On February 20, the Brazilian Commerce Council introduced a technical decision lowering import duties to zero for a slender 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 large Engie informed 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 lowered 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: persistent reductions, decreasing {hardware} price boundaries, and breaking generator economics.
Collectively, these create the circumstances for incremental hashrate to move in the direction of markets that nobody is being attentive to.
Discount issues that Bitcoin miners can clear up
Brazil's wind trade lowered energy era 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 ability grid is unable to soak up the ability that’s being generated, both within the fallacious place, on the fallacious 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 mentioned the cuts weren’t a brief friction, however a structural characteristic 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. Mills require a regionally dispatchable demand that may soak up wasted electrons and switch them on and off shortly. Bitcoin mining suits precisely that profile.
Engie's Assu Sol plant is situated in northeastern Brazil, an space with robust photo voltaic radiation however restricted transmission.
The corporate informed Reuters it may make the power extra worthwhile by monetizing the power financial savings from extraction and storage, however burdened that this could take a number of years.
This sign is essential 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 device.
How tax adjustments will truly 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 info expertise merchandise.
Annex I provides a brand new line masking 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}. High-level ASIC threshold filter. Older or much less environment friendly fashions usually are not eligible. This coverage targets {hardware} courses that may truly compete at scale in skilled mining environments.
Brazil's import tax construction is notoriously multi-layered. Import duties are one part of the whole landed price, together with IPI, PIS/COFINS-Import, ICMS, and numerous charges. Commerce logistics guides typically 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 lowered key price boundaries and shortened payback intervals for high-efficiency mining {hardware}, although different taxes stay.
Break-even electrical energy worth to attain this
Mining profitability is decided by three variables: hash worth (income per terahash per second per day), {hardware} effectivity, and energy price.
As of February 16, Hashrate Index is reporting a hash worth 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 trade fee 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 just too excessive for mining.
Nevertheless, with wholesale spot costs typically buying and selling within the vary of 250 to 450 reais per megawatt hour, there are by definition no higher consumers for power financial savings.
If the generator can promote the misplaced megawatt-hours to the miner at a value beneath the break-even level, the generator can get better 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 slender the arbitrage window.
What is going to occur if the paper turns into a actuality?
If Brazil's energy era curtailment continues or widens as renewable power continues to construct as much as outstrip transmission capability, energy producers will face rising income stress.
Mining affords a two-way PPA construction that requires no new submissions and might be began inside days of {hardware} supply. The previous tariffs will stay in impact till January 2028, with a 24-month grace interval for miners to check the economics of reductions whereas making certain {hardware} price certainty.
Engie's pilot framework means that different utilities and unbiased energy producers consider comparable choices. If a number of massive renewable initiatives announce colocation offers over the subsequent 12 months, Brazil will develop into 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 rules relating to Bitcoin, a well-established banking infrastructure for crypto firms, and no capital controls that may lock up mining earnings throughout the nation.
Nevertheless, typically a paper fails. As transmission upgrades speed up and curtailments are lowered, the pool of pent-up power will shrink and electrical energy costs will rise.
If Bitcoin issue spikes and the hashrate drops beneath the $30 per petahash vary, the breakeven energy price will likely be beneath what most abatement contracts can ship.
If native allowing and grid interconnection processes create friction in knowledge heart building, the price benefits of {hardware} develop into irrelevant.
And if the previous tariffs usually are not renewed and expire in January 2028, import price boundaries will as soon as once more exist.
Constraints of Bitcoin miners that nobody talks about
Zero p.c import tariffs are essential, 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.
Nevertheless, if the cuts develop into sporadic or the grid dynamics change from second to second, the uptime will lower and the efficient hash worth 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 develop into a mining heart. 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 receive incremental hashrate with out straight subsidizing it. Miners pay for electrical energy, turbines get better misplaced income, and tariff removing 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 cut-off 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 is dependent upon whether or not sufficient miners discover the opening earlier than the window closes.
