The publication of the National Solid Waste Policy – NSWP (Política Nacional de Resíduos Sólidos), on the 2nd of August of 2010 (pursuant to Law 12.305/2010), sets out the Brazilian federal government's intentions with regard to waste management. The NSWP aims to foster growth and sophistication in the waste management industry in Brazil. It includes economic incentives designed to solve issues associated with waste management in Brazil. The proposed changes in waste management will encourage investment in reuse and recycling facilities and generation of energy from waste. Generally, the approach is similar to other western nations, namely a move away from the current dominance of landfill. However such is the dominance of landfill that it will remain a significant feature for a number of years and, consequently, investment will be required to upgrade the engineering quality of the remaining landfills.
In addition to the NSWP, the National Energy Plan 2030 – NEP 2030 (EPE 2007), which was prepared by Empresa de Planejamento Energético – EPE (a public body linked with the Brazilian Ministry of Mining and Energy), is also worthy of attention. This national energy plan looks at the next few years of the Brazilian energy market and highlights significant potential growth in the generation of energy from waste (up to 1.3 GW).
Nature and size of the Brazilian waste market
The Brazilian waste market is relatively large. The latest reliable national statistics are from 2008 and show that in Brazil approximately 5,500 cities utilise public waste management services which deal with up to 259,547 tonnes of waste per day. The statistics show that 97-98% of this waste is sent to landfill, with roughly 64% going to fully engineered landfills (with which western operators will be largely familiar), 18% going to uncontrolled and unengineered landfills and the balance being disposed of in intermediate landfills (i.e. regulated with varying forms of engineered safeguards). Approximately 0.03% of the above waste is incinerated without any form of energy recovery.
With regard to recycling, the first official report was prepared in 1989 and identified the existence of 58 separate collection programs in the country. By 2000, this number had risen to 451 and then to 994 in 2008. Even at this level, only 0.63% of organic waste was composted and 1.2% of municipal waste recycled. The South and Southeast regions of Brazil contain 46.0% and 32.4% respectively of the cities which have selective collection programs.
Private contractors manage other wastes but there are few reliable figures in this regard, save that there is a relatively thriving private waste management sector in metals and plastics collection. During 2006, 138,100 tonnes of waste aluminium cans were recycled (being a national recycling rate of 94.4%) and in the same period Brazil recycled 194,000 tonnes (or 51.3%) of waste PET bottles.
Under the Brazilian Constitution it is the responsibility of each Municipal Government to provide adequate waste management services in its territory. The majority of urban waste management systems are provided by Municipal Governments (65.5%) with the private sector providing the balance (34.5%). All companies carrying out waste management activities need to be licensed by the appropriate environmental agency, which almost always is the environmental agency of the respective state.
Key Provisions of the National Solid Waste Policy
Law 12.305/2010, which established the NSWP, is a Federal Law which aims to significantly increase the recovery and recycling of waste and establish a framework for enhanced waste management in Brazil. This law sets out principles, establishes goals and creates economic instruments and guidelines for integrated waste management, with specific obligations for the Government and the waste producers.
In summary, Law 12.305/2010:
- recognises the economic and social benefits of reuse, recycling and recovery of waste;
- creates economic, financial and credit instruments aimed at facilitating and encouraging investment in sustainable waste management facilities;
- supports cooperation and partnership between public and private sectors;
- requires cities to abolish unregulated landfill sites and fly tipping;
- compels some industries to implement "waste reverse logistics systems" that are aimed at recovering waste for reuse, recycling or sustainable disposal;
- establishes a shared responsibility for the life cycle of products; and
- encourages the development of new businesses in this sector.
Energy from Waste
This is expressly favoured, particularly as it also constitutes a clean/renewable form of energy. Law 12,305/2010 expressly supports increased energy recovery from waste. In a subsequent LawNow article we will delve deeper into the Brazilian Government's intentions in this regard.
In the meantime it is worth noting some of the existing facilities in Brazil. The city of São Paulo currently operates energy generation from landfill gas facilities at its two largest landfills, Bandeirantes and São José. These plants are capable of generating 20 MW and 24.8 MW of electricity respectively, which is enough to meet the electricity needs of around 170,000 Brazilian households. Additionally, Sao Bernardo do Campo, a city located in an important industrial region of São Paulo state, is now in the process of building energy from waste thermal plant through a Public Private Partnership (PPP).
The Federal and State Governments have authorised the federal financial institutions to set up special lines of credit to finance activities aimed at reuse, recycling and recovery of waste, including the development and deployment of new technology in the Brazilian waste management sector.
Additionally, in order to encourage the construction of energy from waste plants, the National Agency of Electric Energy (ANEEL) has created an incentive for energy from waste plants by offering an exemption from transmission and distribution fees. This exemption will be available for plants with an installed capacity of up to 30 MW which use waste to satisfy more than 50% of their fuel needs.
Contracting with the Municipal Government
Outsourcing of waste management obligations by Municipal Governments can be carried out in a number of ways including public concessions, public consortiums and PPPs.
In most countries when they embarked on an overhaul of their waste management sectors, uncertainties arose in connection with the underlying laws and policies which supported such reforms. Brazil is no different in this regard. Naturally there are a number of uncertainties surrounding some of the operational concepts and rules created by NSWP. However Brazil is undoubtedly moving in a direction which is very familiar to that being seen in many other parts of the world, and in particular in the West. It is a direction which is generally well understood and familiar to investors. It is believed that the new regulatory frameworks, coupled with an expanding economy, economic incentives and special lines of finance should encourage the entry of private investors, including non-Brazilian companies, to help develop modern waste management solutions in Brazil in the coming years.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 05/03/2012.