Brazil's Green Licensing Law: Boom or Risk?

What Is Brazil's New Environmental Licensing Law?

The General Environmental Licensing Law (Lei Geral do Licenciamento Ambiental) came into force in February 2025. It was designed to standardize environmental regulations across federal, state and municipal levels, improve timeline predictability and tailor licensing categories to the actual impact of each project.

Why Did Congress Override Presidential Vetoes?

President Lula vetoed 63 provisions of the law, but Congress overturned 52 of those vetoes, arguing that billion-dollar projects are stuck waiting for environmental clearance. The Ministry of Transport alone plans to award between R$ 700 billion and R$ 800 billion in road and rail contracts over the next ten years.

What Do Supporters Say?

Backers argue the law makes the regulatory framework easier to understand and navigate. Attorney Werner Grau of Pinheiro Neto notes that licensing now focuses on priorities: some projects require strict controls, while low-impact ones can obtain a simple Adhesion and Commitment License by self-declaring compliance with legal parameters — no site inspection or prior environmental impact assessment required.

What Are the Critics' Concerns?

Environmental lawyers and activists warn the law creates legal uncertainty rather than eliminating it. Attorney Maurício Guetta of PUC/SP points to the BR-319 highway — the 1970s-era road linking Manaus to Porto Velho — as a case study. Previously classified as a project of significant environmental impact, it is now exempt from full licensing under the new rules. André Castro Santos (LaClima) and Márcio Astrini (Observatório do Clima) agree that removing clear parameters generates a false sense that anything goes, and that courts will ultimately settle the disputes.

Is the Law Being Challenged in Court?

Yes. Three Direct Actions of Unconstitutionality (ADIs) have been filed at Brazil's Supreme Court (STF), meaning the law's full application may face judicial review before it can deliver the investment certainty it promises.