Government launches R$19.3 billion incentive for sustainable vehicles

The federal government published this Saturday (30), in an extra edition of the Official Gazette of the Union, a Provisional Measure that establishes the “Green Mobility and Innovation Program — Mover” which, among other things, provides incentives for sustainable vehicles and for carrying out research for mobility industries. The new MP replaces the Rota 2030 program that emerged through Inovar-Auto, an automotive regime launched by former president Dilma Rousseff (PT).

The text provides for the granting of R$19.3 billion in tax credits, over the next five years, to companies that meet all the program’s requirements. According to the government, initially, R$3.4 billion will be allocated to the program

The credits may be deducted from Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) paid by companies.

When published, the provisional measure has the force of law and comes into force. However, it must be approved by Congress within 120 days to remain in force.

According to the MP, the amount of the tax waiver will be divided as follows:

• 2024 – R$3.5 billion
• 2025 – R$3.8 billion
• 2026 – R$3.9 billion
• 2027 – R$4 billion
• 2028 – R$4.1 billion

The previous program, Rota 2030, which was created in 2018, had an average annual incentive until 2022 of R$1.7 billion and offered a series of tax incentives to the automotive industry in exchange for counterparts, such as investment in Research and Development and reduction of polluting gas emissions.

The Lula government’s current program, Mover, expands the sustainability requirements of the automotive fleet and includes benefits for the mobility and logistics sector as a whole, in addition to covering buses and trucks. It also expands incentives for the production of less polluting vehicles, such as electric, hybrids and other alternative forms of low-carbon propulsion.

The goal is to reduce carbon emissions by 50% by 2030, establishing requirements so that vehicles leave factories more economical, safer and less polluting.

Reward system

With the new program, the government will also implement a reward or penalty system in the collection of Tax on Industrialized Products, based on indicators that take into account:

• the energy source for propulsion;
• energy consumption;
• engine power;
• recyclability;
• structural performance and steering assistive technologies.

According to the MP, the system does not involve tax waivers – as some will pay below the normal rate, but others will pay above. The rates will be defined by presidential decree in the coming months.