Brazilian states are pushing to include natural gas in the Redata framework, while the MPTCU has raised an alert regarding the impacts of rare earth mining, calling for a rigorous audit.
The past week has been marked by intense debate and strategic maneuvers within Brazil’s energy and mining sectors. Two key issues have taken center stage: pressure from state governors to include natural gas as an eligible energy source under the recently enacted Redata, and a request from the Public Prosecutor’s Office at the Federal Court of Accounts (MPTCU) for an in-depth audit of rare earth mining projects in Minas Gerais.
Both topics reflect the complexity of the energy transition and the necessity for sustainable, well-regulated development.
These discussions are crucial for the future of digital infrastructure investment and the exploration of critical minerals in the country, highlighting the tensions between economic growth and environmental safeguards. How the government defines the rules for Redata and how the TCU oversees rare earth extraction could significantly shape these sectors in the coming years.
Natural Gas and Redata: A Disputed Incentive
The enactment of the Special Tax Regime for Data Center Services (Redata) by President Lula (PT) on September 15, 2026, paved the way for up to R$ 7.2 billion in tax incentives for the data center sector. However, energy eligibility has become a point of contention: facilities must use 100% renewable or “low-emission” energy sources.
State governments, such as those in Amazonas and Sergipe—represented by governors Roberto Cidade (União/AM) and Fábio Mitidieri (PSD/SE)—have been advocating for the inclusion of natural gas in this category. They argue that excluding it could block vital investments, leveraging the vast reserves in Amazonas and the expansion of production in Sergipe via the Sergipe Deep Water (SEAP) project. Significant demand for gas is expected for future data processing centers.
The uncertainty regarding what constitutes “low emission” under Redata remains.
The lack of government consensus on qualifying natural gas as a low-emission source resulted in its omission from the initial decree, deferring the decision to a future interministerial ordinance.
The attraction of digital infrastructure to Brazil is driving energy demand, with the Ministry of Mines and Energy (MME) recording requests for data center connections totaling 38 GW—nearly one-third of the country’s current installed capacity. Globally, energy consumption by Artificial Intelligence (AI) servers is expected to double by 2030, also boosting interest in sources like nuclear power, with the International Atomic Energy Agency (IAEA) projecting that nuclear capacity could triple by 2060, particularly through small modular reactors.
Rare Earths and the MPTCU Audit
Simultaneously, following the enactment of the legal framework for critical minerals, the Public Prosecutor’s Office at the Federal Court of Accounts (MPTCU) requested that the Federal Court of Accounts (TCU) conduct an audit on rare earth mining in southern Minas Gerais on September 17. The objective is to ensure that federal bodies are prepared to monitor increasing activity and its long-term impacts.
The audit will focus on cumulative effects on water resources, soil, biodiversity, and public health. The region, which has a history of uranium mining and is rich in springs and mineral waters, requires continuous monitoring. The MPTCU request also covers an assessment of environmental liabilities, land reclamation guarantees, and the oversight of Financial Compensation for the Exploitation of Mineral Resources (CFEM) collection.
This scenario serves as a warning for the implementation of the National Policy for Critical and Strategic Minerals (PNMCE). While the policy aims to add value to Brazil’s mineral production chain, environmental organizations have expressed concern over the lack of socio-environmental safeguards and the risks of unregulated exploitation. The creation of the National Council for the Industrialization of Critical and Strategic Minerals (Cimce), linked to the Presidency, will be fundamental in defining guidelines and prioritizing projects, with its first meeting expected soon.
The context of these two issues underscores the complexity of pursuing sustainable development in Brazil. Clarity in Redata regulations and rigorous oversight of rare earth mining are essential to balancing economic growth with environmental protection and social equity. The next steps in government regulation and the actions of oversight bodies will be decisive for the trajectory of these strategic sectors.
