Brazil eliminates import tax on Bitcoin miners, allowing companies to potentially connect them to unused solar energy sources.

On February 20, Brazil’s foreign trade council released a technical resolution that eliminates import duties for a specific category of hardware: SHA256 Bitcoin miners that exceed 200 terahashes per second and have energy efficiency below 20 joules per terahash.

Just three days later, French state-owned energy company Engie informed Reuters that it was contemplating the installation of Bitcoin miners at its 895-megawatt Assu Sol plant in northeastern Brazil, the largest solar facility in its portfolio worldwide, to capitalize on curtailed electricity and enhance profitability.

The two events occurred within a 72-hour timeframe, together suggesting a narrative that many observers overlooked: Brazil is establishing a pressure release mechanism for stranded renewable energy, with Bitcoin mining serving as the outlet.

This situation is not about Brazil “legalizing” mining or initiating a national strategy. It reflects the subtle convergence of three factors: ongoing curtailment, decreasing hardware cost barriers, and the economic challenges faced by generators.

These elements collectively create an environment conducive to incremental hashrate flowing toward a previously overlooked market.

Brazil’s zero-percent import duty for high-efficiency mining hardware is effective from February 2026 until January 2028, with Engie announcing its mining considerations just three days after the policy’s introduction.

The curtailment issue that Bitcoin miners can address

Between October 2021 and September 2025, Brazil’s wind sector curtailed approximately 32 terawatt-hours, resulting in around 6 billion reais (approximately $1.2 billion) in lost revenue for wind farms.

Curtailment happens when the grid cannot accommodate the electricity generated due to factors such as location, timing, or inadequate transmission capacity. For renewable energy producers, curtailed megawatt-hours represent lost value.

In 2024, wind and solar accounted for 24% of Brazil’s electricity generation, and by August 2025, this share reached 34% for the first time.

The grid operator ONS characterizes curtailment as a structural aspect of systems with significant shares of variable renewables, rather than a temporary issue.

As the proportion of renewables increases and transmission infrastructure development lags, the disparity intensifies. Generators require local, dispatchable demand that can absorb otherwise wasted electricity and respond quickly. Bitcoin mining precisely fits this requirement.

Engie’s Assu Sol plant is situated in northeastern Brazil, an area with high solar irradiance but limited transmission capabilities.

The company informed Reuters that mining or energy storage could enhance the facility’s profitability by monetizing energy that would otherwise be curtailed, although it noted that implementation would take several years.

This signal is significant because it originates from a state-owned European utility with no previous involvement in cryptocurrency, framing mining solely as an industrial demand response mechanism.

Implications of the tax change for Bitcoin miners

Resolução GECEX 861, published on February 20, modifies Brazil’s consolidated ex-tariff list to set the import duty to zero for certain information technology products.

Annex I introduces a new entry for servers dedicated to cryptocurrency mining utilizing the SHA256 algorithm, with energy efficiency measured at 35 degrees Celsius, below 20 joules per terahash, and processing capacity exceeding 200 terahashes per second.

The zero-percent duty will remain in effect until January 31, 2028.

This exemption does not apply to all mining hardware. The specified thresholds are designed to filter for top-tier ASICs, excluding older or less efficient models. The policy specifically targets the hardware class capable of competing effectively in a professional mining setting.

Brazil’s import tax framework is notoriously complex. Import duty is just one part of the total landed cost, which also includes IPI, PIS/COFINS-Import, ICMS, and various fees. Trade logistics resources often cite total import burdens ranging from 40% to 100%.

Eliminating the import duty to zero removes one federal cost component but does not eliminate the entire burden.

Nonetheless, Brazil has lowered a significant cost barrier for high-efficiency mining hardware, reducing payback periods, even though other taxes still apply.

The break-even power price that enables this model

Mining profitability is influenced by three factors: hash price (revenue per terahash per second per day), hardware efficiency, and electricity cost.

As of February 16, Hashrate Index reported a hash price of approximately $34.05 per petahash per second per day. Bitcoin was trading near $64,000 on February 23.

For a minimum-qualifying rig under Ex 040, with 200 terahashes per second at 20 joules per terahash, daily revenue is roughly $6.81. The power consumption is 4.0 kilowatts, resulting in a daily energy usage of 96 kilowatt-hours.

The break-even electricity price, excluding capital expenditure and operational overhead, is about $0.071 per kilowatt-hour.

When converted to reais using the February 23 exchange rate of approximately 5.17 reais per dollar, the break-even price is around 370 reais per megawatt-hour. Retail electricity prices for businesses in Brazil averaged 0.657 reais per kilowatt-hour in June 2025, which is significantly too high for mining.

However, wholesale spot prices frequently trade in the range of 250-450 reais per megawatt-hour, and curtailed energy, by its nature, has no better buyer.

If a generator can sell otherwise-lost megawatt-hours to a miner at or below its break-even cost, the generator recovers revenue that would otherwise be lost.

This is the mechanism: curtailment generates stranded value, mining transforms stranded value into computation, and the ex-tariff reduces hardware costs sufficiently to narrow the arbitrage opportunity.

The break-even electricity price for Bitcoin mining stands at R$370/MWh, which is below Brazil’s wholesale spot range and significantly lower than retail rates, creating a profitability opportunity for operations based on curtailed energy.

Potential outcomes if the thesis materializes

If Brazil’s curtailment continues or increases, driven by ongoing renewable energy expansion outpacing transmission capacity, generators will experience increasing revenue pressures.

Mining provides a bilateral PPA structure that does not require new transmission and can ramp up within days of hardware delivery. The ex-tariff is valid until January 2028, offering a 24-month period for miners to secure hardware cost certainty while assessing curtailment economics.

Engie’s pilot initiative suggests that other utilities and independent power producers may explore similar options. If several large renewable projects announce colocation agreements in the next year, Brazil could emerge as a significant incremental hashrate destination.

This development is not due to a national strategy but rather because project-level economics align.

The country already possesses regulatory clarity regarding Bitcoin, established banking infrastructure for cryptocurrency firms, and no capital controls that would restrict mining revenue from being retained domestically.

However, the thesis could also fail. If transmission upgrades accelerate and reduce curtailment, the pool of stranded energy diminishes, and power prices increase.

If Bitcoin’s mining difficulty surges, compressing the hash rate below the $30-per-petahash threshold, break-even power costs may fall below what most curtailment contracts can provide.

If local permitting or grid interconnection processes introduce obstacles for data center construction, the hardware cost advantage may become irrelevant.

Additionally, if the ex-tariff expires in January 2028 without renewal, the import cost barrier will reemerge.

Bucket	Metric	Value	Why it matters
Curtailment scale	Wind curtailment (Oct 2021–Sep 2025)	32 TWh	Defines the “stranded value” pool mining targets
Curtailment impact	Wind revenue lost (same period)	R$6B (~$1.2B)	Indicates curtailment is an economic issue, not a minor detail
Renewables penetration	Wind+solar share of generation (2024)	24%	A higher share of variable renewables typically increases congestion/curtailment pressure
Renewables penetration	Wind+solar share (Aug 2025)	34%	“First time” milestone indicating a structural shift
Policy filter	Eligible hardware	SHA256, >200 TH/s, <20 J/TH @35°C	Targets top-tier ASIC class; excludes older rigs
Policy window	0% import duty valid through	Jan 31, 2028	Time-limited “option window” for miners to act
Utility signal	Engie Assu Sol plant size	895 MWp	Significant enough to matter; demonstrates serious generator interest
Mining revenue	Hashprice (Feb 16)	$34.05 / PH/s/day	Anchors profitability calculations
Rig economics	Min qualifying rig daily revenue	~$6.81/day	Links revenue to a specific machine class
Rig economics	Power draw	4.0 kW	Converts efficiency into electricity cost sensitivity
Rig economics	Daily energy	96 kWh/day	Makes break-even intuitive
Break-even power	Electricity break-even	$0.071/kWh (~R$370/MWh)	The figure that determines “hub or not”
Price reality check	Retail business electricity (June 2025)	R$0.657/kWh (R$657/MWh)	Illustrates why miners require wholesale/curtailment pricing
Price reality check	Wholesale spot band (often)	R$250–450/MWh	Indicates that a feasible zone exists at times

The Bitcoin miner constraint that is often overlooked

The zero-percent import duty is significant, but it does not address the financing gap.

Mining hardware has a useful lifespan measured in difficulty epochs, not decades. Brazil’s cost of capital is higher than in the US or Europe, and local banks show limited interest in providing credit to crypto-related ventures.

Miners expanding in Brazil will require either offshore financing in dollars or equity structures capable of accommodating illiquidity.

The other limitation is operational. Mining at renewable facilities is effective when curtailment is predictable or when contract structures permit interruptible loads.

However, if curtailment becomes irregular or grid dynamics fluctuate hourly, uptime may decline, leading to a decrease in effective hash price.

Engie’s comment about the “years to implement” indicates that the company recognizes that integrating mining infrastructure necessitates engineering, not merely a PPA signature.

What Brazil is truly banking on

Brazil did not suddenly decide to become a mining hub. It established a targeted cost reduction for hardware that can monetize a structural grid issue, while a state-owned utility publicly tested this narrative on the same day.

The bet is narrower than it appears: can miners absorb sufficient curtailed energy to enhance generator economics without destabilizing the grid or introducing new political risks?

If the answer is affirmative, Brazil can capture incremental hashrate without directly subsidizing it: miners pay for electricity, generators recover lost revenue, and the ex-tariff alleviates friction.

If the answer is negative, the resolution will expire in January 2028, and the experiment will conclude. In either case, the policy is time-limited, the economics are clear, and the commitment can be reversed.

However, options hold value when the underlying conditions align, and Brazil’s conditions are aligning.

Curtailment is increasing, hardware costs have just decreased, and a major generator is publicly evaluating the trade-off.

The window remains open until January 2028. What unfolds next will depend on whether enough miners recognize the opportunity before it closes.

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