As part of the federal government's broader effort to simplify the tax system, even ahead of the full implementation of tax reform, the natural gas sector has just achieved a significant milestone. The Ministry of Mines and Energy has created a specific National Classification of Economic Activities (CNAE) for natural gas trading, correcting a long-standing gap in the legal framework. Since the inception of Brazil’s new natural gas market, the absence of a proper classification has limited traders’ activities and hindered the sector’s development. The measure is promoted in a similar context—although with distinct objectives—to other recent initiatives, such as the Exporta Mais Brasil program, the expanded Drawback regime, and BR do Mar, all of which aim to stimulate the Brazilian economy through regulatory modernization and fiscal streamlining.

Until now, trading companies—which mediate the buying and selling of natural gas without producing it—faced a series of operational, regulatory, and tax barriers. The lack of a legal framework for their activities meant they had no access to key infrastructure in the natural gas value chain and were excluded from differentiated tax treatment relevant to gas processing obligations. This prevented access to processing plants and forced traders to operate almost exclusively with already-processed gas, significantly restricting their business model. The new classification addresses this obstacle, paving the way for a broader range of market players and injecting greater dynamism and competition into the sector.

The change also brings enhanced legal and tax certainty, a critical factor in attracting foreign investment into Brazil’s natural gas market.

“The fossil fuel trade involves large sums, and investors want predictability. The creation of an activity-specific code avoids tax questions and reduces excessive bureaucracy in activating and maintaining the respective state registrations of trading companies,” explains Paloma Rosa, partner in the Tax and Customs practice at Vieira Rezende.

With clearer rules, new players are expected to enter the market more actively, driving price reductions and greater efficiency in market operations and corporate structuring.