🇧🇷 Brazil takes a significant step towards carbon market regulation

The Chamber of Deputies in Brazil recently approved a crucial proposal (PL 2.148/15) aimed at regulating the carbon market in the country. The approved text introduces the Brazilian Greenhouse Gas Emissions Trading System (SBCE), setting emissions ceilings and creating a bond sales market.

This move is part of Brazil's broader green agenda, which includes initiatives like wind energy exploration at sea and green hydrogen production.

The core idea behind the proposal is to establish emission limits for companies, requiring those exceeding the limits to offset their emissions by purchasing bonds. Conversely, companies staying below the limits will gain shares that can be traded on the market.

The mechanism is inspired by successful international models, providing incentives for environmentally efficient companies and imposing costs on those exceeding emissions limits.

Brazil, currently one of the largest global emitters of greenhouse gases, aims to use this regulatory framework to incentivize companies to reduce emissions and mitigate climate impacts. The proposal addresses various sectors, including a provision for environmental compensation for gas emissions from motor vehicles through the purchase of carbon credits by vehicle owners.

Under the proposed system, actions leading to credit generation include the restoration, maintenance, and conservation of specific areas. Indigenous peoples and traditional communities are allowed to participate in the market through associations. The regulated market will involve compensation titles and credits for greenhouse gas emissions, linked to the SBCE.

The proposal establishes a regulatory framework for activities emitting over 10,000 tons of carbon dioxide equivalent (tCO2e) per year. Companies emitting between 10´000 and 25´000 tCO2e annually must mandatorily report their emissions without having a reduction target, while entities emitting more than 25´000 tCO2e per year are compelled to actively reduce their emissions.

Additionally, the proposal extends to a voluntary market for carbon credits generated outside the regulated market. While the proposal has been lauded for its potential to curb emissions and drive innovation, it has also faced criticism from some civil society organizations and experts. Concerns center on the potential for the voluntary market to undermine the effectiveness of the regulated market, as companies may prioritize purchasing carbon credits from the voluntary market over reducing their emissions directly.

One significant point of contention revolves around the rights of indigenous and traditional communities, especially in the Amazon. The proposal aims to protect these communities by requiring prior, free, and informed consent for initiatives within their territories.

Brazil's move to regulate the carbon market reflects a commitment to addressing climate change by curbing emissions and encouraging sustainable practices. While the proposal has faced criticism, it represents a significant step forward in aligning Brazil's economic activities with global environmental goals.

The coming phases of implementation will be crucial in realizing the potential benefits of the Brazilian Greenhouse Gas Emissions Trading System.

𝘓𝘢𝘵𝘢𝘮 𝘒𝘯𝘰𝘸𝘭𝘦𝘥𝘨𝘦 𝘋𝘳𝘰𝘱𝘴 𝘪𝘴 𝘵𝘩𝘦 𝘐𝘯𝘴𝘵𝘪𝘵𝘶𝘵𝘦'𝘴 𝘯𝘦𝘸 𝘴𝘦𝘳𝘪𝘦𝘴 𝘰𝘧 𝘤𝘰𝘯𝘵𝘦𝘯𝘵 𝘳𝘦𝘭𝘢𝘵𝘦𝘥 𝘵𝘰 𝘓𝘢𝘵𝘪𝘯 𝘈𝘮𝘦𝘳𝘪𝘤𝘢. 𝘓𝘦𝘢𝘷𝘦 𝘺𝘰𝘶𝘳 𝘤𝘰𝘮𝘮𝘦𝘯𝘵𝘴 𝘢𝘯𝘥 𝘴𝘶𝘨𝘨𝘦𝘴𝘵𝘪𝘰𝘯𝘴 𝘧𝘰𝘳 𝘧𝘶𝘵𝘶𝘳𝘦 𝘵𝘰𝘱𝘪𝘤𝘴. 🌎