Brazil's Zero Import Duty: A Flow Catalyst for Renewable Energy Arbitrage

The core policy change is a targeted reduction of import duty to zero for a specific class of mining hardware. Resolução GECEX 861, published Feb. 20, amends Brazil's consolidated ex-tariff list to reduce import duty to zero for servers dedicated to cryptocurrency mining using the SHA256 algorithm with energy efficiency measured at 35 degrees Celsius, below 20 joules per terahash, and processing capacity above 200 terahashes per second. This exemption runs from February 2026 through January 2028, creating a defined window for investment.

The policy landed within 72 hours of a major operational signal. Three days after the resolution was published, French state-owned energy giant Engie told Reuters it was considering installing Bitcoin miners at its 895-megawatt Assu Sol plant in northeast Brazil, the company's largest solar facility globally. This coincidence is critical: it shows the policy's timing aligns with a concrete plan from a major energy generator to monetize curtailed electricity.

The scale of the opportunity is defined by Brazil's rapid renewable transition. The share of wind and solar in the national grid rose to 34% in August 2025, up from 24% in 2024. This acceleration, coupled with lagging transmission buildout, makes curtailment a growing structural feature. The policy provides a targeted solution: a new, dispatchable industrial load that can absorb wasted electrons on demand.

The Liquidity Engine: Monetizing Stranded Renewable Energy

The core mechanism is a direct arbitrage between stranded supply and flexible demand. Renewable generators can now sell otherwise-lost megawatt-hours to miners at or below their break-even cost, creating a new revenue stream for curtailed energy. This turns a structural loss-estimated at 6 billion reais ($1.2 billion) in lost revenue for wind farms-into a monetizable asset class.

The physical node for this flow is massive. French energy giant Engie's 895-megawatt Assu Sol plant in northeast Brazil is the largest solar facility in the company's global portfolio. Its location in a region with strong solar irradiance but known transmission constraints makes it a prime candidate for hosting miners. . This single facility represents a potential anchor for a new cluster of hashrate, directly linking Brazil's renewable surplus to the Bitcoin network.

The Flow Impact: Hashrate Migration and Price Implications

The convergence of three forces creates a direct path for incremental hashrate to flow toward Brazil. Falling hardware costs lower the entry barrier, while chronic renewable curtailment provides a massive, low-cost energy supply. The zero-duty policy removes a key federal cost, compressing payback periods for qualifying high-efficiency ASICs. This setup is a classic catalyst for capital reallocation, as miners seek to monetize the cheapest available electricity.

The price mechanism is straightforward. This influx of low-cost supply acts as a pressure valve on the Bitcoin network. As new hashrate comes online in Brazil, it increases the total network difficulty, which in turn raises the marginal cost of mining. The spot price of Bitcoin is likely to be capped at a level that reflects this new, lower marginal cost of production. In other words, the price may struggle to rise above the break-even point for this renewable-powered hashrate.

The competitive math is compelling. The current hash price is around $34.05 per petahash per second per day. For a qualifying rig, the break-even electricity cost is about $0.071 per kilowatt-hour. Brazil's renewable energy, especially curtailed solar, can be sourced at or below this threshold. This makes the country a highly competitive node for mining, directly challenging the economics of higher-cost operations elsewhere.