On December 12, the Brazilian government announced that it would resume import taxes on photovoltaic modules and wind turbines, a measure aimed at promoting the production of renewable energy equipment in Brazil. Gecex-Camex,
Brazil's executive agency for commerce and foreign trade, decided to cancel a reduction in import duties for assembled solar panels because production of similar products already exists in Brazil, the Ministry of Development, Industry, Trade and Services (MDIC) said. 324 zero-tariff preferences
for the product were also abolished. With this decision, solar modules imported from abroad will be subject to import duties under Mercosul's Common External Tariff (TEC), which will be 10.8% from January 1, 2024. The measure will take effect within 60 days of the abolition of the zero tariff preference.
This initiative is in line with the Brazilian government's plan to strengthen the renewable energy supply chain, which aims to promote Brazil's re-industrialization process and position it as a leader in the global energy transformation. Brazil has made some progress in the manufacture of solar power equipment, and solar energy has become the second largest source of national electricity supply. However, the main component of solar power generation system, solar panels, mainly depends on imports from abroad. The resumption of the
tax was welcomed by the Brazilian Electrical and Electronics Industry Association (Abinee), which said it would promote the development of the Brazilian industry and increase employment in Brazil. Solar modules are Brazil's fourth largest import, after oil, diesel and potassium chloride used in agriculture, according to the Brazilian Association of Electrical and Electronics Industries. "The production of solar power equipment is essential for national development," Gerardo Alckmin,
vice-president and minister of development, industry, trade and services, said in a statement. "To allow time for the market to adjust to the new rules, Gecex has also established a quota system with a final 0% import quota, to be implemented in a step-down form until 2027," the Ministry said.
According to Abinee, the increase in import duty will not affect market prices, as it applies only to new import purchases, which will take place at a time when prices of stockpiled products are falling. For the wind industry, the government has increased the tax-free wind generator power cap. So far, equipment over 3,300 kilovolt-amperes (kVA) can be sourced abroad with zero import duty. Gecex-Camex decided to raise the upper limit: only equipment exceeding 7,500 kilovolt-amperes (kVA) can continue to enjoy import tax exemption for a period of only one year,
as the government found that Brazilian domestic industry has been able to produce equipment exceeding this power. Beginning
in 2025, all wind turbines purchased from abroad will be subject to an 11.2% import tariff. Any potential tax exemption, regardless of power, will be granted only if it is proven that there is no factory in Brazil to produce it. The move should be welcomed by wind turbine manufacturers, who have been complaining that they are facing greater competitive pressure from imports in the context of shrinking local related industries. At the same time, some global companies have stopped producing wind turbines in Brazil, and the Brazilian government's tax exemption policy for imported related equipment is undoubtedly worse.
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