On February 20, the Brazilian Trade Council announced a technical resolution reducing import duties to zero for a narrow class of hardware: SHA256 Bitcoin miners that exceed 200 terahashes per second and have an energy efficiency of less than 20 joules per terahash.
Three days later, French state-run energy giant Engie told Reuters it was considering installing a bitcoin miner at its 895-megawatt Assu Sol plant in northeastern Brazil, the world’s largest solar farm, to monetize reduced power and improve profitability.
The two developments land within 72 hours of each other, and together they sketch a thesis that most observers have missed. It is building a pressure valve for renewable energy that Brazil is stuck with, and Bitcoin mining is the release mechanism.
This is not a story about “legalizing” mining in Brazil or launching a national strategy. It’s about the quiet convergence of three forces: chronic reductions, lowering hardware cost barriers, and breaking generator economics.
Together, these create the conditions for incremental hashrate to flow towards markets that no one is paying attention to.
Reduction problems that Bitcoin miners can solve
Brazil’s wind industry reduced power generation by about 32 terawatt-hours from October 2021 to September 2025, with revenue losses for wind farms amounting to about 6 billion reais (approximately $1.2 billion).
Suppression occurs when the power grid is unable to absorb the power that is being generated, either in the wrong place, at the wrong time, or with insufficient transmission capacity. For renewable generators, the megawatt-hours saved destroy value.
In 2024, wind and solar power will generate 24% of Brazil’s electricity, and in August 2025, their share will reach 34% for the first time.
Grid operator ONS said the cuts were not a temporary friction, but a structural feature of a system with a high proportion of variable renewable energy.
The mismatch increases as the share of renewable energy increases and transmission ramp-up is delayed. Generators require a locally dispatchable demand that can absorb wasted electrons and turn them on and off quickly. Bitcoin mining fits exactly that profile.
Engie’s Assu Sol plant is located in northeastern Brazil, an area with strong solar radiation but limited penetration.
The company told Reuters it could make the facility more profitable by monetizing the energy savings from extraction and storage, but stressed that this would take several years.
This signal is important because it comes from a state-owned European power company that has no previous exposure to cryptocurrencies and positions mining purely as an industrial demand response tool.
How tax changes will actually affect Bitcoin miners
Resolution GECEX 861, issued on February 20, amends Brazil’s Consolidated Exempted Tariff List to zero import duties on certain information technology products.
Annex I adds a new line covering servers dedicated to cryptocurrency mining using the SHA256 algorithm with energy efficiency measured at 35 degrees Celsius, less than 20 Joules per terahash, and processing power of over 200 terahashes per second.
The zero percent tariff is in effect until January 31, 2028.
This is not a blanket exemption for all mining hardware. Top-level ASIC threshold filter. Older or less efficient models are not eligible. This policy targets hardware classes that can actually compete at scale in professional mining environments.
Brazil’s import tax structure is notoriously multi-layered. Import duties are one component of the total landed cost, along with IPI, PIS/COFINS-Import, ICMS, and various fees. Trade logistics guides generally state that total import burden rates range from 40% to 100%.
Reducing import duties to zero removes one federal lever, but not the entire stack.
Nevertheless, Brazil has reduced key cost barriers and shortened payback periods for high-efficiency mining hardware, even though other taxes remain.
Break-even electricity price to achieve this
Mining profitability is determined by three variables: hash price (revenue per terahash per second per day), hardware efficiency, and power cost.
As of February 16, Hashrate Index is reporting a hash price of approximately $34.05 per petahash per day. Bitcoin traded at nearly $64,000 on February 23rd.
For a rig that meets the minimum requirements under Ex 040, 20 joules per terahash and 200 terahash per second equates to approximately $6.81 in revenue per day. Power consumption is 4.0 kilowatts. Energy usage is 96 kilowatt hours per day.
The break-even electricity cost, ignoring capital and operating expenses, is approximately $0.071 per kilowatt-hour.
Converting to reais using the February 23 exchange rate of approximately 5.17 reais per dollar, the break-even point is approximately 370 reais per megawatt hour. Retail electricity prices in Brazil averaged R$0.657 per kilowatt hour as of June 2025, which is too high for mining.
However, with wholesale spot prices often trading in the range of 250 to 450 reais per megawatt hour, there are by definition no better buyers for energy savings.
If the generator can sell the lost megawatt-hours to the miner at a cost below the break-even point, the generator can recover revenue that would otherwise be zero.
This is the mechanism. Reductions create stranded value, mining converts stranded value into calculations, and increased tariffs lower hardware costs enough to narrow the arbitrage window.
What will happen if the paper becomes a reality?
If Brazil’s power generation curtailment continues or widens as renewable energy continues to build up to outstrip transmission capacity, power producers will face increasing revenue pressure.
Mining offers a two-way PPA structure that requires no new submissions and can be started within days of hardware delivery. The old tariffs will remain in effect until January 2028, with a 24-month grace period for miners to test the economics of reductions while ensuring hardware cost certainty.
Engie’s pilot framework suggests that other utilities and independent power producers evaluate similar options. If several large renewable projects announce colocation deals over the next 12 months, Brazil will become a meaningful incremental hashrate destination.
This happens not because of national strategy, but because project-level economics are aligned.
The country already has clear regulations regarding Bitcoin, a well-established banking infrastructure for crypto companies, and no capital controls that would lock up mining profits within the country.
However, sometimes a paper fails. As transmission upgrades accelerate and curtailments are reduced, the pool of pent-up energy will shrink and electricity prices will rise.
If Bitcoin difficulty spikes and the hashrate drops below the $30 per petahash range, the breakeven power cost will be below what most abatement contracts can deliver.
If local permitting and grid interconnection processes create friction in data center construction, the cost advantages of hardware become irrelevant.
And if the old tariffs are not renewed and expire in January 2028, import cost barriers will once again exist.
| bucket | metric | value | why is it important |
|---|---|---|---|
| Reduction scale | Wind curtailment (October 2021 to September 2025) | 32TWh | Define the mining target for the “stranded value” pool |
| Impact of reduction | Loss of wind power generation revenue (same period) | 6 billion reais (~$1.2 billion) | Show that reduction is a matter of economics, not rounding error. |
| Popularization of renewable energy | Wind + solar power generation ratio (2024) | twenty four% | Higher VRE share tends to increase congestion/curtailment pressure |
| Popularization of renewable energy | Share of wind power generation + solar power generation (August 2025) | 34% | “First” milestones that indicate structural changes |
| policy filter | Target hardware | SHA256, >200TH/sec, <20 J/TH @35°C | Targets the top ASIC class. excluding old rigs |
| Policy window | 0% import duty is valid until the following period | January 31, 2028 | A time-limited “option window” that miners can move through |
| utility signal | Engie Assu Sol plant size | 895MWp | It’s big enough to be important. Showing serious interest in generators |
| mining revenue | Hash Price (February 16) | $34.05 / PH/sec/day | Anchor profitability calculation |
| rig economics | Minimum daily revenue for eligible rigs | ~$6.81/day | Tie revenue to specific machine classes |
| rig economics | Power consumption | 4.0kW | Convert efficiency → electricity bill sensitivity |
| rig economics | daily energy | 96kWh/day | Make it possible to intuitively understand the break-even point |
| break-even power | Electricity break-even point | $0.071/kWh (~R$370/MWh) | Number that determines whether it is a hub or not |
| Price reality check | Retail business electricity (June 2025) | R$0.657/kWh (R$657/MWh) | Shows why miners need wholesale/reduced prices |
| Price reality check | wholesale spot bands (frequently) | R$250～450/MWh | Indicates that a feasibility zone exists sometimes |
Constraints of Bitcoin miners that no one talks about
Zero percent import tariffs are important, but they do not solve the funding gap.
The useful life of mining hardware is measured in epochs of difficulty, not decades. Brazil’s cost of capital is higher than in the US or Europe, limiting local banks’ appetite for crypto-native credit.
Miners scaling up in Brazil will need either dollar-denominated offshore financing or equity structures that can absorb illiquidity.
Another constraint is operational. Mining in renewable energy power plants works when curtailment is predictable or when the contract structure allows for interruptible loads.
However, if the cuts become sporadic or the grid dynamics change from moment to moment, the uptime will decrease and the effective hash price will decrease.
Engie’s comment that “implementation will take years” suggests that the company understands that bolt-on mining infrastructure requires engineering beyond just PPA signing.
What Brazil is actually betting on
Brazil didn’t wake up and decide to become a mining center. It created targeted cost reductions in hardware that could monetize structural grid problems, and the national power company publicly tested this narrative on the same day.
The stakes are narrower than they appear. Can miners absorb enough curtailed energy to improve generator economics without destabilizing the grid or creating new political risks?
If the answer is yes, Brazil will obtain incremental hashrate without directly subsidizing it. Miners pay for electricity, generators recover lost revenue, and tariff removal eliminates friction.
If the answer is no, the resolution will expire in January 2028 and the experiment will end. In any case, policies have time limits, economic conditions are transparent, and commitments are reversible.
But if the fundamentals match and Brazil’s conditions match, the option has value.
Power savings are growing, hardware costs are falling, and major power producers are publicly pricing their trade-offs.
This window is open until January 2028. What happens next depends on whether enough miners notice the opening before the window closes.
(Tag translation) Bitcoin
