The Senate approved this Wednesday (13) the bill that regulates the carbon market in Brazil. The approval comes amid COP-29 in Azerbaijan and was the government’s desire to present during participation in the conference. The proposal, however, will need to return to the Chamber of Deputies to analyze the changes made by the senators.
The project allows the purchase and sale of carbon credits as a way of encouraging the reduction of greenhouse gas emissions, while also seeking to promote environmental preservation and the use of renewable energy.
The system allows companies and governments that emit less carbon to trade credits with those that exceed the limits, encouraging a general reduction in emissions. Furthermore, carbon credits can be generated through the preservation of green areas or through projects that promote the reduction of emissions, such as initiatives aimed at generating clean energy.
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In the approved text, states and the federal government will also be able to negotiate credits related to green areas on public lands. Private land or land granted to the private sector may generate credits, as long as there is authorization from the owner.
The project also guarantees the rights of indigenous and quilombola communities, with the allocation of at least 50% of the credits generated by gas removal projects and 70% in preservation projects.
The regulation creates two assets for trading: the Brazilian Emissions Quota (CBE), which authorizes a company to emit up to one ton of carbon dioxide, and the Verified Emissions Reduction or Removal Certificate (CRVE), which represents the reduction or removal of carbon by companies, governments or communities, also equivalent to one ton.
These assets can be traded at auctions and on the Stock Exchange. Companies that exceed their emission limits will have to purchase additional credits or permits to continue polluting, within the rules of the Brazilian Greenhouse Gas Emissions Trading System (SBCE).
The SBCE establishes an emissions ceiling for certain sectors, especially industries such as steel, cement and chemicals, which emit more than 25 thousand tons of CO2 annually. Companies with emissions exceeding 10,000 tonnes will need to report emissions annually, although they will not be required to reduce immediately, but will be “under observation”.
In the first two years, companies must report emissions to the government to create a reliable record that will inform the new system. In this initial period, emission licenses will be free, similar to the European Union model, allowing companies to adapt.
After this phase, companies that need to emit more than allowed will have to purchase credits from others that emit less or that work in carbon capture.
The trading of credits will be supervised by the Securities and Exchange Commission (CVM) and may occur on stock exchanges. The project also establishes the creation of an interministerial committee to monitor the flow of resources and the taxation of these assets, ensuring that the system works in an integrated and efficient manner.
