On May 21, the Federal Senate approved Bill No. 2.159/2021 by a vote of 54 to 13. The bill, originally introduced in the Chamber of Deputies as No. 3.729/2004, aims to establish the General Environmental Licensing Law. As the Senate introduced amendments to the text, it will now return to the Chamber of Deputies for further consideration.

Although environmental licensing was formally introduced in 1981 under Article 10 of the National Environmental Policy (Law No. 6.938/1981), Brazil has yet to enact a comprehensive and specific general law on the subject. Since its initial proposal in 2004, numerous other bills and proposed amendments have been appended to it.

What is environmental licensing?

Environmental licensing is a risk management tool, implemented through a specific administrative process, whereby the adverse environmental impacts of potentially polluting activities are identified, mitigated, and/or offset. Today, environmental licensing incorporates the principles of precaution and prevention in both its legal structure and practical application.

The licensing process is managed by the competent authority, which may be at the state, municipal, or federal level, according to the rules set forth in Complementary Law No. 140/2011. According to CONAMA Resolution No. 237/1997, the environmental license is defined as an administrative act by which the environmental authority sets forth the conditions that must be complied with by the project proponent. In general, environmental licensing in Brazil occurs in three stages, aligned with the project’s lifecycle: Preliminary License (Licença Prévia – LP), Installation License (Licença de Instalação – LI), and Operation License (Licença de Operação – LO). There is also the possibility of simplified licensing for low-impact activities.

A simplified licensing procedure is also available for low-impact activities.
For further information, please refer to our publications on this topic.

Key changes:

• Creation of four new Licensing Modalities, in addition to the traditional LP, LI, and LO:
• Environmental License by Adhesion and Commitment (Licença por Adesão e Compromisso – LAC): automatically granted without prior technical analysis, upon the proponent’s declaration of compliance with pre-established environmental conditions applicable to activities of low or medium pollution potential;
• Single Environmental License (Licença Ambiental Única – LAU): encompasses the installation, expansion, and operation phases of an activity or project; granted based on an Environmental Control Report (Relatório de Controle Ambiental – RCA), an Environmental Control Plan (Plano de Controle Ambiental – PCA), and other technical documentation;
• Corrective Operation License (Licença de Operação Corretiva – LOC): allows the regularization of existing operations or activities developed without prior environmental licensing, and may be granted through the adhesion and commitment mechanism;
• Special Environmental Licensing Procedure for Strategic Projects (Licenciamento Ambiental Estratégico – LAE): added by the Senate, this procedure allows the Government Council to classify specific projects as “strategic” (as defined by decree), enabling simplified licensing regardless of the project’s potential environmental impact.
• Expansion of Exemptions from Licensing Requirements: licensing is waived for various activities, including certain agricultural operations (e.g., cultivation of crops of agronomic interest, and small-scale extensive, semi-intensive, or intensive livestock), emergency public works, and facilities for solid waste sorting.
• Maximum Timeframe for Review of Priority Projects: establishes a maximum period of one year for the review of projects designated as priorities, as defined by subsequent regulation.

Strengths and Critical Issues of the Proposed Law

Positive Aspects:

• Prioritization of digital processing of environmental studies and documents, with public access to information through electronic means;
• Mandatory technical justification by the licensing authority for all environmental conditions imposed;
• Prohibition of environmental conditions intended to mitigate or compensate for impacts caused by third parties or outside the proponent’s control or legal authority, including public services;
• Public participation in environmental licensing processes, whether in person or remote, including public consultations and hearings;
• Definition of direct and indirect impact areas based on the environmental assessment rather than fixed geographic distances;
• Possibility of priority review and extended license validity for projects adopting innovative technologies, voluntary environmental programs, or measures exceeding statutory standards.

The establishment of maximum deadlines for license issuance aims to reduce bureaucratic delays and reinforce legal certainty. Integration with urban planning instruments—especially in water and sanitation infrastructure projects under municipal jurisdiction—promotes a more systemic and efficient governance approach.

Despite promoting greater predictability, reducing bureaucratic hurdles, and accelerating procedures, the recently approved bill has raised significant concerns for excessively streamlining the environmental licensing process. Key criticisms include:

• The automatic granting of the License by Adhesion and Commitment (LAC), without prior technical assessment, may compromise the effectiveness of environmental impact control and hinder the implementation of appropriate compensatory measures;
• The automatic renewal of environmental licenses in most cases, that is, without an updated technical review by the competent authority, based solely on a declaration submitted by the project proponent;
• Exempting certain infrastructure and agricultural activities from licensing and specific environmental conditions may result in cumulative negative effects in ecologically sensitive areas;
• The special procedure for strategic enterprises (LAE) raises concerns about transparency and technical rigor in infrastructure projects with high socio-environmental impact;
• The Corrective Operation License (LOC), while enabling regularization and reinforcing state oversight, may, if applied broadly and without strict criteria, encourage informality and weaken environmental accountability—effectively “rewarding” those who initiated their activities in non-compliance with environmental regulations;
• The potential limitation of participation by specialized agencies, such as Funai (National Indigenous Foundation), Iphan (National Institute of Historic and Artistic Heritage), and ICMBio (Chico Mendes Institute for Biodiversity Conservation), by rendering their opinions non-binding for the licensing authority.

Nasser Advogados is closely monitoring developments on this matter and has a team of highly qualified specialists ready to advise and assist clients in all aspects of Environmental Law.