The Brazilian Institute of Environment and Renewable Natural Resources (Ibama) has definitively rejected the preliminary environmental license request for the São Paulo Thermoelectric Plant, a 1.74 GW gas-fired project in Caçapava, São Paulo, planned by Termelétrica São Paulo Geração de Energia Ltda. The decision concludes a protracted licensing process marked by technical deficiencies, legal challenges, and local opposition. The rejection signals a stricter environmental regulatory stance impacting large fossil-fueled energy projects in Brazil’s evolving energy matrix.
Ibama’s decision on January 21, 2026, was based on unresolved technical gaps in the Environmental Impact Study and Environmental Impact Report (EIA/Rima) submitted by the project developer, Natural Energia. Despite two formal requests for additional information and document revisions, over two-thirds of the agency’s 152 technical demands went unmet or only partially addressed. Key shortcomings cited included inadequate justification for site selection, unreliable data on local water availability, insufficient assessments of thermal pollution effects, air pollution modeling, and incomplete evaluations of impacts on local flora, fauna, and socio-economic conditions. Proposed mitigation and compensation programs were also deemed insufficient. Additionally, the municipal land use certificate presented was expired, hindering a final assessment of the project’s locational compatibility.
The proposed 1,743.8 MW plant would have been Brazil’s largest thermoelectric facility, surpassing the current leader, the 1.67 GW GNA II in Rio de Janeiro. It was expected to consume approximately 1.56 million liters of water daily and emit an estimated 6 million tons of CO2 annually, raising environmental and public health concerns. The project faced opposition from environmental groups, public prosecutors, and local residents of the Vale do Paraíba region, highlighting risks such as air pollution, climate impact, and strain on water resources in a geographically sensitive valley.
Following the rejection, Ibama formally archived the licensing process with no possibility of appeal, although the developer may submit a new application if they wish to proceed. The decision establishes a precedent for thorough environmental scrutiny of large-scale fossil fuel projects in Brazil amid the nation’s commitments to climate and water security. Industry observers interpret this outcome as indicative of heightened regulatory rigor and increasing influence of socio-environmental considerations in Brazil’s energy infrastructure approvals.
