On February 20, the Brazilian Commerce Council introduced a technical decision decreasing import duties to zero for a slim class of {hardware}: SHA256 Bitcoin miners that exceed 200 terahashes per second and have an power effectivity of lower than 20 joules per terahash.
Three days later, French state-run power big Engie instructed Reuters it was contemplating putting in a bitcoin miner at its 895-megawatt Assu Sol plant in northeastern Brazil, the world's largest photo voltaic farm, to monetize diminished energy and enhance profitability.
The 2 developments land inside 72 hours of one another, and collectively they sketch a thesis that almost all observers have missed. It’s constructing a stress valve for renewable power that Brazil is caught with, and Bitcoin mining is the discharge mechanism.
This isn’t a narrative about “legalizing” mining in Brazil or launching a nationwide technique. It's concerning the quiet convergence of three forces: continual reductions, reducing {hardware} price boundaries, and breaking generator economics.
Collectively, these create the circumstances for incremental hashrate to move in direction of markets that nobody is taking note of.
Discount issues that Bitcoin miners can clear up
Brazil's wind trade diminished energy technology by about 32 terawatt-hours from October 2021 to September 2025, with income losses for wind farms amounting to about 6 billion reais (roughly $1.2 billion).
Suppression happens when the facility grid is unable to soak up the facility that’s being generated, both within the mistaken place, on the mistaken time, or with inadequate transmission capability. For renewable turbines, the megawatt-hours saved destroy worth.
In 2024, wind and solar energy will generate 24% of Brazil's electrical energy, and in August 2025, their share will attain 34% for the primary time.
Grid operator ONS stated the cuts weren’t a brief friction, however a structural function of a system with a excessive proportion of variable renewable power.
The mismatch will increase because the share of renewable power will increase and transmission ramp-up is delayed. Turbines require a domestically dispatchable demand that may soak up wasted electrons and switch them on and off shortly. Bitcoin mining matches precisely that profile.
Engie's Assu Sol plant is positioned in northeastern Brazil, an space with robust photo voltaic radiation however restricted transmission.
The corporate instructed Reuters it may make the ability extra worthwhile by monetizing the power financial savings from extraction and storage, however confused that this may take a number of years.
This sign is vital as a result of it comes from a state-owned European energy firm that has no earlier publicity to cryptocurrencies and positions mining purely as an industrial demand response instrument.
How tax adjustments will really have an effect on Bitcoin miners
Decision GECEX 861, issued on February 20, amends Brazil's Consolidated Exempted Tariff Record to zero import duties on sure data expertise merchandise.
Annex I provides a brand new line protecting servers devoted to cryptocurrency mining utilizing the SHA256 algorithm with power effectivity measured at 35 levels Celsius, lower than 20 Joules per terahash, and processing energy of over 200 terahashes per second.
The zero p.c tariff is in impact till January 31, 2028.
This isn’t a blanket exemption for all mining {hardware}. Prime-level ASIC threshold filter. Older or much less environment friendly fashions should not eligible. This coverage targets {hardware} lessons that may really compete at scale in skilled mining environments.
Brazil's import tax construction is notoriously multi-layered. Import duties are one element of the whole landed price, together with IPI, PIS/COFINS-Import, ICMS, and varied charges. Commerce logistics guides usually state that complete import burden charges vary from 40% to 100%.
Lowering import duties to zero removes one federal lever, however not your entire stack.
Nonetheless, Brazil has diminished key price boundaries and shortened payback intervals for high-efficiency mining {hardware}, although different taxes stay.
Break-even electrical energy value to realize this
Mining profitability is set by three variables: hash value (income per terahash per second per day), {hardware} effectivity, and energy price.
As of February 16, Hashrate Index is reporting a hash value of roughly $34.05 per petahash per day. Bitcoin traded at practically $64,000 on February twenty third.
For a rig that meets the minimal necessities below Ex 040, 20 joules per terahash and 200 terahash per second equates to roughly $6.81 in income per day. Energy consumption is 4.0 kilowatts. Power utilization is 96 kilowatt hours per day.
The break-even electrical energy price, ignoring capital and working bills, is roughly $0.071 per kilowatt-hour.
Changing to reais utilizing the February 23 alternate price of roughly 5.17 reais per greenback, the break-even level is roughly 370 reais per megawatt hour. Retail electrical energy costs in Brazil averaged R$0.657 per kilowatt hour as of June 2025, which is simply too excessive for mining.
Nonetheless, with wholesale spot costs usually buying and selling within the vary of 250 to 450 reais per megawatt hour, there are by definition no higher patrons for power financial savings.
If the generator can promote the misplaced megawatt-hours to the miner at a value under the break-even level, the generator can get well income that may in any other case be zero.
That is the mechanism. Reductions create stranded worth, mining converts stranded worth into calculations, and elevated tariffs decrease {hardware} prices sufficient to slim the arbitrage window.
What’s going to occur if the paper turns into a actuality?
If Brazil's energy technology curtailment continues or widens as renewable power continues to construct as much as outstrip transmission capability, energy producers will face growing income stress.
Mining provides a two-way PPA construction that requires no new submissions and may be began inside days of {hardware} supply. The outdated tariffs will stay in impact till January 2028, with a 24-month grace interval for miners to check the economics of reductions whereas guaranteeing {hardware} price certainty.
Engie's pilot framework means that different utilities and unbiased energy producers consider comparable choices. If a number of giant renewable tasks announce colocation offers over the subsequent 12 months, Brazil will turn out to be a significant incremental hashrate vacation spot.
This occurs not due to nationwide technique, however as a result of project-level economics are aligned.
The nation already has clear laws concerning Bitcoin, a well-established banking infrastructure for crypto corporations, and no capital controls that may lock up mining earnings inside the nation.
Nonetheless, typically a paper fails. As transmission upgrades speed up and curtailments are diminished, the pool of pent-up power will shrink and electrical energy costs will rise.
If Bitcoin issue spikes and the hashrate drops under the $30 per petahash vary, the breakeven energy price can be under what most abatement contracts can ship.
If native allowing and grid interconnection processes create friction in information middle development, the associated fee benefits of {hardware} turn out to be irrelevant.
And if the outdated tariffs should not renewed and expire in January 2028, import price boundaries will as soon as once more exist.
| bucket | metric | worth | why is it vital |
|---|---|---|---|
| Discount scale | Wind curtailment (October 2021 to September 2025) | 32TWh | Outline the mining goal for the “stranded worth” pool |
| Influence of discount | Lack of wind energy technology income (similar interval) | 6 billion reais (~$1.2 billion) | Present that discount is a matter of economics, not rounding error. |
| Popularization of renewable power | Wind + solar energy technology ratio (2024) | twenty 4% | Increased VRE share tends to extend congestion/curtailment stress |
| Popularization of renewable power | Share of wind energy technology + solar energy technology (August 2025) | 34% | “First” milestones that point out structural adjustments |
| coverage filter | Goal {hardware} | SHA256, >200TH/sec, <20 J/TH @35°C | Targets the highest ASIC class. excluding outdated rigs |
| Coverage window | 0% import obligation is legitimate till the next interval | January 31, 2028 | A time-limited “choice window” that miners can transfer via |
| utility sign | Engie Assu Sol plant dimension | 895MWp | It's large enough to be vital. Displaying critical curiosity in turbines |
| mining income | Hash Worth (February 16) | $34.05 / PH/sec/day | Anchor profitability calculation |
| rig economics | Minimal day by day income for eligible rigs | ~$6.81/day | Tie income to particular machine lessons |
| rig economics | Energy consumption | 4.0kW | Convert effectivity → electrical energy invoice sensitivity |
| rig economics | day by day power | 96kWh/day | Make it potential to intuitively perceive the break-even level |
| break-even energy | Electrical energy break-even level | $0.071/kWh (~R$370/MWh) | Quantity that determines whether or not it’s a hub or not |
| Worth actuality verify | Retail enterprise electrical energy (June 2025) | R$0.657/kWh (R$657/MWh) | Reveals why miners want wholesale/diminished costs |
| Worth actuality verify | wholesale spot bands (incessantly) | R$250～450/MWh | Signifies {that a} feasibility zone exists typically |
Constraints of Bitcoin miners that nobody talks about
Zero p.c import tariffs are vital, however they don’t clear up the funding hole.
The helpful lifetime of mining {hardware} is measured in epochs of issue, not a long time. Brazil's price of capital is increased than within the US or Europe, limiting native banks' urge for food for crypto-native credit score.
Miners scaling up in Brazil will want both dollar-denominated offshore financing or fairness buildings that may soak up illiquidity.
One other constraint is operational. Mining in renewable power energy crops works when curtailment is predictable or when the contract construction permits for interruptible masses.
Nonetheless, if the cuts turn out to be sporadic or the grid dynamics change from second to second, the uptime will lower and the efficient hash value will lower.
Engie's remark that “implementation will take years” means that the corporate understands that bolt-on mining infrastructure requires engineering past simply PPA signing.
What Brazil is definitely betting on
Brazil didn't get up and resolve to turn out to be a mining middle. It created focused price reductions in {hardware} that might monetize structural grid issues, and the nationwide energy firm publicly examined this narrative on the identical day.
The stakes are narrower than they seem. Can miners soak up sufficient curtailed power to enhance generator economics with out destabilizing the grid or creating new political dangers?
If the reply is sure, Brazil will acquire incremental hashrate with out straight subsidizing it. Miners pay for electrical energy, turbines get well misplaced income, and tariff elimination eliminates friction.
If the reply isn’t any, the decision will expire in January 2028 and the experiment will finish. In any case, insurance policies have closing dates, financial circumstances are clear, and commitments are reversible.
But when the basics match and Brazil's circumstances match, the choice has worth.
Energy financial savings are rising, {hardware} prices are falling, and main energy producers are publicly pricing their trade-offs.
This window is open till January 2028. What occurs subsequent depends upon whether or not sufficient miners discover the opening earlier than the window closes.
(Tag translation) Bitcoin
