Bolsonaro sanctions law that benefits the coal industry in SC

President Jair Bolsonaro (PL) sanctioned, this Wednesday (5), the law that renews the policy to support coal production at the Jorge Lacerda Thermoelectric Complex (CTJL), in Santa Catarina, authorizing its operation for another 15 years.

The project had been presented at the beginning of Bolsonaro’s government, but was only approved by the Senate in mid-December with the support of the Santa Catarina bench.

Despite the renewal of the authorization for this thermoelectric plant (powered by coal), the new law creates the PTJ (Just Transition Policy), aimed at clean energy and pollutant reduction. It also establishes an energy transition program (ETJ) to achieve zero carbon emissions by 2050.

The government’s base of support in Congress has agreed to give Santa Catarina more time to prepare for the end of coal-fired thermoelectric generation in 2040. The mines are to be closed.

CTJL belonged to the Engie group and was sold in August last year to the investment fund FramCapital for R$325 million.

The new law also guarantees a government promise of a contract for the purchase of reserve energy from the plant, defining a fixed income sufficient to cover the costs of generation.

It also determines that at least 80% of the input (coal) to move the plant will have to be acquired in Santa Catarina, a state that concentrates one of Bolsonaro’s biggest support bases and which has coal activity as one of the main employers.

With the sanction, Bolsonaro also guaranteed compensation defended by the Santa Catarina bench in the face of the end of the subsidy to coal-fired power generators.

The government had already agreed that, in 2027, the CDE (Energy Development Account) will stop subsidizing energy generated by coal-fired plants. This account is responsible for the reasonable tariff.

In addition to renewing support for the coal industry, the new law also defines a subsidy program for customers of smaller distributors — below 350 GWh (Gigawatt-hour) per year.

This subsidy was made to prevent the tariffs of these smaller companies from being higher than those of larger distributors in neighboring cities.

The law also grants advantages to distributors that acquire others with a market of less than 700 GWh per year. If this company supplies energy to the target company of the purchase, it will be entitled to 25% of the subsidy granted now by the new law for ten years.