in the practical application of the instrument.

It is important to highlight that this modality should not be confused with military projects, which, as already provided for in current legislation, are not subject to the environmental licensing process and, therefore, are not the object of the LAE.

But was there already, in the situation prior to the PL, some risk of using licensing as a political instrument?

Risks of political interference in the licensing process are not exclusive to the new legal framework. Although licensing is a right of the entrepreneur who complies with legal and environmental requirements, there are situations in which the process may be interpreted or conducted as an act of a discretionary nature. In some cases, this results in the imposition of excessive conditions or the denial of the license even when the technical parameters are met.

It is important to highlight that licensing involves a margin of technical appreciation, especially in the definition of environmental conditions. However, any refusal or additional requirement must be duly justified, based on legal grounds and studies that justify the administrative decision.

There are also examples of external pressures that occur in parallel stages to the licensing itself — such as the requirement to present the Land Use and Occupation Certificate issued by municipalities. This document, essential for the installation of projects, may, in some cases, have its issuance conditioned on informal counterparts, such as the execution of works or local investments. These practices, although not formally foreseen, may raise doubts about the purpose of the administrative act.

This type of scenario highlights the importance of clear, uniform and technically justified rules for the environmental licensing process — one of the central objectives of Bill 2.159/2021. Even so, the effective prevention of undue interference depends on control and transparency mechanisms that continue to be improved, both in legislation and in the actions of the responsible bodies.

Is decentralizing licensing to states and municipalities without technical structure viable?

First, it is important to clarify that the 1988 Federal Constitution attributed environmental protection and pollution control as a common responsibility among the Union, the States, the Federal District and the Municipalities. Complementary Law No. 140/2011 was responsible for regulating the rules for cooperation between these federative entities. Environmental licensing, as an instrument of environmental protection, is also subject to this division of powers.

It is common to imagine a hierarchy between the federative entities, with the Union above the States and the latter above the Municipalities. However, this is not the logic of the Brazilian legal system. Each entity has its own competence, as established in LC 140/2011, in articles 7 (Union), 8 (States), 9 (Municipalities) and 10 (Federal District).

In the case of the Union, in addition to the powers provided for in LC 140, Federal Decree No. 8.437/2015 defines the types of projects subject to licensing by Ibama. Municipalities, in turn, are responsible for licensing projects with local environmental impact, according to the typology defined by their respective State Environmental Councils, based on criteria such as size, polluting potential and nature of the activity. States, on the other hand, exercise residual powers, that is, for activities that do not fall within the powers of the Union or the Municipalities. The Federal District, due to its hybrid nature, accumulates state and municipal powers.

Historically, in Brazil, states regulated environmental licensing before municipalities — such as São Paulo (1976 – still in force), Rio de Janeiro (1977) and Bahia (1980). As a result, states already had their own rules and lists of licensable activities. After the publication of LC 140/2011, municipalities began to assume their powers with greater robustness. In practice, therefore, the structuring followed a different path from that originally planned, but we are currently experiencing a moment of consolidation of municipal powers, including through formal delegations made by states.

Both for the Municipality to exercise its original competence and for the delegation of competence to occur — also called municipalization of licensing —, it is necessary for it to meet some requirements: have its own capable environmental agency, with an adequate number of qualified technicians; have a Municipal Environmental Council; and have its own environmental legislation (according to articles 5 and 15 of LC 140/2011).

The viability of the delegation is assessed and formalized by the State Environmental Councils, which analyze the technical capacity of the Municipality to define which types and sizes of enterprises it can license.

Therefore, the decentralization of licensing is only effective when there is a minimum structure in place to absorb the assigned competence, as provided for in Complementary Law 140/2011 itself.

It is expected that this technical preparation process will be long. In other words, a municipality that is not prepared today will not be prepared in the coming years.

The training of federal entities to fully exercise their powers in environmental licensing is, in fact, a gradual process that demands consistent and continuous public policies. This is a priority agenda that requires structured investment in environmental agencies to ensure qualified technical teams, with updated training and the ability to keep up with the regulatory and technological developments in the sector.

One of the main challenges currently faced in the country is related to the structural limitations of many environmental agencies, which operate with a reduced number of employees and insufficient resources for computerization and integrated management of processes. These weaknesses directly impact the efficiency, predictability and technical quality of analyses.

The state of São Paulo offers a relevant example of how institutional investment can generate significant advances. CETESB [TAN1] — the Environmental Company of the State of São Paulo — has a consolidated history of technical training, including through international partnerships. An agreement signed with GIZ (German cooperation agency) enabled the transfer of applied knowledge, especially in the development of administrative guidelines and in the structuring of the contaminated areas management system, inspired by the German model.

This technical preparation has made CETESB a national reference, to the point that it is frequently sought out by entrepreneurs interested in obtaining licenses even in situations in which licensing would not be within its jurisdiction or would be dispensable. In these cases, the agency formally denies the requests, as provided for in the legislation, but the demand reflects the recognition of its credibility and the legal certainty associated with its analyses.

When the licensing body has an adequate structure, licensing tends to be faster, more technical and predictable — reducing regulatory risks, administrative disputes and potential obstacles to strategic projects.

Does exempting extensive livestock farming from licensing help reduce costs or open the door to further environmental degradation?

The exemption may indeed contribute to reducing operating costs, but this does not mean that there are no legal obligations. Extensive livestock farming continues to be subject to compliance with the Forest Code, which since 2012 has required, for example, the Rural Environmental Registry (CAR). This registry must contain information on the property's Permanent Preservation Areas (APPs) and Legal Reserves. If the producer is not in compliance with the legislation, he or she must join the Environmental Regularization Program (PRA) and present a recovery plan.

Furthermore, it is still mandatory to obtain authorization for the removal of vegetation, a grant for the use of water resources, among other authorization acts.

The important thing to ensure that there is no increase in environmental degradation is the effectiveness in monitoring the environmental quality of the region and carrying out inspection activities.

How does the new law impact agriculture's access to international markets that require traceability and environmental regularity?

The new law may have indirect impacts on access to international markets, especially those that require proof of socio-environmental compliance throughout the supply chain. Several international regulations already in force or in the implementation phase have established increasing requirements on traceability and environmental compliance. Among them, the European Green Deal stands out, which includes the European Deforestation-Free Regulation (EUDR) — applicable to products such as beef, soy, coffee, cocoa and derivatives —, the Corporate Sustainability Due Diligence Directive, scheduled to come into force in July 2027, and the German Supply Chain Due Diligence Act (LDCF). In addition, the Carbon Border Adjustment Mechanism (CBAM) will become permanently applicable in 2026.

In this context, producers and exporters are expected to seek to prove the traceability of legality and environmental compliance of their production areas. Although environmental licensing remains an important regulatory instrument in Brazil, it is not the only means of demonstrating regularity. This model represents a shift from the traditional command and control approach by incorporating due diligence requirements on the part of contracting companies, which tend to demand compliance from their suppliers, regardless of the formal licensing requirement.

For agricultural activities exempt from licensing, for example, instruments such as the Rural Environmental Registry (CAR) and adherence to the Environmental Regularization Program (PRA) remain relevant means of proving compliance with environmental legislation.

So, will there be any impact on access to these markets?

It is reasonable to assume that this is the case. The adoption of new instruments and parameters will require a period of adaptation on the part of the various stakeholders involved, both in the public sector and private agents, in international trade relations. Environmental compliance tends to become a central element in trade negotiations, regardless of the legal licensing requirement in the country of origin.

This scenario may also represent an opportunity for independent certifiers, who will play a relevant role in verifying environmental practices. These certifications may go beyond proving the absence of deforestation, also including sustainability parameters, environmental integrity and climate risk assessment.

And which production chains are most vulnerable to the weakening of licensing? Is there a risk of regression in sustainable chains?

Production chains focused on exports, especially those integrated into markets with a high degree of socio-environmental demands — such as soy, beef and timber — are more exposed to the need to prove environmental regularity with a high degree of traceability and transparency.

On the other hand, production chains linked to multinational companies or groups with publicly assumed ESG commitments tend to maintain their environmental compliance standards, regardless of possible internal flexibilities, given the continuous international scrutiny by consumers, investors and foreign governments.

With increasing environmental accountability throughout the supply chain, driven by foreign standards, the trend is to maintain — and even strengthen — sustainability criteria in sectors more exposed to international trade. This reinforces the need for consistent verification mechanisms, including for activities that may be exempt from formal licensing.

In November, all eyes will be on the 2025 United Nations Climate Change Conference (COP30), which will be held in Belém, Pará. How could this flexibility in licensing impact Brazil's role in environmental treaties and international negotiations?

COP30 will be an important showcase to present Brazil's contributions to the global environmental agenda. The country has several recognized environmental assets, such as a predominantly clean energy matrix, the consolidated use of ethanol and biofuels such as biodiesel and biogas — considered strategic alternatives for the energy transition — in addition to progress in nature-based solutions, such as bioinputs and ecological restoration.

At the same time, the national scenario presents challenges and regulatory tensions that may have repercussions on multilateral discussions. An example of this is the bill under discussion, whose proposals — such as the creation of a special license for strategic projects — may be seen as misaligned with the international movement to strengthen environmental protection.

Historically, significant legislative changes in this area tend to be subject to legal action, as was the case with the Forest Code, which had several provisions challenged in the Supreme Federal Court. The new licensing framework, if approved as is, is also likely to be subject to judicial scrutiny. This could create uncertainty for investors and hinder the country's institutional communication in international forums.

On the other hand, the proposal also includes positive aspects, such as the integration of environmental databases and the standardization of procedures among federal entities, which can increase the efficiency and transparency of processes. The use of data already available to support new analyses has the potential to speed up processing without compromising the technical quality of decisions.

One of the points frequently mentioned in criticisms of the Bill is the lack of a specific approach to climate issues. However, it is important to highlight that, although environmental licensing is one of the central control instruments, it is not, in itself, the exclusive channel for dealing with climate change. In several countries, climate aspects are addressed by other regulatory instruments and specific policies, not necessarily included in the licensing processes. Comparative surveys indicate that the direct integration of climate goals into licensing procedures is not yet a global practice.

Thus, the new environmental licensing framework could represent an important institutional advance if it is accompanied by technical and regulatory reinforcement. However, its compatibility with Brazil's international commitments will be a sensitive issue in the context of COP30, requiring clear communication from the country about the instruments adopted to ensure environmental protection and compliance with climate goals.

* The opinions expressed in the interview are the responsibility of the interviewee and do not necessarily represent the opinion of Insper Agro Global.

Fernanda A. Tanure Fernanda is a partner in the Environment, Climate and Mining practice at BMA, with a prominent role in administrative and judicial litigation and in the strategic resolution of environmental disputes. She has extensive experience in environmental law, working both in the public sector and in private practice. Her most recent role was as Manager of the Legal Department of CETESB – Environmental Company of the State of São Paulo. In private practice, Fernanda has worked on cases of national and international relevance, always dealing with litigation (with a large number of lawsuits, both collective and individual) and in environmental advisory matters.

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