The Brazilian National Congress is advancing in negotiations to approve the regulation of the carbon market, aiming to vote on Bill No. 182/2024 before COP 29, which will be held between November 11th and 22nd in Baku, Azerbaijan. The urgency in the process is motivated by the relevance that Brazil seeks to exert in the international climate debate, especially in view of COP 30, which will take place in Belém, Pará, in 2025.
The carbon market is a system through which companies and nations can offset their greenhouse gas (GHG) emissions through the acquisition of credits linked to environmental initiatives. These credits are generated from preservation, reforestation projects or technologies that reduce GHG emissions, promoting sustainability.
There are two sectors in this market: the regulated and the voluntary. The first involves initiatives that comply with international standards, such as the Kyoto Protocol, and is applicable to companies that emit more than 10 thousand tons of CO2 equivalent (CO2eq) per year. The voluntary sector is more flexible, allowing non-obligated entities to voluntarily offset their emissions.
The regulatory structure under discussion includes the creation of a management body, responsible for monitoring, supervising and approving the credits issued, as well as applying sanctions. In addition, the project foresees the implementation of a Brazilian Greenhouse Gas Emissions Trading System (SBCE), essential to guarantee the transparency and legitimacy of credit transactions.
The senators and deputies leading the negotiations seek to approve a consensual version of the proposal by November. The intention is to present solid legislation at COP 29, which will strengthen Brazil's position in global negotiations on climate change.
Although there is alignment on many points, one of the main impasses involves the allocation of at least 70% of the profits generated by the sale of carbon credits to indigenous peoples, quilombolas and settlers. The proposal raises debates about the best way to ensure this redistribution in an efficient and fair manner. The possibility of regulating this point by presidential decree is also under discussion, raising concerns about the legal stability of the benefit.
Approving the regulation before COP 29 would give Brazil a competitive advantage, since the country could present itself as a reference model in the construction of robust and inclusive carbon markets. At COP 30, in Belém, the regulation will play an even more important role, consolidating Brazil's leadership in the global environmental agenda and reinforcing climate neutrality commitments.
With a regulated market, Brazilian and international companies will be able to negotiate Brazilian Emissions Quotas (CBE) and Verified Emissions Reduction or Removal Certificates (CRVE). The approval will also allow integration with international markets, such as the European Union Emissions Trading System (EU ETS), promoting greater liquidity and competitiveness in the Brazilian market.
Adopting the carbon market presents a series of benefits. In addition to encouraging a low-carbon economy, it promotes technological innovation and the conservation of critical ecosystems like the Amazon. However, challenges remain, such as rigorously monitoring emissions and ensuring that negotiated credits actually represent real GHG reductions.
Another essential point is the participation of agribusiness, a sector vital to the Brazilian economy. Although the current project does not foresee the mandatory inclusion of this sector in the regulated market, there are expectations that future adjustments can integrate rural producers more broadly, valuing sustainable practices and encouraging the generation of additional credits.
Regulation of the carbon market in Brazil is an expected milestone not only for the national agenda, but also for the country's strategic positioning on the international scene. By approving legislation ahead of COP 29, Brazil places itself at the forefront of climate policy, demonstrating a renewed commitment to mitigating climate change and transitioning to a sustainable economy.
With COP 30 on the horizon, the carbon market can consolidate itself as a central pillar in building a green and inclusive economy, benefiting both the private sector and traditional communities. Legislative and institutional alignment is fundamental for the country to reap the fruits of this system, becoming a reference in sustainability and emissions trading.
Amazon Connection Carbon (ACC) underscores the significance of carbon market regulation as a crucial tool for mitigating climate change and fostering global sustainability. As an Amazon-based company committed to environmental preservation and the development of innovative solutions to reduce greenhouse gas (GHG) emissions, ACC views the regulation of this market as a fundamental step in linking sustainable practices with impactful global investments.
ACC operates through initiatives such as the trading of carbon credits, forest inventories, and project certification. These actions ensure that every credit traded results in tangible emission reductions and contributes to the preservation of the Amazon, one of the planet’s most vital ecosystems. The company further emphasizes that regulated markets, like the one currently under discussion in Congress, enhance the credibility and security of transactions—critical elements for attracting investors and advancing the green economy.
For ACC, the establishment of a structured carbon market will pave the way for an effective transition to a low-carbon economy, benefiting both businesses and local communities, particularly indigenous peoples and land reform settlers. Drawing from its expertise in carbon credit measurement and certification, ACC stresses that robust regulation is essential to safeguarding environmental integrity and promoting sustainable economic development. This, in turn, positions Brazil as a global leader, leveraging its natural and institutional resources to shape the outcomes of future climate conferences, including COP 29 and COP 30.
By fostering integrated and effective public policies, the carbon market has the potential to transform environmental challenges into economic opportunities, reinforcing Brazil’s role as a driving force in the global fight against climate change. ACC reaffirms its commitment to this cause, inviting companies and organizations to join this journey toward a more sustainable and resilient future.
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