By Brazil Stock Guide – Brazil’s environmental watchdog Ibama has rejected the environmental license for the São Paulo Thermoelectric Power Plant, a gas-fired facility planned for the city of Caçapava, in the Vale do Paraíba region of São Paulo state. The project was designed to become the largest thermoelectric plant in the country, with installed capacity of 1,743.8 megawatts.
The decision was communicated to the developer on Wednesday (Jan. 21) after technical reviews concluded that unresolved issues in the Environmental Impact Study and its accompanying report prevented regulators from confirming the project’s environmental feasibility. Ibama said it was unable to “attest to the locational compatibility of the project,” a key requirement for federal environmental approval.
The licensing process had already faced setbacks. In late January 2024, Brazil’s federal court in São Paulo suspended the environmental review following a request from federal prosecutors. After the case resumed, Ibama required two rounds of revisions to the environmental studies submitted by Natural Energia, the company behind the project announced in 2022.
According to the agency’s technical staff, neither revision met regulatory standards. Ibama’s licensing directorate recommended denying the permit and shelving the process, a position later endorsed by Ibama President Rodrigo Agostinho.
Regulators found that the company failed to justify why Caçapava was the most suitable location for the plant and did not provide sufficient assurances regarding water availability for operations. The review also pointed to weaknesses in air pollution forecasts, gaps in waste management plans and incomplete data on potential impacts to local fauna and flora. Proposed environmental compensation measures were also deemed inadequate.
“The denial of the license for the São Paulo thermoelectric plant shows that the environmental authority applied rigorous technical criteria and blocked a project that failed to demonstrate environmental viability, even after multiple opportunities to provide additional information,” said Juliano Bueno de Araújo, president of the International Arayara Institute.
If approved, the plant would have surpassed Brazil’s current largest thermoelectric project, located at Porto do Açu on the northern coast of Rio de Janeiro state, which has capacity of 1,672 megawatts. That facility is still awaiting government power auctions and is scheduled to begin operations in 2028.
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