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Brazil, a net exporter of crude oil with one of the greenest energy matrixes in the world, remains nearly self-sufficient in primary energy production. Its state-controlled PETROBRAS has maintained its dominant position both in upstream and downstream hydrocarbons activities. To address fuel sales-related financial losses, in 2016, PETROBRAS, a price setter in the domestic fuels market, implemented a new pricing policy for gasoline and diesel at the refinery gate. Tax incentives for oil and gas exploration and production remain in place. The requirement for a minimum 30% stake of PETROBRAS in pre-salt fields – which together with local content requirements seems to have caused development delays – and PETROBRAS' right to be the sole operator in pre-salt oil reserves were removed in November 2016. Efforts to reform the local content regime in this area are also under way. Biofuel production, an activity subject to cross subsidization elements, continued to be assisted, inter alia, through: support to sugarcane production and fuel flex cars; lending incentives to expand the industrial capacity for sugar and ethanol production; and, increased mandatory blending ratios for both gasoline and diesel. The state owned ELETROBRAS continues to play a major role in the electricity sector and an alternative bidding criterion for concessions of hydropower plants was introduced. Since 2015, a tariff flag system has been applied allowing the monthly pass through of the extra costs of generating thermal energy to consumers. Electricity tariffs, set by the regulator ANEEL, continue to ensure cross-subsidization among different consumer categories; in addition, the tax burden on end-user electricity tariffs remains significant and differs greatly across consumer groups.

Brazil remains open to and encourages inward foreign direct investment (FDI) which is prevalent across the economy despite foreign ownership prohibitions (certain postal services and nuclear energy) or limitations in certain sectors (e.g. air transport, financial institutions, health services, rural land acquisition, broadcasting and publishing media, fishing, mining and hydrocarbons exploration). (...)

(...) Restrictions on foreign investment affect some activities including nuclear power and certain postal services (Table 2.3 and Section 4.4). (...)

Table 2.3 Indicative list of FDI closed and restricted sectors, 2017
Sector/business FDI limitation
A. Closed
(...)
Nuclear energy Wholly closed
(...)

Table 3.6 Import prohibitions, 2017
Product Description Legal basis
Endangered animals and plants Animals and plants listed as endangered by CITES Decree No. 3,607 of 21 September 2001
Hazardous waste Import ban; other movements must follow Basel Convention procedures National Environment Council (Concelho Nacional do Meio Ambiente – CONAMA) Resolution No. 452 of 2 July 2012
(...)
Substances that deplete the ozone layer Prohibited substances in accordance with the Montreal Protocol CONAMA Resolution No. 267 of 11 December 2000
(...)

(...) During 2013-16, the main additions to the list of imports subject to non-automatic licensing included endangered species (some 200 tariff lines) and several manufactured goods (i.e. automotive parts). (...)

(...) According to the authorities, the purpose of non-automatic licensing is to prevent environmental damage and harm to human, plant or animal health, as well as to control imports of products classified as weapons and products subject to tariff quotas or trade remedies. (...)

Brazil maintains export prohibitions for environmental protection reasons, and in compliance with international agreements and United Nations resolutions. The list of export prohibitions includes raw leather of amphibians and reptiles, as well as certain organic chemicals (if exported to non-signatories of the Montreal Protocol). Exports of wood in the rough (HS 4403) are suspended, unless approved by the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA).

Export authorization or licensing requirements remain in place for a relatively large number of products, mainly for safety, health, security, environmental, or native fauna protection reasons. Prior authorization is required for each export shipment, but the authorities note that forthcoming changes in the context of Brazil's Single Window Programme (Section 3.1.1) would relax this requirement, once SISCOMEX is redesigned for differential treatment of export licences and authorizations.

(...) The main product categories requiring prior export authorization include chemicals, pharmaceuticals, wood products, and live animals. (...)