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| # Brazil: Overview of the Environmental Sector in Brazil              |
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| Teresa Wagner -- April 16, 2008                                       |
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##### Summary

Environmental experts estimate that Brazil's environmental technologies
market (including equipment, engineering / consulting services and
instrumentation associated with pollution control and cleanup projects)
is valued at roughly US\$ 4.9 billion, of which US\$ 2.3 billion is
related to the water and wastewater sub-sector (water and sewage US\$ 2
billion, industrial investments about US\$ 300 million); solid waste
management at US\$ 2.5 billion (US\$ 500 million private investments)
and air pollution control at US\$ 400 million.

Environmental Technology Market in Brazil

+--------------------------------------------+-------------+-----------+
| Sub-sector                                 | Market Size | \% Growth |
|                                            |             |           |
|                                            | 2007        | next 5    |
|                                            |             | years     |
|                                            | (US\$       |           |
|                                            | Billion)    |           |
+--------------------------------------------+-------------+-----------+
| Water /Wastewater                          | 2.3         | 15%       |
+--------------------------------------------+-------------+-----------+
| \- water utilities                         | 2.0         |           |
+--------------------------------------------+-------------+-----------+
| \- industrial sector                       | 0.3         |           |
+--------------------------------------------+-------------+-----------+
| Solid Waste Management                     | 2.5         | 15%       |
+--------------------------------------------+-------------+-----------+
| \- urban cleaning and public waste         | 2.0         |           |
| management                                 |             |           |
+--------------------------------------------+-------------+-----------+
| \- private sector investments              | 0.5         |           |
+--------------------------------------------+-------------+-----------+
| Air Pollution Control                      | 0.4         | 20%       |
+--------------------------------------------+-------------+-----------+
| Environmental Technology Market            | 4.9         | 17%       |
+--------------------------------------------+-------------+-----------+

Source: All figures were estimated by market analysts.

**Water and Waste Water**

There is limited participation of international firms and private
Brazilian firms operating water / wastewater utilities in Brazil. The
Brazilian sanitation sector consists of 27 state owned companies,
autonomous municipal companies and municipal water departments.
International firms participate in this market through exports of
technologies, laboratory products and engineering services.

In order to sell to public sector companies in Brazil, Brazilian private
companies and international firms participate in open tenders, limited
tenders and sometimes pre-approved vendor lists. Utilities do not import
directly, but purchase from local suppliers or commercial
representatives of international companies.

New legislation (Law 11455 approved in January 2007, the Public
Consortium Law 11107/05) plus funds from the Program for Accelerated
Growth (PAC) and federal programs such as the Sanitation Social Action
Program (PASS) -- with partnership with the IDB and the "Sanitation for
All" program are expected to foster investments in the Brazilian
sanitation sector.

The Program for Accelerated Growth (PAC) attracted R\$ 40 billion (about
US\$ 20 billion) for the Brazilian sanitation sector (water, sewage,
solid waste, and rainwater) until 2010. The funds come from the federal,
state and municipal governments, as well as from private investors and
service providers. One of the objectives of the PAC is to stimulate
private sector investment.

Public-private partnerships (PPP) approved by the Federal Government in
2004 have the objective of attracting private investments to several
activities in Brazil. SABESP, the Sao Paulo state water / waste water
utility should be the first sanitation company to establish the
partnership, to increase the water production from 10,000 to 15,000
liters per second; expansion of the Taiaçupeba water treatment plant and
construction of 18 kilometers of water mains which will take the water
to four new storage reservoirs.

Business opportunities for international companies in the Brazilian
market are mostly for innovative solutions and technologies, rather than
supplies. Some of the critical segments in Brazil's water industry offer
potential for international technologies, particularly in the areas of
water loss and water reuse.

The water loss rate in Brazil corresponds to 40 to 50% of the potable
water produced in the urban areas. Losses that result from inaccurate
consumption metering and leakages are responsible for financial loss of
about US\$ 5 billion per year. Opportunities include complete solutions
related to water distribution systems, including services and equipment.

Water reuse is becoming increasingly important in Brazil, especially in
the large centers where water scarcity represents high operational costs
for water impounding and adduction. Recent legislation imposing charges
for collecting and disposing effluents in water bodies, increases the
demand for specialized consulting services and effluent treatment
technologies.

> Air Pollution Control
>
> The need to comply with the existing legislation on pollution
> emissions, the reutilization of raw materials and adoption of
> environmentally friendly policies, determine investments in air
> pollution control equipment and services. Industry experts estimate
> that this market is to increase by about 20% per year. In addition to
> the industrial market, the increased number of CDM projects in
> sanitary landfills in Brazil, is also creating a demand for gas
> emission monitoring technologies.

**Solid Waste**

Although urban cleaning and public waste management services are under
the responsibility of municipalities, some major private sector
companies participate through contracts or long-term concessions. In
addition, there are several Brazilian manufacturers of solid waste
treatment equipment. There are also a number of companies, several of
them international firms, in the business of hazardous waste treatment.
All of these companies visit solid waste expositions in the United
States.

Figures from the Brazilian Association of Urban Cleaning and Hazardous
Waste Collection and Treatment Companies (ABRELPE), indicate that the
sector generates annual revenues of R\$ 5 billion (US\$ 2.17 billion),
has a fleet of 9,600 compactor trucks and invest R\$ 300 million (US\$
130 million) in compactor trucks / year. Investments in sanitary and
hazardous waste landfills are expanding significantly, as 90% of
Brazil's 5,562 municipalities lack sanitary landfills for waste
disposal.

Although smaller than the public sector, the private sector is an
important market for pollution control technologies. Some of the driving
forces affecting this market are stricter environmental legislation,
pressure from communities and clients, the introduction of environmental
management practices by a growing number of industries and increased
number of industries with ISO 14001 certificates. The ISO 14001
certificate requires continuing improvement in production processes and
adoption of pollution prevention measures. Industries in Brazil demand
technologies for water reuse, solid waste treatment, recycling, CDM for
greenhouse gases, etc.

**Participation of U.S. companies**

U.S. companies generally export products such as soil/water
contamination treatment equipment and services; healthcare waste
treatment technologies; laboratory instruments; odor control products,
recycling technologies, etc.

**Resources**

-   For more information about export opportunities in this sector
    contact US Commercial Service Industry Specialist Teresa Wagner at:
    <Teresa.Wagner@mail.doc.gov>

-   For access to further Market Research, please go to
    [www.export.gov/marketresearch](http://www.export.gov/marketresearch)

-   With offices in Brasilia, São Paulo, Rio de Janeiro & Belo
    Horizonte, the US Commercial Service Brazil
    ([www.buyusa.gov/brazil](http://www.buyusa.gov/brazil)) helps US
    exporters enter Brazil's market through research, matchmaking and
    advocacy. To the best of our knowledge the information in this
    report is accurate - however readers should conduct their own due
    diligence before entering into business ventures.

*Disclaimer: The information provided in this report is intended to be
of assistance to U.S. exporters. While we make every effort to ensure
its accuracy, neither the United States government nor any of its
employees make any representation as to the accuracy or completeness of
information in this or any other United States government document.
Readers are advised to independently verify any information prior to
reliance thereon. The information provided in this report does not
constitute legal advice.*

*International copyright, U.S. Department of Commerce, 2006. All rights
reserved outside of the United States.*