Brazilian Senate’s new law incentivises domestic fertilizer production

The bill headed to President Luiz Inácio Lula da Silva for signature into law.

Brazil spent roughly US$15 billion on fertilizer imports in 2025, which supplied approximately 85% of the fertilizer it consumed, according to data from Brazil's Ministry of Development, Industry, Trade and Services. Approximately 96% of potash alone, an essential input to soybean and corn farming, was imported from a small number of supplier countries.

Profert is intended to reduce Brazil's reliance on imported fertilizer and was approved by the Chamber of Deputies in May and by the Senate on 11 August 2026. The bill will be signed into law by President Lula. The bill combines three instruments: a tax credit for domestic fertilizer production, the Brazilian development bank (BNDES)'s credit line to financial sector infrastructure, and a mandatory domestic-content floor for fertilizer sold in Brazil, starting at 2% in 2027 and rising to 10% by 2037, with the potential to increase to 30%, subject to supply availability.

Potash presents different supply constraints compared to nitrogen and phosphate, the other two macronutrients used in commercial farming. Nitrogen and phosphate production could be resumed at idled industrial plants, whereas potash currently depends on a single conventional mine in production in Brazil, with gradually depleting reserves, covering only about 3% of domestic consumption. The domestic-content floor of potash rises annually, but Brazil's current domestic production capacity is not enough to meet those requirements.

"Profert alone doesn't solve Brazil's potash dependency; no single law would. But, for the first time, it creates a market mandate for that production to happen here in Brazil, and it reduces the capital a project like our needs to raise to deliver that production. The bill changes the conversation with those who finance companies in Brazil," said Sérgio Leite, President of Potássio do Brasil, the company's Brazilian subsidiary.

The Autazes Project, in Amazonas, is the largest scale potash project in development in Brazil at present: a projected capacity of 2.4 million tpy would be equivalent to roughly six times Brazil's entire current output of the mineral. About 91% of that projected capacity is already committed under long-term take-or-pay sales agreements with AMAGGI, Keytrade and Kimia.

Profert is also expected to reduce the capital required to bring the company's capacity online at the Autazes Project. A technical analysis of the Autazes Project's financial model shows that Profert, combined with Superintendence of the Manaus Free Trade Zone (SUFRAMA), could exempt up to ~US$190 million in federal taxes on the Autazes Project's US$2.5 billion in initial capex, reducing the amount of capital that the Company needs to raise before construction begins by approximately 7%.

Another potential benefit of Profert for Brazil Potash is that BNDES, Brazil's National Bank for Economic Development, is authorised to invest in the construction of new domestic fertilizer production capacity.

Brazil Potash's eligibility for Profert tax exemptions on equipment and construction materials as contemplated in the bill will depend on a competitive selection process, under regulations from the Ministry of Agriculture and Livestock (MAPA), which have not been published. In addition, the company will require specialised legal and tax counsel in relation to combining the potential benefits from both the SUFRAMA and Profert regimes. As such, there is no certainty that these benefits will be realised by the company.

Read the article online at: https://www.worldfertilizer.com/potash/19082026/brazilian-senates-new-law-incentivises-domestic-fertilizer-production/