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19. (...) Agricultural zoning requirements continue to link agricultural support to environmental sustainability. They condition producers' eligibility for concessional credit and subsidized insurance programmes. In addition, several specific programmes for both the commercial and family farming segments promote sustainable agricultural practices; they include credit for plantings on unproductive and degraded soils, credit for forest planting, and credit to modernize production systems and preserve natural resources.

20. (...) Domestic support for developing mining companies and sustainable technologies through an Inova Mineral joint initiative on credits, subsidies, cooperation projects between institutions and companies is available to selected firms. (...)

21. Brazil remains a net exporter of crude oil and importer of refined oil products. Its energy matrix continued to be considered one of the greenest in the world. (...) Brazil's 2017 National Biofuels Policy (RenovaBio) to support reaching the country's climate goals has been in line with its COP21 commitments. In its third year of full operation, RenovaBio has been consolidating itself as one of the largest decarbonization programmes for the fuel matrix in the world. Brazil retained its position as the world's second-largest producer and exporter of ethanol with a mandatory ethanol blend ratio fixed at 27%; in addition, other support measures for the production and consumption of ethanol, such as credit facilities and tax differentiation and cross-subsidization, remain in place. Brazil is the world's third-largest producer of biodiesel; the mandatory blending ratio of biodiesel added to oil diesel has increased, and their production continues benefiting from incentives and a regulated domestic market. (...)

1.3. (...) The annual average GDP growth rate for the period 2017-21 stood at 1%, an increase compared to the average of -0.4% in 2012-16. On the one hand, according to the World Bank and other analysts, the path to a full recovery in the medium term remains steep due to structural and fiscal vulnerabilities, the impact of resurgence of inflationary pressures (Section 1.2.3.2), and the exceptional drought reducing hydroelectricity generation and damaging the agricultural sector. (...)

1.6. (...) Since January 2021, inflation exceeded the upper limit of the tolerance band of the inflation target. According to the Central Bank of Brazil (BCB), the main drivers for this move were: (...) (ii) water scarcity electricity tariff flag (...)

1.12. (...) According to the authorities, from 2017 to 2022, two directly owned companies (Codesa and Eletrobras) were privatized, two were liquidated (Codomar and Casemg), and one (Ceitec) is under liquidation. Moreover, in the same period, divestments (i.e. selling subsidiary assets, investments, or divisions of a company) largely targeted the energy sector and included 98 directly and indirectly owned state-owned enterprises (SOEs), inter alia involving: (i) BR Distribuidora, the largest distributor and trader of petroleum derivatives and biofuels (ethanol) in Brazil and Latin America (...)

Table 1.5. Foreign direct investment (equity) outflows, 2017-21 (USD million): (...)
By % of total GDP:
Industry: (...) Coke, oil derivatives and biofuels: (2017) 46.0, (2018) .., (2019) 0.1, (2020) .., (2021) 0.0
(...)

1.26. (...) In 2021, the main foreign direct investment (FDI) recipients were (...) industry (e.g. (...) biofuels) (Table 1.6). (...)

Table 1.6. Foreign direct investment (equity) inflows, 2017-21:
By % of total GDP:
Industry: (...) Coke, oil derivatives and biofuels: (2017) 0.6, (2018) 0.7, (2019) 0.7, (2020) 0.5, (2021) 4.1
(...)

2.14. Overall, according to the Inter-American Development Bank (IDB), Brazil's economic strategy for the period 2019-22 has been structured into four key areas: (i) improve the business climate and narrow gaps in infrastructure for enhanced competitiveness; (ii) promote national and international integration to boost productivity; (iii) build a more effective public sector that promotes fiscal sustainability; and (iv) reduce social inequality and lack of opportunities by enhancing public policy efficiency. The strategy was to address challenges related to gender and diversity, environmental sustainability and climate change, and innovation and digital transformation.