Brazil's lower house of Congress approved legislation this week establishing a special sustainability program for the chemical industry, known as Presiq, with expected incentives of R15bn ($2.79bn) over five years.
The initiative outlined in bill 892/2025 — which must still be approved by the Senate — will use targeted incentives and modernization projects to strengthen and enhance the competitiveness to Brazil's chemicals sector globally and reduce its dependence on imports.
The program could generate up to 1.7mn jobs, contribute R112bn to GDP, and increase tax revenues by R65.5bn, according to government estimates. Presiq will operate under two models: an industrial model based on the type of products a company acquires; and an investment model that targets expanding petrochemical industries production capacity, especially through new facilities using natural gas to produce fertilizers.
Companies participating in the program may receive financial credits if they invest in research and development.
The bill is an extension and replacement of law 11.196/2005, which provides R1bn in support for the chemicals industry through the Reiq program through December 2026.
[Reiq, set to expire in December 2026, is a fiscal incentive mechanism that reduces VAT-like PIS/Pasep and Cofins federal taxes on feedstocks used in chemical and petrochemical production, immediately lowering operational costs for qualifying companies. In contrast, Presiq is a broader industrial policy framework, intended to succeed Reiq with a more strategic focus.]
The vote took place one week after the release of a joint declaration signed by more than 30 national industrial trade groups. The declaration described Presiq as "a concrete response to the loss of competitiveness and the urgency of a sustainable production model."
"New confidence" cycle
Presiq's approval marks a new cycle of confidence for the sector and sends a signal that Brazil intends to compete at a high level, said André Passos Cordeiro, the executive president of Brazil's chemical industry association Abiquim. The program provides job security and predictability for investment, innovation, and the attraction of new industrial plants focused on sustainability and production safety, he said.
The proposal will now be reviewed by the senate's environment and sustainable development, finance and taxation, and constitution and justice committees. The full senate must also approve the bill for it to become law.
Brazil's chemical industry currently operates at around 60pc of its installed capacity, the lowest level since the 1990s, according to Abiquim. A lack of investment, outdated technology, and competition from imports have eroded the sector's competitiveness.
Analysts consider Presiq to be a critical tool to reverse this trend by encouraging modernization and productivity.
