New incentive legislation for data centers opens doors for nuclear energy and biogas in Brazil.
The clean and sustainable energy sector in Brazil is celebrating a significant milestone following the Senate’s recent approval of the Special Tax Regime for Data Center Services (Redata). The measure, aimed at boosting the country’s digital infrastructure, also opens new avenues for renewable and low-emission energy sources, such as nuclear power and biogas.
The legislation, which now awaits presidential sanction, was shaped by a bill that relaxed the requirement for energy to be sourced exclusively from “clean or renewable” origins. The shift to “renewable or low-emission” sources is a game-changer, allowing for the inclusion of energy from natural gas, nuclear power, and thermal generation fueled by biogas.
Strategic opportunities for nuclear and biogas
The Brazilian Association for the Development of Nuclear Activities (Abdan) sees Redata as a strategic opportunity. With the rising demand for reliable, continuous power driven by the expansion of artificial intelligence and data processing, nuclear energy presents itself as a robust, low-carbon solution.
Abdan stated:
The large data centers that support the artificial intelligence revolution require reliable, continuous, and low-carbon energy. This is precisely where nuclear energy excels.
According to Abdan president Celso Cunha, this regulation aligns Brazil with global trends seen in markets like the United States, Canada, and Europe.
Concurrently, the Brazilian Biogas and Biomethane Association (ABiogás) highlights the potential of biogas and biomethane as renewable, firm, and dispatchable energy sources. These characteristics are crucial for ensuring the security and reliability of energy supplies for data centers, which operate around the clock, while also promoting waste utilization and the reduction of methane emissions. ABiogás will work to ensure the regulation explicitly recognizes biogas and biomethane, fostering technological neutrality and supporting domestic solutions.
Tax reductions and new challenges
Redata provides for the exemption of federal taxes on the import of electronic and information technology components for data centers, with a projected fiscal waiver of R$ 5.2 billion this year alone. In return, companies must use renewable or low-emission energy, meet water efficiency targets, make local investments, and dedicate a portion of their services to the domestic market.
The next crucial step will be the regulation of the legal framework, which will clearly define which energy sources qualify as “low-emission.” Expectations are that both Abdan and ABiogás will work actively to ensure that nuclear and biogas are explicitly included, consolidating Brazil as a hub for sustainable digital infrastructure innovation.
The sector is also awaiting a potential decision by Confaz on September 4th regarding the reduction of ICMS (state tax) on computing equipment. The Brazilian Association of Information and Communication Technology and Digital Technologies Companies (Brasscom) views this measure as complementary to Redata and essential for Brazil to become a global leader in data processing and increase its local technological autonomy. The Brazilian trade deficit in computer and information services, which reached US$ 7.9 billion at the end of 2025, highlights the urgency of these actions.
For Conexis Brasil Digital, which represents telecommunications and connectivity companies, the creation of Redata addresses one of the primary obstacles to the sector’s advancement in Brazil: the high tax burden on equipment and infrastructure. CEO Marcos Ferrari notes that the swift signing of the bill is seen as fundamental to ensuring legal certainty and attracting investment, promising a future of more jobs, innovation, and competitiveness.
