The bill is criticized by environmentalists and supported by business groups, who argue that the changes will reduce red tape.

On Tuesday, the bill was passed by both the Senate’s Environment Committee (CMA) and its Agriculture and Agrarian Reform Committee (CRA). In the CMA, the Workers’ Party caucus and Senator Eliziane Gama voted against it. In the CRA, the government chose not to intervene or request a review, which could have delayed the vote.

In an unusual move, the bill was processed simultaneously by both committees, with different rapporteurs. Senator Confúcio Moura, aligned with the government, prepared the report for the Environment Committee, while former Agriculture Minister Tereza Cristina , now vice president of the FPA, handled the CRA version.

Amid diverging reports, Senate President Davi Alcolumbre, a supporter of the bill, coordinated a compromise text. In practice, Mr. Moura had to make concessions, and the version approved in committee incorporated the main demands of the FPA.

After the committee votes, Mr. Alcolumbre met with both rapporteurs and the Chief of Staff Minister Rui Costa, to finalize adjustments.

One of the most significant changes is the expansion of the Adherence and Commitment Environmental License (LAC), currently limited to low-impact activities. The revised bill allows it to be used by small and medium-sized projects deemed to have low or moderate environmental impact. The LAC would also apply to basic sanitation projects, which will remain a licensing priority.

The bill also reinstates large-scale, high-risk mining activities into the scope of the new General Environmental Licensing Law. Previously, such projects were excluded and regulated solely by the National Environmental Council (CONAMA) until a specific law was passed.

In addition, Mr. Moura accepted an amendment by Senator Mecias de Jesus adding strategic energy security projects to the list of activities eligible for priority processing and simplified licensing procedures. To qualify, such projects must be formally included in Brazil’s national energy plans and guidelines. The rule already applied to sanitation projects covered by the sector’s legal framework.

Another key provision was the Senate’s decision to preserve a clause from the Lower House that exempts the agricultural sector from licensing requirements, provided that the activities comply with Brazil’s Forest Code. This point had divided the rapporteurs, as Mr. Moura had initially supported a proposal by government leader Jaques Wagner to remove the exemption.

Tereza Cristina defended the bill, arguing that it does not weaken environmental protections. She pointed to a clause that doubles penalties for environmental crimes. “The law unlocks the process. It simplifies but doesn’t weaken it. Penalties for noncompliance are even harsher,” she said.

Senator Wagner, however, expressed concern about the risk of an “environmental war” similar to the past “tax war,” in which states and municipalities—who are responsible for licensing—might adopt looser rules to attract investment. “Whoever makes licensing easier will attract more projects. I think that’s a very risky transfer of power,” he warned.

Mr. Wagner also criticized the deadlines imposed on environmental agencies and the non-binding nature of their opinions. “To disregard technical bodies like Funai—which are consulted but not required to be followed—seriously undermines the process,” he said.

The proposal has divided President Lula’s administration. While ministries such as Transport and Cities support the bill, Environment Minister Marina Silva has called the Senate version “a major setback.”

The Planalto Palace interpreted Senate President Alcolumbre’s backing of the bill as retaliation against Ms. Silva. The motivation, officials believe, is her cautious stance—along with that of environmental agency Ibama—on oil exploration near the mouth of the Amazon River, in Brazil’s Equatorial Margin. The area includes the state of Amapá, which Mr. Alcolumbre represents.