Brazil approves BRL 10 billion Profert programme

Brazil’s Federal Senate on 11 August approved the final text of the Profert bill (PL 699/2023), which will release up to BRL 10 billion ($1.85 billion) in tax-credit subsidies over five years to build new fertilizer plants or expand and modernise existing ones. The vote confirmed amendments made earlier by the Chamber of Deputies. The bill now goes to President Lula to be signed into law.

The programme will run from 2027 to 2031, with an annual cap of BRL 2 billion ($370 million) — unused amounts can be carried over to the following year. Federal tax credits will be awarded through a competitive procedure to companies producing synthetic or mineral fertilizers, their raw materials, bioinputs, biofertilisers and remineralisers. The credits will be treated as Social Contribution on Net Profits (CSLL) credits and can be used to offset federal tax debts or claimed as cash reimbursements. Total credits will be capped at 20% of a company’s Brazilian fertilizer production spend, and beneficiaries must maintain employment at or above the average level of the three months preceding the law’s entry into force.

The text creates a Programme for the Development of the Fertilizer Industry (Profert) alongside a suite of complementary measures. The Merchant Marine Freight Renewal Surcharge (AFRMM) will be waived on inputs destined for approved Profert projects between 2027 and 2031, up to BRL 200 million ($37 million) a year and BRL 1 billion ($185 million) over the period. The National Fertilizer and Plant Nutrition Council (Confert) will set a mandatory blending percentage of nationally produced synthetic and mineral fertilizers, starting at 2% and rising to 10% by 2031, and will publish an annual monitoring report. A separate provision channels federal resources through BNDES to fund concessional lending for approved projects, with BNDES and participating banks bearing the credit risk and the Monetary Council setting rates and terms.

Brazil, though one of the world’s largest food producers and exporters, imports more than 80% of the fertilizers it uses, the Senate said in its notes on the bill, citing the National Fertilizer Plan 2022–2050.

Author Senator Laércio Oliveira said the measure would put Brazil on a path towards autonomy in fertilizers. “From the sanction of the bill, Brazil will have a national fertilizer policy, with incentives for the domestic industry, so that we can move away from this external dependence. Fertilizers mean national sovereignty. And that is what we must pursue,” Oliveira said in the plenary.

Senate rapporteur Tereza Cristina, a former agriculture minister, said the Chamber’s substitute text “substantially improves” the original proposal, replacing what was mostly a tax-incentive framework with “a broader public policy that combines fiscal, financial, technological and governance instruments”. Speaking to the plenary on Brazil’s exposure, she said: “The events of recent years, notably the impacts of the war between Russia and Ukraine and the conflicts in the Middle East, have made clear the vulnerability of the national fertilizer supply and reinforced the need to expand installed production capacity in the country.”