The Forgotten Article That Could Change Environmental Licensing
- Aug 11
- 6 min read
On the eve of the "trial of the century" (08/12) concerning the environmental agenda at the Supreme Federal Court (STF), a forgotten provision of the new licensing law seeks to create incentives for companies with better performance and could make ESG a competitive advantage.
This coming Wednesday (08/12), the Supreme Federal Court (STF) is expected to judge in a block the Direct Actions of Unconstitutionality (ADIs 7913, 7916, and 7919) and the Declaratory Action of Constitutionality (ADC 102), defining the fate of the new General Environmental Licensing Law (Law 15.190/2025). As expected, public debate and the initial petitions focus on the most urgent points of friction: new types of licenses, exemptions, flexibilizations, and the autonomy of municipalities, among other items.
However, the so-called "trial of the century" for the Brazilian climate and environmental framework runs the risk of missing a unique opportunity for regulatory modernization. There is absolute silence regarding Article 15 of Law 15.190/2025, one of the least debated provisions of the controversial new law, which, however, carries great potential for a structural reorientation of all environmental and climate legislation.
To understand the urgency of this article, one must face the exhaustion of the current model. Brazil currently operates a command-and-control system (based on the prescription of conduct subject to sanctions) stifled by a lack of personnel, budgetary restrictions, and technological lags in environmental agencies. Added to the illegalities practiced by private agents, this is the perfect storm for organized irresponsibility in the control of enterprises and economic activities of all sizes.
The result of this bottleneck is a regulatory and business environment where technical rigor is lost in bureaucracy. It opens room for corruption (as in the recent cases involving the National Mining Agency - ANM), human rights violations in large projects, and severe tragedies, such as those in Mariana, Brumadinho, and Maceió. The context of effective collection of environmental fines is another dilemma affecting all environmental agencies at all federal levels.
It is in this scenario of practical collapse that Article 15 of the new licensing law emerges not as a loosening (like the several that will be duly assessed by the STF), but as a clear regulatory strategy with potential operational intelligence, in line with what is much discussed in terms of Responsive Regulation.
Regulatory Pyramid in Practice
Responsive Regulation — frequently cited amidst the recent "backlashes" and "to-and-fros" of the ESG agenda — has as its main architects the Australian criminologist John Braithwaite and the American jurist and economist Ian Ayres. The essence of this theory lies in the "regulatory pyramid": a strategy in which the State prioritizes incentives and cooperation at the base for regulated agents of effective performance, results, and good faith, allocating punitive rigor and severe sanctions to the top, against habitual offenders and sensitive, high-risk issues.
The Base of the Regulatory Pyramid (Incentives and Persuasion): This is where dialogue, persuasion, and incentives come in (such as the longer deadlines and simplified rites of Article 15 for those who, for example, present effective environmental and climate governance, risk, and compliance structures, or use clean and renewable technologies). The State cooperates with those who want to cooperate.
The Top of the Regulatory Pyramid (Command and Control): Punitive rigor (the state "big stick," heavy fines, suspension of activities) does not cease to exist; quite the contrary, it is shifted to the top of the pyramid, being applied in a strategic and staggered manner against habitual offenders or in serious cases.
This logic of regulatory strategy is directly related to the text of Article 15 of the new Licensing Law (Law 15.190/2025). The article establishes that, if the entrepreneur/company to be licensed adopts new technologies, voluntary environmental management programs, or measures that exceed the required legal standards, the licensing authority may establish "special conditions" in the licensing process, such as prioritization in analyses, extension of deadlines, and other measures at the discretion of the competent environmental authority.
As much as it may seem, this is not a legislative "jabuti" (a rider). The DNA of this rule already inhabited, timidly, § 3 of Article 12 of the old Conama Resolution 237/1997. What the new law does is nationalize a practice that some states have been establishing, even if without the necessary force, over the last few years. Among the examples, we can cite:
Rio de Janeiro: through State Decree No. 46.890/2019 (SLAM Regulation), the state and Inea provide for maximum validity periods of the Operating License and simplified renewals for companies that prove Cleaner Production (P+L) practices and certifications such as ISO 14001;
Minas Gerais: DN Copam No. 217/2017 fixed "attenuation factors." Enterprises with certified Environmental Management Systems (EMS), or with water and energy efficiency higher than required by law, can lower their procedural risk class, guaranteeing extension of deadlines and reduction in fees;
Paraná: Cema Resolution No. 107/2020 establishes direct incentive rules: activities that prove the maintenance of a certified Environmental Management System (EMS – 14001) have the validity of their Operating License (LO) extended to the maximum legal limit of 10 years.
The logic is crystal clear: by granting a 10-year license (instead of four) to a company that effectively and provably adopts cutting-edge clean technology and is already audited in its governance and compliance structures by independent certifiers, the State can unburden its environmental analysts.
The public apparatus begins to focus its sensitive personnel on the oversight of priority themes, high-risk enterprises, and those with a history of infractions, delegating to the "eco-efficient and high-performance" ones a regime of greater cooperation and coordinated and monitored incentive.
The Death of "Soft" Sustainability
For the financial market and the real economy to make the climate transition, the State's regulatory strategy needs to strengthen the command-and-control action (prescription and sanction) and, at the same time, generate and disseminate the appropriate and correct incentives. The Brazilian regulatory moment, however, has been sending contradictory and worrying signals.
Recently, the Securities and Exchange Commission (CVM) took a dubious step back by revoking the mandatory disclosure of sustainability financial reports (IFRS S1 and S2). By retreating to voluntariness in climate disclosure, the authority exposed an institutional fragility that allows ESG to continue to be a mere marketing exercise for many. Worse: it financially punishes those who invested resources to adapt to the best global practices — exactly the opposite of responsive regulation.
As pointed out by John Elkington, the era of "soft" sustainability — based only on corporate goodwill — is over. Global capital demands (and depends on a) "hard" era, based on materiality, financial restrictions, and accountability, rewarding those who actually deliver results.
It is exactly at this point that Article 15 of Law 15.190/2025 seems to hit the mark. It takes the "E" (Environmental) of ESG and turns it into a tangible procedural and financial asset. It warns the market: environmental excellence is no longer just a "pretty photo" in the annual report; it is the key to faster approvals, lower risk of stoppage, and direct reduction of the cost of capital (Capex) and bureaucracy in the scope of licensing and environmental permits.
The Soy Moratorium and the Power of Disincentive
On the same day, August 12, the STF will also judge the validity of the Soy Moratorium, after having suspended actions that challenged the agreement, with the decision by the Administrative Council for Economic Defense (CADE). This plenary judgment will define the future of this structural pact. While Article 15 of Law 15.190/2025 functions as the state incentive that recognizes good practices, the Soy Moratorium represents the disincentive via the market. This strategic commitment causes traders and financiers to bar production coming from areas deforested in the Amazon after the year 2008.
Both mechanisms follow the logic of responsive regulation, starting from the premise that the traditional "command and control" model, applied in isolation, is insufficient. Effectiveness depends on environmental compliance for the regulated parties generating real advantages, while illegality must result in economic asphyxia and exclusion from global productive chains.
Environmental Licensing as a Climate Regulatory Strategy
Given the extreme climate events, the Brazilian State does not have the necessary speed to impose and oversee technological updates sector by sector, much less allocate fiscal agents to all licensed operations and activities. Responsive regulation reverses this burden, creating an environment for innovation.
If the adoption of a water reuse system, robust and validated ESG indicators, or a drastic reduction in greenhouse gas (GHG) emissions ensures that a multi-billion dollar infrastructure project obtains its license in less time and with greater legal certainty, companies' CFOs will begin to see environmental technology as the especially profitable investment of the business. With metric criteria and effective state coordination of monitoring and control, there are no reasons to dismiss such a perspective.
The STF has in its hands the opportunity to modulate the country's environmental regulatory future, balancing and returning security and rigor to licensing. However, examining the constitutionality of Law 15.190/2025 also requires evaluating the best paths for the state's environmental and climate regulatory strategy.
Environmental licensing, as the most important regulatory instrument in force, needs to stop transitioning between a mere registry office that attests to liabilities and a conflicting operational giant, to assume its definitive role: the greatest and most strategic motor of regulation and innovation for sustainability and climate transition for national development.
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Author: Bruno Teixeira Peixoto.
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