Brazil

Antitrust Law and Climate Change

Executive summary

Brazil, with its vast territory with native forest and rich biodiversity on one hand and robust agricultural sector that contributes significantly to its GDP on the other, has seen climate change as one of the central topics in public debates. In recent years, the issue has gained increasing prominence, reflecting both global concerns and the rise of climate-related environmental disasters locally.

To date, the intersection of climate change and Brazilian Competition Law has been debated in academic and policy circles, featuring in transactions and investigations analysed by the Brazilian Competition Authority, the Administrative Council for Economic Defense (CADE). Even though CADE has not yet formally issued clear guidelines to provide legal certainty on the boundaries of cooperative initiatives among competitors on sustainability goals, it is a fact that the authority has approached these initiatives with the same technocrat orientation it does in ordinary cases: does a particular collaborative agreement result in unlawful restriction to competition?

This stance has been recently reaffirmed in key cases with an environmental aspect, with the authority signalling a conservative approach to agreements among competitors that involve the exchange of sensitive information or production agreements, raising uncertainty on the developments of the issue.

How climate change is impacting antitrust law

Companies seeking to form partnerships and/or develop innovative solutions to reduce their environmental impact may encounter challenges under the Brazilian Competition Law, particularly in the areas of merger control and investigations.

Currently, there are no specific guidelines or safe harbours in Brazilian Competition Law for environmental or ESG-related initiatives. While CADE may consider sustainability-related justifications or efficiencies as part of its analysis, there is no indication that such elements necessarily carry special weight compared to other economic considerations, or constitute themselves a sufficient economic rational to justify a restraint to competition.

As a result, collaborations aimed at promoting sustainability are subject to general antitrust rules and undergo the same . CADE has emphasized that it lacks the jurisdiction to evaluate other societal benefits of sustainability agreements in recent decisions and public statements. For example, joint efforts to eliminate supply chains associated with deforestation or establish industry-wide sustainability standards could be viewed as anticompetitive if they result in market allocation, sharing of sensitive information, or output restrictions.

This legal landscape creates uncertainty for the future of sustainability-focused collaborations which may be seen as affecting competition, underscoring the gap between Brazil’s constitutional commitment to environmental protection and the current enforcement of competition law.[1]

Lack of Environmental Guidelines

A primary source of uncertainty surrounding the enforcement of competition law in relation to environmental issues is the lack of specific guidelines from CADE. So far, CADE’s decisions remained focused on traditional competition metrics, effectively excluding environmental considerations from its assessment. This approach contrasts with those adopted in other jurisdictions, such as the European Union[2] and Japan[3], which have been working to integrate environmental factors into their antitrust frameworks.

Commissioner Victor Fernandes has publicly acknowledged this issue, highlighting the need for CADE to provide guidance, even in the form of “soft law” mechanisms like guiding notes. He has emphasized that the majority of sustainability agreements would not raise antitrust concerns and that CADE should signal its understanding to the market through its case analyses[4]. Still, on an institutional level, CADE appears to recognize that broader social objectives, such as environmental protection, should not be compromised within the scope of competition law objectives. This reinforces an orthodox approach to viewing the limits and scope of antitrust in Brazil.

CADE recent decisions in investigations and merger reviews related to sustainability measures

CADE has had the opportunity to analyse agreements involving sustainability concerns on a few occasions, both in merger reviews and investigations of alleged anticompetitive conducts. Cases as such are not recent, with the first prominent discussions appearing in transactions aiming at implementing legal obligations of the so-called National Solid Waste Policy (Law No. 12.305/2010).[5] More recent discussions have risen as a result of initiatives aiming at sharing data across supply chains for monitoring purposes; as well as possible restraints concerning the implementation of productive standards and adverse environmental consequences brought as arguments to challenge mergers submitted to CADE.

• The Soy Moratorium Case[6]: The Soy Moratorium is a landmark commitment agreed among soy traders – later endorsed by the Brazilian Federal Government – to avoid purchasing soybeans, by soy traders, which are grown in areas of the Amazon deforested after 2006. While this initiative has been widely successful in hindering agricultural expansion from deforestation and encouraged by environmental groups and international buyers, CADE’s Superintendent General (SG) – its lower investigative unit – has recently initiated an investigation regarding such form of collaboration among competitors based on claims alleging that the initiative resulted in coordinated refusal to trade. Citing concerns about the participating companies’ collective market power – indicating they would allegedly control over 90% of soybean purchases in the Amazon region – the SG issued a provisional decision to suspend the moratorium. This action, however, was judicially overruled in a writ of mandamus, with the court provisionally[7] deeming CADE’s action “disproportionate and premature.” The judicial decision held that the moratorium is a valid instrument for promoting sustainable development. The case is still ongoing, and CADE’s Tribunal is set to rule confirm or reverse SG’s provisional measure.[8]
• SustainIt / Cargill / Louis Dreyfus Company / ADM Merger Review:[9] In this landmark merger case involving a joint venture among major agricultural trading companies to create a global platform for tracking and applying supply chain sustainability metrics, CADE’s clearance decision was focused exclusively on traditional antitrust concerns. Rather than restricting the assessment to the benefits and rational of the sustainability goals underlying the venture, CADE expressed concerns that the initiative could potentially restrict access to players in market, should the agreeing parties discriminate against other entities along the value chain. The authority was also concerned that the initiative could lead to the widespread sharing of sensitive information among these parties. As a result, approving the sustainability initiative was conditioned to an antitrust protocol to ensure open and non-discriminatory access and data safeguards. As such, while not denying the relevance of the sustainability rational, CADE explicitly recognized that “a commitment to sustainable objectives does not constitute a competitive exemption for engaging in anticompetitive practices.”[10] CADE’s President also stated that the authority’s role should be strictly focused on competition matters, and therefore, sustainability would fall outside CADE’s jurisdiction.
• Brasil Bio Fuels / Biopalma Merger Review:[11] In the Brasil Bio Fuels/Biopalma merger case, CADE dismissed a series of environmental concerns raised by third party Marborges Agroindústria S.A. The third-party essentially claimed that Biopalma was involved in legal proceedings due to the contamination of water sources and consequently propagation of health issues among local communities. CADE did not conduct an in-depth analysis of these environmental aspects, clarifying that its mandate is limited to competition analysis. The authority deemed those environmental and judicial contingencies, while relevant to the deal’s valuation, to fall outside the scope of its antitrust review.[12]

The cases described above highlight the legal tension between private initiatives with sustainability purposes that involve agreements among competitors and antitrust enforcement in Brazil.

The ongoing and high-profile investigation into the soy moratorium is expected to prompt CADE to conduct a detailed analysis of the efficiencies and public interest associated with sustainability measures. It may also lead the authority to adopt a clearer stance on the intersection between antitrust enforcement and environmental policy.

How antitrust law can help to address climate change

The current lack of formal guidance from the Brazilian antitrust authority on environmental policies – and the strict approach towards agreements among competitors, even when they are related to climate change or sustainability issues – creates significant legal uncertainty which may discourage companies from collaborating to address these challenges. However, legal scholars and CADE officials have been advocating for deeper discussions on the topic.

In an article concerning the SustainIt/Cargill case,[13] Commissioner Victor Fernandes  proposed a “pragmatic model” for “agnostic” antitrust jurisdictions, suggesting that authorities should focus on mitigating competitive risks while ensuring that green initiatives do not unduly restrict competition. This approach reinforces the idea that sustainability and competition can be complementary when appropriate safeguards are in place.

Given CADE’s lack of formal guidance on this matter, relevant stakeholders have taken action to address the gap. For instance, the Competition Commission of ICC Brasil, the Brazilian branch of the International Chamber of Commerce, published a document that not only urges CADE to issue guidelines on the topic but also provides its own views on how environmental sustainability agreements could be deemed compatible with Brazilian Competition Law.[14]

Future Trends

CADE is expected to face increasing pressure as climate change gains prominence and companies are compelled to adjust their operations to comply with international regulations and respond to pressure from consumers and environmental groups. Since some of the measures needed to reduce emissions and avoid deforestation are costly and may create competitive disadvantages for individual adopters, it is anticipated that competitors will seek agreements and joint commitments to mitigate their risks in this area.

In addition, the Brazilian federal government has demonstrated that climate change is a key item on its agenda. As a result, it may exert pressure on CADE to be more attentive to the issue and less strict regarding agreements adopted for sustainability purposes.

The first – and likely most important – next step in this direction will be the discussions surrounding the landmark Soy Moratorium case. The original agreement was encouraged by the Federal Government and enjoyed broad support among key stakeholders but have been lately questioned by associations of soy farmers. Indeed, simply declaring the initiative unlawful may lead to increased deforestation in the Amazon ecosystem, while maintaining the status quo could result in a form of immunity to alleged collusive agreements with sustainable goals. Given the highly contentious stakes involved, this case will likely demonstrate how CADE might position itself as a mediator between competition and environmental concerns, hence pushing CADE toward articulating a clearer position.

[1] Melo, Lílian de. A relação entre antitruste e sustentabilidade. Available at: https://www.conjur.com.br/2021-mai-17/lilian-melo-relacao-entre-antitruste-sustentabilidade/. Accessed on September 2, 2025.

[2] See European Commission. Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European  Union to Horizontal Co-operation Agreements – Section 9. Brussels: European Commission, 2023. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52023XC0721(01). Accessed on September 2, 2025.

[3] Japan Fair Trade Commission (JFTC). JFTC’s Green Guidelines. Tokyo: JFTC, 2024. Available at: https://www.jftc.go.jp/en/pressreleases/yearly-2024/April/240424EN2.pdf. Accessed on September 2, 2025.

[4] Fernandes, Victor (Commissioner). Antitrust and Sustainability. Interview conducted by Women in Antitrust (WIA) in partnership with ICC Brazil, 2025.

[5] E.g. Administrative Council for Economic Defense (CADE). Merger Case No. 08700.005278/2014-00. Parties: Sindicato Nacional das Empresas Distribuidoras de Combustíveis e de Lubrificantes; Petronas Lubrificantes Brasil S/A, among others. Brasília: CADE, 2014; Administrative Council for Economic Defense (CADE). Merger Case No. 08700.009764/2015-70. Parties: Alumbra Produtos Elétricos e Eletrônicos Ltda.; LPS Distribuidora de Materiais Elétricos Ltda.; Braft do Brasil Importação e Exportação Ltda., among others. Brasília: CADE, 2015.

[6] Administrative Council for Economic Defense (CADE). Merger Case No. 08700.004428/2020-06. Parties: Brasil Bio Fuels S.A. and Biopalma da Amazônia S.A. Reflorestamento, Indústria e Comércio. Brasília: CADE, 2020.

[7] The reversion occurred by a provisional measure imposed by the competent Court.

[8] It’s worth noting that this case has been extremely politicized in Brazil, not only due to the tension between competitive and environmental ends, but also because of the significant role of soy production domestically and the involvement of large agribusinesses.

[9] Administrative Council for Economic Defense (CADE). Merger Case No. 08700.009905/2022-83. Parties: SustainIt Pte Ltd, Cargill, Incorporated, Louis Dreyfus Company Participations B.V., and ADM International Sarl. Brasília: CADE, 2022.

[10] Administrative Council for Economic Defense (CADE). Decision of Reporting Commissioner Sérgio Ravagnani in Merger Case No. 08700.009905/2022-83. Parties: SustainIt Pte Ltd, Cargill, Incorporated, Louis Dreyfus Company Participations B.V., and ADM International Sarl. Brasília: CADE, 2022.

[11] Administrative Council for Economic Defense (CADE). Merger Case No. 08700.004428/2020-06 – Brasil Bio Fuels S.A. and Biopalma da Amazônia S.A. Reflorestamento, Indústria e Comércio. Brasília: CADE, 2020.

[12] Administrative Council for Economic Defense (CADE). Decision of Reporting Commissioner Maurício Bandeira Maia in Merger Case No. 08700.004428/2020-06 – Brasil Bio Fuels S.A. and Biopalma da Amazônia S.A. Reflorestamento, Indústria e Comércio. Brasília: CADE, 2020.

[13] Fernandes, Victor (Commissioner). Brazil’s CADE Demonstrates How Antitrust Authorities Can Pursue Sustainability Goals. Available at: https://www.promarket.org/2023/08/02/brazils-cade-demonstrates-how-antitrust-authorities-can-pursue-sustainability-goals/. Accessed on September 2, 2025.

[14] International Camber of Commerce (ICC Brasil). Concorrência e Sustentabilidade: proposta de diretrizes para a análise de acordos de sustentabilidade ambiental pelo CADE. São Paulo: ICC Brasil, 2024. Available at: https://www.iccbrasil.org/wp-content/uploads/2024/04/Working-Paper-Concorrencia-e-Sustentabilidade_V5.pdf. Accessed on September 2, 2025.