Air Pollution Business Opportunities

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Air Pollution Business Opportunities

The demand for air filtration solutions within industry is driven by state regulations and control measures. The levels vary across the country with a more developed South, lower demands in the North and São Paulo at the fore front with the strictest laws and highest investments in control of air pollution.

Driven by federal and state regulations and control, the industry segment invests in new technology for control of emissions. As private stakeholders have a faster decision making process than the government and no local content requirements, this segment offers opportunities for providers of solutions for the treatment of industrial exhaust (particle filters, NOx and flue gas).

Brazilian government stimulates through regulations and control, but has not allocated any specific funding for the sector of air measurement and treatment. The levels demanded on state level vary as does control of execution. As a result, investments in monitoring systems between states differ as does reliability of the measurements. Southern states are more developed than the northern. 

For many years, São Paulo had significant problems with air pollution. Inm the early 80s, the city of Cubatão, in the vicinity of the state capital, was one of the most polluted cities in the world. The state of São Paulo state has since becoming a pioneer in improving air quality.

The implemented state decree 48.523 to control areas with high industry saturation has made it more difficult for the industry to obtain licenses to establish in already dense areas. Environmental licensing is now required preventing relocation of the problem. To obtain a license for new installations or new operations in saturated areas, the industry is required to compensate the environment through ”credits for emissions”. A company that intends to expand its plant has to get an environmental license from the state agency. For areas considered saturated, the company can obtain credits if they show investments that decrease the environmental impact. 

Industrial air pollution

The government regulations in each state have a decisive impact on how the industry invests to control air pollution. In states, such as São Paulo, where regulations are strict and a state agency has resources to execute and control these policies, the industry is more likely to adopt new technologies.

Other states have not come as far and have varying levels of access to resources such as air monitoring systems. Also, there are differences in how states control the emission targets from the industry as not all Brazilian state agencies have stipulated targets for levels of emissions. For example, the state agency of the nearby state of Minas Gerais, FEAM, does not enforce specific restrictions for the industry like São Paulo does.

The government does not subsidize or finance projects related to the industry. The only facilitator are soft loans granted via the BNDES’s programs.

Business opportunities

In municipalities where the environmental agencies impose regulations to reduce and control emissions, foreign companies can find business opportunities and present new technologies to the Brazilian industry. Steel or cement production are examples of two such areas. Furthermore, the large number of sugar mills produce ethanol burn bagasse for cogeneration and are in need of exhaust treatment technologies.

Purchasing within the industry is done through bidding processes and decision makers are usually accessible. Import duties are seen as barriers for buying foreign equipment and Brazilians may prefer to do business with companies that have established local production, assembly and offer technical support.