The IP.rec (Law and Technology Research Institute of Recife) expresses concern regarding the manner in which REDATA has been conducted. The proposal has been presented as a major opportunity for Brazil; however, it prioritizes broad and immediate tax incentives without clear guarantees of meaningful social development. Data centers are highly automated facilities, generate few permanent jobs, and require significant volumes of energy and infrastructure. In the absence of defined countervailing obligations, they may operate as enclaves: utilizing local resources while the gains remain concentrated.

REDATA was initially established by Provisional Measure No. 1,318/2025, which creates a special tax regime designed to attract data centers to the country through tax exemptions and is primarily structured as a fiscal waiver regime. It reduces taxes in the present, based on the expectation that future investments will generate economic returns. The issue is that data centers are highly automated enterprises which, once constructed, create few permanent jobs, consume large amounts of energy, and demand robust electrical and water infrastructure. Without clearly defined obligations, they may function almost as enclaves: drawing upon local resources without necessarily strengthening the regional economy or expanding opportunities for the population.

The recent decision by the National Congress to convert the Provisional Measure that instituted REDATA into Bill No. 278/2026, approved under an expedited procedure in the Chamber of Deputies, demonstrates a preference for regulatory acceleration over the democratic construction of complex public policies. This abbreviated legislative process drastically reduces the time available for technical analysis, limits the participation of affected stakeholders—such as local communities, researchers, and experts in energy and environmental justice—and sidelines voices that have, through studies and public statements, expressed substantial divergences regarding the proposed model.

We understand that public development policies cannot be limited to granting tax exemptions. They must foster capacity building, strengthen national value chains, promote research, create qualified employment, and improve living conditions in the territories where such enterprises are installed. Absent these measures, gains become concentrated while costs are socialized.

The prevailing logic of REDATA is fiscal and immediate. While attracting foreign capital may improve short-term indicators, it does not guarantee structural transformation. Utilizing renewable energy, land, and water—strategic and scarce assets—to enable processing activities predominantly oriented toward external markets, without requiring technology transfer or strengthening domestic industry, reproduces an extractive logic incompatible with a robust development strategy.

Social development, in turn, involves technical education, professional training, national innovation, strengthened local infrastructure, regional equity, and the reduction of inequalities. None of these outcomes can be presumed to result automatically from a fiscal waiver policy as currently proposed by the Federal Government. Data centers require constant and stable energy, which demands robust electrical networks and integrated planning. Without investments linked to the modernization of local electrical infrastructure, the installation of hyperscale data centers may strain regional systems and affect residential consumers, small businesses, and public services.

This debate is particularly sensitive in the Northeast, frequently portrayed as an ideal hub for the expansion of such enterprises. The region is already a net exporter of energy. If it begins to concentrate large data centers, especially those primarily serving external processing demands, it may accumulate energy and environmental impacts while value added and fiscal benefits migrate to other economic centers. The absence of regional requirements or countervailing obligations exacerbates this imbalance and undermines the promise of regional development.

In this scenario, so-called “sacrifice zones” may deepen: regions that concentrate environmental impacts, pressure on electrical and urban infrastructure, changes in land use, and social tensions, while the economic gains generated by these enterprises do not return in a fair or proportional manner to the local community.

Digital sovereignty cannot be reduced to the physical hosting of infrastructure. It requires strategic control, the strengthening of domestic enterprises, and the meaningful allocation of installed capacity to serve the internal market. Without these elements, Brazil risks becoming merely a supplier of energy and territory for global data processing. Rather than strengthening sovereignty, it may reproduce a historical pattern in which its resources are exploited to generate value abroad, while structural limitations persist domestically.

It is also concerning that several core elements of REDATA are deferred to future regulations, without clearly defined environmental, energy, and social criteria established directly in the law. The absence of objective and transparent parameters weakens public oversight and creates uncertainty regarding how the promised obligations will be enforced.

IP.rec maintains that any policy aimed at attracting data centers must place social development at its core, not treat it as an incidental byproduct. This entails ensuring clear and measurable obligations, mandating investments in local electrical infrastructure, requiring cumulative environmental impact assessments, protecting vulnerable territories, strengthening national production chains, guaranteeing meaningful processing for the domestic market, ensuring transparency regarding tax benefits granted, and linking incentives to the reduction of regional inequalities.

Digital transformation may represent a historic opportunity for Brazil. However, this will only be true if public incentives are conditioned upon structural public benefits. Without social development, territorial justice, and environmental responsibility, REDATA risks consolidating itself as a short-term fiscal policy that consumes strategic national resources without delivering proportional gains to Brazilian society.

We express our firm opposition to the expedited legislative procedure approved in the Chamber of Deputies, which seeks to bypass essential democratic stages during the pre-Carnival period, suppressing proper multistakeholder consultation and in-depth technical scrutiny. Legislative haste, in light of the imminent expiration of Provisional Measure No. 1,318/2025—soon to be replaced by Bill 278/26—cannot serve as justification for eliminating spaces of public debate and transparency, particularly when qualified stakeholders have already identified substantial structural, economic, and social risks in the proposed configuration of REDATA. The consolidation of high-impact public policies without meaningful public participation is, by its very nature, imprudent and hardly auspicious for a country that aspires to genuine digital sovereignty.