Brazil: the path towards a more circular economy

In November, Brazil will host the United Nations’ COP30 climate change conference in the northern city of Belém, which is located in the Amazon area. Despite all the controversies and difficulties with accommodation and transportation for a city lacking the scale of infrastructure to tackle an event of this size, expectations are high for COP30.

In Belém, representatives of national recycling institute INEFSA will participate in a circular economy panel discussion on: the major contribution of recycling to mitigating environmental impact; incentives for the sector; and the importance of the tax benefit proposed to the National Congress. 

In 2023, Brazil approved a major tax reform, which is considered the most ambitious overhaul of the country’s tax system in decades. The reform sought to simplify a fragmented structure by introducing two new broad-based consumption taxes, shared between states and municipalities. Both follow the model of a value-added tax. Faced with this oversight, the recycling industry mobilised and INESFA emerged as a key advocate, engaging in a dialogue with law-makers to correct this imbalance.

This is the first time the organisation has proposed something of this nature whereby, in addition to the lack of tax impact, a tax credit will be generated for those manufacturers benefitting from the use of recycled inputs.

The congressional approval stage was reached with 185 votes in favour out of 513 members, enabling the constitutional amendment to be discussed by the General Assembly. The amendment, numbered 34/2025, will be submitted for discussion in the coming months.