In less than ninety days, between early April and the end of May, three structural decisions advanced almost simultaneously, across different ministries: the National Energy Policy Council (CNPE) approved the biomethane mandate target; the National Agency of Petroleum, Natural Gas and Biofuels (ANP) completed the regulation of the Biomethane Guarantee of Origin Certificate (CGOB); Aneel and the Energy Research Office (EPE) concluded the largest capacity reserve auction in the country’s history; and the Ministry of Finance presented the proposed sectoral coverage of the regulated carbon market to the SBCE Technical Committee.
Each of these decisions, taken individually, would already be relevant news. Together, they represent a turning point that changes the risk and opportunity map for any investor or executive operating in clean energy, biogas, biomethane, sanitation with energy generation, or waste-to-energy projects.
This article analyzes each of these movements and what they mean through the end of 2026.
The deadlock was resolved on April 1, 2026. The National Energy Policy Council (CNPE) approved the resolution defining a 0.5% greenhouse gas emissions reduction target for the natural gas market in 2026, to be met by producers and importers through the share of biomethane in their consumption, in accordance with the Fuel of the Future Law. GOV.BR
The percentage was a deliberate middle ground. According to the Ministry of Mines and Energy (MME), the 0.5% target seeks to balance technical feasibility, regulatory predictability, and incentives for market development. The CNPE also created a Biomethane Market Monitoring Roundtable, under the umbrella of the Fuel of the Future Technical Committee, to track supply evolution and pave the way for increasing the target toward the legal floor of 1%.
Even before this CNPE decision, the ANP had already completed the technical portion. ANP Resolution No. 995/2026 establishes that natural gas producers and importers that produce or import an average annual volume above 160,000 cubic meters will be subject to mandatory individual targets under the Program, in a model similar to the one adopted by RenovaBio. Compliance with the targets will occur through the retirement of Biomethane Guarantee of Origin Certificates (CGOB).
Under the legislation, compliance with the decarbonization target may occur through the purchase or direct use of biomethane or through the acquisition or trading of CGOBs, the certificate recently regulated by the ANP.
What does this mean in practice? Biomethane has moved beyond being a long-term bet and has become a commodity with regulated demand starting in 2026. Biomethane producers, whether using landfill gas, vinasse, agro-industrial waste, or sewage, now have an institutional buyer with a legally binding compliance target. Recent data indicate that the sector ended 2025 with 23 biomethane production units either under construction or already completed, awaiting ANP authorization to begin operations.
The immediate challenge is infrastructure and certification: the individual 2026 targets will be published by the ANP after the first CGOB is issued. This mechanism creates a race for the first certificates, and projects that are ready during the initial window will have a positioning advantage in contracts with distributors and importers.
The auction was designed to respond to a growing concern: Brazil’s electricity matrix has become predominantly renewable and, therefore, dependent on climate variables. Wind and solar expansion accelerated, but it created a shortage of firm capacity for moments of low generation. LRCAP emerges as a structural solution to this problem.
The auction introduces a new contractual logic based on the procurement of capacity with flexibility requirements, replacing previous models structured around energy. This change allows resources to be dispatched only when needed, increasing dispatch efficiency and reducing operating costs associated with the system’s historical inflexibilities.
In total, approximately 16.7 GW in thermoelectric plants and 2.5 GW in hydropower expansions were contracted, at an average price of R$ 2,334,731 per MW per year, with an average discount of 5.52%, involving investments of around R$ 64.5 billion.
The unprecedented inclusion of expansions to existing hydropower plants deserves attention. The capacity reserve auction may contract an increase in hydropower generation of 5.03% compared with the existing installed capacity of 109,103.5 MW, a potential that can be achieved without the construction of any new plant larger than 50 MW over the next five years. This is a vector for expanding firm clean energy that does not require new dam licensing, a relevant regulatory advantage for investors concerned about environmental and approval risks.
The question left open by the auction, however, is legitimate and cannot be ignored. The result provides an immediate response to a legitimate concern, the security of the electricity system, but raises doubts about the quality of the planning adopted and the cost that will be imposed on the country in the coming years. Brazil contracted approximately 19 GW of capacity, with a strong predominance of natural gas-fired thermoelectric plants, which accounted for approximately 80% of the capacity, in addition to the participation of coal-fired plants and hydropower expansions. Blog do Barreto
For the clean energy sector, this result has two sides. The positive side: it creates systemic stability that enables further renewable expansion without the risk of collapse. The negative side: it commits the system to a carbon-intensive backup matrix for 10 to 15 years. The debate over the carbon intensity of this capacity reserve will gain momentum as soon as the SBCE comes into force and gas-fired thermoelectric plants are required to report their emissions starting in 2027.
For each incorporated sector, the proposal establishes a progressive four-year timeline: in the first year, companies will prepare their monitoring plans; over the following two years, they will carry out the effective monitoring of their emissions; and, at the end of the cycle, in the fourth year, the National Allocation Plan will be developed.
The most relevant point for the clean energy sector lies in the second phase. The simultaneous inclusion of waste and the power sector in 2029 creates an important dynamic: on one side, more polluting energy generators will have to measure and, in the future, pay for their emissions; on the other, projects that generate energy from municipal solid waste will have the possibility of generating verifiable carbon credits within a regulated system, rather than only in the voluntary market.
The government expects to publish the final regulation still in 2026, with implementation beginning in 2027. The next critical step is the public consultation, scheduled for July 2026. For investors, this is the moment to analyze the proposal, identify sectoral impacts, and, when relevant, take part in the consultation with technical contributions that may help shape the final text.
The average carbon price reached approximately US$ 21 per metric ton of CO2 equivalent, reflecting a 7% increase from the previous year.
Brazil currently represents a paradox in this scenario: it has one of the cleanest electricity matrices in the world, it is the country with the greatest potential to produce biomethane from agro-industrial waste, and it was the first country in the Southern Hemisphere to enact a regulated carbon market law, yet it still does not charge a single ton of CO2 from any sector. The system is expected to become fully operational in 2030 or 2031.
This interval has a technical name: a preparation window. And it is closing faster than many sectors realize.
The biomethane mandate creates regulated demand for those producing energy from waste. LRCAP 2026 provides stability to the system, enabling the expansion of renewables. The SBCE, once operational, will price emissions that currently impose no financial cost on emitters. The Climate Fund finances the transition with the largest volume ever mobilized in the history of the instrument.
The risk does not lie in any one of these instruments individually. It lies in the overlap of deadlines, in the capacity for regulatory execution, and in the maturity of the projects that will need to take advantage of these windows at the same time.
For those investing in the clean energy sector, the map became clearer in 2026 than at any point in the past five years. Acting with structured information, and not merely with enthusiasm for the ESG agenda, is what will separate the projects that capture value from those that are left behind.
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