Bill on Environmental Licensing (Bill No. 2159/2021) – A critical analysis of its debates, vetoes, and transformation into Federal Law (Law No. 15,190/2025)

Bill on Environmental Licensing (Bill No. 2159/2021) – A Critical Analysis of its Debates, Vetoes and Transformation into Federal Law (Law No. 15,190/2025)

I – Preliminary Considerations

Environmental licensing in Brazil is one of the instruments of the National Environmental Policy, instituted by Law No. 6,938/1981, aimed at reconciling economic development with environmental protection. Over the decades, however, the process has been the subject of intense debate and criticism, both for its complexity and delays and for its effectiveness in preventing environmental damage.

In this context, Bill No. 2159/2021, which proposes general rules for environmental licensing—many of which have already been practised by several subnational federative entities—has emerged as one of the most controversial and debated issues in the Brazilian political and legal arena. Labelled by its critics as the “Deforestation Bill”, the proposal has triggered heated discussions regarding its potential impact on environmental legislation and the protection of Brazilian ecosystems. This article seeks to provide a critical analysis of Bill No. 2159/2021, demystifying the pejorative epithet and offering a technical and legal approach to its main provisions, based on references and relevant judicial decisions.

1.1 Preliminary Analysis: A Current View of Environmental Licensing in Practice

As outlined, environmental licensing was established as an instrument for the approval and review of activities with actual or potential polluting effects. Since then, its scope and purpose have undergone several reinterpretations, resulting today in an extremely complex and multifaceted process that often transcends the mere assessment of the environmental feasibility of a project.

In many regions—particularly in poorer municipalities—the omission of the public authorities in fulfilling their constitutional duty to ensure basic living conditions has led to the expectation that environmental licensing should address basic needs, equating it with public policy instruments that ought to be developed by local and regional governments.

Because of its multidisciplinary profile, environmental licensing is regulated by a multitude of legal, regulatory and infra-legal provisions, forming a complex regulatory framework comprising laws, decrees, ordinances, normative instructions and resolutions, not to mention the specific rules of each state, which further increase the complexity and variability of the process.

In addition to this intricate network of regulatory norms, a significant number of actors participate in the licensing process, such as:

• National Institute for Colonisation and Agrarian Reform (INCRA);

• National Foundation for Indigenous Peoples (FUNAI);

• National Institute of Historical and Artistic Heritage (IPHAN), as well as respective state and municipal authorities;

• Palmares Cultural Foundation (FCP);

• Chico Mendes Institute for Biodiversity Conservation (ICMBio);

• Civil Defence and Fire Department.

These institutions are designated as intervening bodies, whose opinion on the project is expected. States and municipalities affected by the project also participate, with municipalities issuing certificates attesting that the implementation and operation of the project does not conflict with municipal land use and zoning laws.

Finally, the Public Prosecutor’s Office (MP) plays a central role, holding the prerogative to bring public civil actions (ACPs) before the Judiciary whenever it deems the administrative licensing procedure to be inconsistent with applicable legislation. Such actions may result in the suspension of licensing procedures and, ultimately, in the annulment of licences already granted.

In addition to being complex, the process suffers from shortcomings such as: lack of structure and human resources in the licensing agencies; unpredictability of deadlines; poor quality of environmental studies submitted; excessive socio-economic demands unrelated to environmental impacts; accountability of public officials; and the judicialisation of licensing procedures.

1.2 The “Deforestation Bill”: Critical Analysis of a Label

The epithet “Deforestation Bill”, attributed to Bill No. 2159/2021, reflects the apprehension of civil society organisations, the scientific community and legal scholars regarding the potentially deleterious effects of the proposed legislation on the existing environmental protection regime. Criticism focuses particularly on provisions that could represent a normative regression by excessively relaxing the legal requirements for environmental licensing, thereby undermining mechanisms of environmental control and prevention.

Such concerns, however, must be examined from a sound legal-technical perspective, capable of overcoming polarised rhetoric and providing a qualified critique of the proposed normative content.

The main reasons underlying the label “Deforestation Bill” and sustaining the criticism directed at the bill’s content include:

• Exemptions from licensing: exclusion of certain agricultural activities and infrastructure works from licensing requirements, raising concerns over potential significant impacts without prior assessment or control, thus compromising the principles of prevention and precaution.

• Expansion of the Adhesion and Commitment Licence (LAC): originally conceived for low-impact activities, the self-declaratory LAC would be extended to medium-impact projects, raising concerns about the effectiveness of licensing and risks of automatic approval without proper environmental safeguards.

• Creation of the Special Environmental Licence (LAE): designed for strategic projects, with shorter deadlines and exemption from in-depth impact studies, potentially jeopardising the assessment of cumulative and synergistic socio-environmental impacts.

• Normative fragmentation: by allowing states and municipalities to establish their own licensing typologies, the bill could foster regulatory fragmentation and a “race to the bottom” among subnational entities seeking to attract investment.

• Institutional weakening and reduced social participation: concerns over diminished roles for environmental authorities and limited public involvement, affecting transparency and democratic oversight.

Defenders of Bill No. 2159/2021 argue that the proposal aims to modernise and streamline licensing, providing greater efficiency, predictability and legal certainty, and that the current system is excessively slow and bureaucratic, hampering strategic sectors of the economy.

II – Technical and Legal Approach to Bill No. 2159/2021

2.1 Environmental Competences and Brazilian Federalism

One of the core issues in the licensing debate is the distribution of environmental competences among the Union, states and municipalities. The 1988 Federal Constitution establishes concurrent legislative and administrative competences in environmental matters, often resulting in conflicts and overlaps. Complementary Law No. 140/2011 sought to harmonise these competences, enshrining the principle of subsidiarity and decentralisation.

Bill No. 2159/2021, by enabling subnational entities to establish licensing typologies, ostensibly respects this autonomy. Critics, however, warn of risks of non-uniformity and excessive regulatory relaxation across regions.

2.2 The Adhesion and Commitment Licence (LAC) and STF Case Law

The LAC, introduced in Bahia in 2011, was intended for low-complexity, low-impact activities, with predictable effects and standardised control measures. It has been upheld by the Federal Supreme Court (STF) as constitutional when restricted to low-impact projects, provided the principles of prevention and precaution are safeguarded. However, the Court has been restrictive regarding its application to medium- and high-impact projects (cf. ADIs 6.808/DF and 6.618/RS).

Accordingly, the proposed expansion of the LAC to medium-impact activities under Article 8 of Bill No. 2159/2021 has raised concerns about legal uncertainty and potential unconstitutionality. Nonetheless, the bill includes safeguards such as requirements of compliance with the Environmental Rural Registry (CAR), adherence to the Environmental Regularisation Programme (PRA), and explicit retention of environmental agencies’ supervisory powers.

Thus, the legal debate over the LAC demands a balanced approach, reconciling STF jurisprudence on procedural simplification with statutory provisions ensuring environmental safeguards.

2.3 Other Critical Points and the Need for Balance

Other contentious aspects include exemptions for agricultural and infrastructure activities, the risk of project “fragmentation” to circumvent stricter licensing, and absence of provisions on climate change and strategic environmental assessment. Critics also highlight amendments potentially weakening prior controls in sensitive areas.

The overarching challenge is to strike a balance between administrative streamlining and the constitutional duties of environmental protection, prevention and public participation.

III – Presidential Vetoes to Bill No. 2159 and the Enactment of Federal Law No. 15,090/2025

Law No. 15,090, enacted on 8 August 2025, incorporates significant presidential vetoes (63 in total). Three central themes stand out:

1. Decentralisation and federative autonomy – Vetoes curtailed provisions allowing each federative entity to define activity size, polluting potential, and licensing procedures. Critics argue this undermines subsidiarity and local empowerment.

2. Simplified/special licences for low-impact projects and infrastructure – Vetoes removed specific provisions on streamlined procedures, despite their potential for increased efficiency without relaxing standards.

3. Proportionality of environmental conditions and compensatory measures – Vetoes struck down provisions ensuring that licensing requirements must be proportional to identified impacts, raising concerns over the transfer of state responsibilities onto private actors.

   
   

IV – Conclusion

Bill No. 2159/2021, known as the “Deforestation Bill”, represents a complex attempt to reform environmental licensing in Brazil. While its intent to modernise and reduce bureaucracy is legitimate, critics rightly caution against risks of normative regression.

For environmental licensing to fulfil its constitutional role of reconciling development and sustainability, reforms must be grounded in sound technical criteria, adherence to constitutional principles and broad public participation. The balance between procedural efficiency and effective environmental protection is essential for a sustainable future.