🎯 Bolsonaro and the coup plot

Good morning! Today is Black Awareness Day in Brazil. It is a day dedicated to reflecting on and celebrating Afro-Brazilians’ contributions to the country’s culture, history, and identity. It is also a time to acknowledge the enduring challenges posed by systemic racism and to advocate for racial equality. In today’s issue: 

Assassination plot dangerously close to Bolsonaro

After months of speculation, the question on the lips of political observers in Brasília seems to be less if Brazil’s Federal Prosecution Office will seek an indictment against former President Jair Bolsonaro and more when. Mr. Bolsonaro is under investigation for his alleged role in a conspiracy to subvert democracy following his electoral loss to Luiz Inácio Lula da Silva in 2022.

 Why it matters. Newly uncovered evidence links members of Mr. Bolsonaro’s inner circle to a plot to assassinate President Luiz Inácio Lula da Silva, Vice President Geraldo Alckmin, and Supreme Court Justice Moraes (who in 2022 also served Brazil’s former chief electoral justice).

• Police investigations revealed incriminating communications found on electronic devices, implicating Mr. Bolsonaro’s former aide-de-camp and high-profile allies, such as his 2022 running mate.

In print. On December 6, 2022, Mr. Bolsonaro’s then-deputy secretary of government, one of the alleged conspirators, printed a document outlining the assassination plan within the presidential palace.

• The investigation also claims that Mr. Bolsonaro reviewed and altered a draft decree that aimed at intervening in electoral courts to steal the 2022 election in an old-fashioned military coup.

Let that sink in. The gravity of this case cannot be overstated: members of the Army and government officials conspired to assassinate the president-elect, his running mate, and a Supreme Court justice. Not even during Brazil’s 1964 military coup — when the Army seized power — did such plans emerge. At the time, the ousted president, João Goulart, was allowed to leave the country unharmed.

The big picture. Investigators view the assassination operation as one element of a larger strategy to delegitimize Brazil’s electoral system, incite far-right supporters against democratic institutions, and block Lula’s return to power.

• Mr. Bolsonaro’s rhetoric and actions created an atmosphere of unrest that snowballed after his electoral defeat. His supporters’ attempted roadblocks and calls for military intervention ultimately failed to topple democratic institutions but left the nation shaken.

• The putschist rhetoric culminated in the attack on Brazil’s Congress, Supreme Court, and presidential palace on January 8, 2023. Bolsonaro supporters attempted to create chaos to justify military intervention and remove Lula a week into his presidency.

Crescendoing violence. Just weeks before the riots, Bolsonaro loyalists in Congress amplified calls for insurrection, as The Brazilian Report showed at the time. It is worth noting that in September 2022 (just a month before the election), one of Mr. Bolsonaro’s sons made a literal call to arms.

• Following Lula’s election certification on December 12, 2022, Bolsonaro supporters escalated their tactics, torching buses, attempting to storm Federal Police headquarters, and staging violent demonstrations.

• A bomb plot near Brasília’s airport — aimed at “stirring chaos” to justify a coup — was defused by authorities in late December.

What’s next: As investigators continue piecing together evidence, the Federal Prosecution Office will be pressured to act decisively. An indictment of Mr. Bolsonaro could reshape the political landscape (he has already been rendered ineligible until 2030), marking a significant step in Brazil’s reckoning with the events of 2022 and 2023.

Thought bubble. The amateurishness of the plot is baffling. The men accused used government computers and unsecured messaging apps, while their communications were barely coded. Even more baffling is Senator Flávio Bolsonaro’s attempt at a defense, saying that “thinking of killing someone, although a repugnant thought, is not in itself a crime.”

Legal issues: Unlike in the U.S., acts in preparation for committing a crime may not necessarily constitute crimes in and of themselves. But an unsealed Federal Police report says the military officers involved in the plot were positioned to act against Supreme Court Justice Alexandre Moraes on December 15 but aborted at the last minute — after a court sitting was adjourned.

• Supreme Court Justice Gilmar Mendes on Tuesday said the assassination plans revealed by the Federal Police went “beyond merely thinking” about the crime, adding that “preparatory acts often extend to the execution” of crimes.

Lula and Xi meet in Brasília

Chinese President Xi Jinping arrived in Brasília today for a state visit with President Luiz Inácio Lula da Silva, following their recent meeting at the G20 Summit in Rio de Janeiro. A delegation of around 1,000 people is accompanying Mr. Xi and will depart tomorrow, November 21.

 Why it matters. China has been Brazil’s largest trading partner for 15 years and brings investments in oil, agriculture, mining, and infrastructure. The two nations call their relationship a “global strategic partnership” and share membership in multilateral groups such as the BRICS and BASIC (Brazil, South Africa, India, and China).

By the numbers. Brazil-China trade amounted to USD 160 billion in 2023. Brazil’s trade surplus with China has topped USD 50 billion, mainly because of an overreliance on commodity exports such as soybeans, oil, and iron ore.

The dropback. China is pushing Brazil to join the Belt and Road Initiative, Beijing’s flagship infrastructure investment program. While Lula’s allies have hinted at Brazil possibly becoming a member, officials within the Lula administration remain cautious.

What they’re saying. “There are synergies between Brazil and China’s development policies — from infrastructure and ecological transition to technology — that could enhance Brazil’s domestic programs such as the New PAC [infrastructure program] and South American Integration Routes,” said Eduardo Saboia, the Foreign Affairs Ministry’s secretary for Asia-Pacific.

Tech. During the G20 Summit, Xi Jinping announced a partnership between Brazil, South Africa, and the African Union to direct scientific and technological innovations to the Global South.

State of play. Brazil and China have collaborated on satellite development since the 1980s, with new projects focused on monitoring biomes and improving weather forecasts. The countries share calls for stronger representation of the Global South in international governance bodies and challenge agricultural trade policies at the World Trade Organization (WTO).

• On Tuesday, the Brazilian government signed agreements with China’s National Data Administration and SpaceSail, a low-orbit internet satellite company aiming to rival Elon Musk’s Starlink. 

• Starlink has rapidly grown to become Brazil’s top satellite internet provider, gobbling up 47 percent of the market. However, it is still a fringe segment.

Yes, but … China’s rise as a global power has led to some friction with Brazil. The Asian giant is overtaking Brazil as a trade partner and source of influence over Latin American neighbors. Moreover, Brazil has clashed with China over trade dumping and sanitary barriers at the WTO.

What’s next. China is likely to seek closer ties with Brazil amid possible U.S. protectionist policies. “If Trump returns to the White House, China will pivot further to emerging markets such as Brazil, India, and Russia,” Lincoln Fracari, CEO of China Link, a trading consultancy, told The Brazilian Report’s deputy editor Letícia Arcoverde.

The bottom line. While Brazil and China align on many fronts, underlying tensions — from trade practices to regional influence — underscore the complexity of their partnership.

Security concerns. Mr. Xi’s team opted to meet at the Alvorada Palace (the presidential residence) and not the Planalto Palace (where the presidential offices are), citing security concerns. Last week, an explosion near the Supreme Court, close to the Planalto Palace and the Foreign Affairs Ministry, raised alarms.

Congress greenlights Brazil’s regulated carbon credit market

Brazil’s House has passed a bill to regulate the carbon credit market and establish a cap-and-trade system aimed at reducing greenhouse gas emissions. The legislation now awaits President Luiz Inácio Lula da Silva’s approval.

 Why it matters. The law introduces a cap-and-trade system, setting annual carbon emissions limits for companies. Firms exceeding their cap must purchase credits to offset excess emissions; those under the limit can sell surplus credits, encouraging emissions reductions.

By the numbers. Companies emitting over 10,000 tons of CO2 equivalent annually must inventory their emissions, while those exceeding 25,000 tons will face mandatory caps. This primarily targets high-polluting sectors such as steelmaking.

• The bill also allows preserved public lands and indigenous communities to generate and sell carbon credits.

Voluntary market. The bill extends to Brazil’s voluntary carbon credit market, enabling companies to offset emissions via systems like REDD+, which focuses on forest conservation. Companies can use voluntary credits to cover part of their emissions, but critics argue the bill leans too heavily on voluntary mechanisms rather than the regulated market.

What they’re saying. “This project isn’t perfect, but it’s a step forward on a long-overdue issue,” Munir Soares, CEO of Systemica, a carbon credit project developer, tells The Brazilian Report. Mr. Soares expects future legislation to refine the system and anticipates increased scrutiny as regulations are developed.

Regulation. A federal managing body will oversee emissions allocations and enforce penalties, but the cap-and-trade system will take at least four years to be operational — with the first two years devoted to drafting regulations.

Global signals. Congress fast-tracked the bill ahead of COP29 in Baku, giving the Lula administration a climate win to showcase on the international stage. The timing also aligns with the European Union’s upcoming Carbon Border Adjustment Mechanism (2026), which could impose tariffs on goods from nations without regulated carbon markets.

Yes, but … Agriculture, a top emitter, is notably absent from the cap-and-trade system. Farmers — who command one of the strongest lobbies in Brasília — argue their emissions are harder to quantify than industrial outputs. Environmentalists, however, point to agribusiness’ significant role in Brazil’s emissions profile.

By the numbers. Land use changes, including deforestation tied to farming, account for most of Brazil’s emissions. Even excluding land use changes, agribusiness contributes 27 percent of the country’s emissions — primarily from cattle digestion.

What’s next. Despite agriculture’s exclusion, the regulated market could still cover 18 percent of Brazil’s emissions, per estimates from the Talanoa Institute, a think tank. Brazil recently updated its Paris Agreement targets, aiming for a 59- to 67-percent reduction in emissions by 2035 compared to 2005 levels.

• The bill also positions Brazil to potentially export carbon credits if it surpasses these targets in the future.

Quick catch-up

Brazil’s agriculture minister said the country is optimistic about a deal between Mercosur and the EU “despite resistance from France.” He hopes for an agreement by December — when the South American bloc convenes.

Morgan Stanley downgraded Brazilian stocks to underweight, saying the country’s untamed fiscal deficit may overwhelm the Central Bank’s attempts to control inflation, forcing interest rates to stay higher for longer — a warning the monetary authority itself has made.

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