Industry groups urge Lula to sign decree including natural gas for data centers

A coalition of dozens of organizations and parliamentary fronts is pressuring the federal government to urgently issue the Redata decree, demanding legal certainty and the inclusion of natural gas to power data centers in Brazil.

The progress of digital infrastructure in Brazil has hit a regulatory roadblock that has galvanized the industrial sector. A group consisting of nine parliamentary fronts and 32 representative entities has sent an open letter to President Luiz Inácio Lula da Silva calling for the immediate regulation of Redata (Special Tax Regime for Data Center Services). The main disagreement centers on the energy mix that will power these technological complexes, which are vital for the expansion of artificial intelligence and cloud computing.

While the economic team advocates for exclusively renewable sources, the Ministry of Mines and Energy (MME) points to the need to include natural gas and nuclear energy. The goal is to guarantee the stability and reliability required by these facilities, which operate around the clock. The legislation that created the regime opened the door for low-emission sources, but the lack of an executive decree is stalling billions in new investments in the country.

Risks to the power system and costs for consumers

The institutions warn that limiting energy supply options could have severe side effects for the National Interconnected System (SIN). Since data centers require a continuous, high-power supply, unnecessary technological restrictions could force the country to make massive investments in new transmission lines and activate more expensive emergency thermal power plants, raising electricity bills for all of society.

To circumvent the stalemate between government ministries, the sector is proposing a pragmatic solution. The idea is for the Planalto Palace to quickly publish the general guidelines for Redata, leaving the technical details for future complementary resolutions and public consultations.

We recognize that technical issues remain under discussion within the Executive Branch. However, we believe that these disagreements should not hinder the swift publication of the decree or delay the operationalization of the regime.

Tax predictability and eligible equipment

Beyond the energy issue, the manifesto calls for transparency regarding the list of Information and Communication Technology (ICT) machinery and equipment that will be eligible for federal tax suspensions, such as PIS/Cofins, IPI, and Import Tax. A restricted list of items could weaken Brazil’s competitiveness compared to other global markets.

This coordinated pressure aims to transform Brazil into a regional hub for technology and data processing. To this end, the signatories are also working with Confaz (National Council of Finance Policy) to harmonize ICMS (state VAT) across states, aiming to protect investments from legal uncertainty and drive the transition toward a modern and sustainable digital economy.