Brazil’s government is aiming to establish a regulated carbon market to impose emissions limits on major corporations, while simultaneously protecting the interests of indigenous communities engaged in carbon-offset schemes, as reported by Reuters on August 17. Under the forthcoming carbon market framework, companies emitting more than 25,000 tons of carbon dioxide (CO2) equivalent annually will encounter an emissions cap. These companies will also undergo two years of emissions monitoring prior to the implementation of the cap. Moreover, the legislation intends to lay down criteria governing transactions between carbon credit developers and indigenous communities, with the aim of fostering broad consensus and ensuring equitable terms for local communities.

The proposed emissions cap is poised to have implications for various industries, including oil and gas, steel, cement, aluminum, and meatpacking. Despite this, the targeted companies constitute only 0.1% of all Brazilian companies, yet they contribute nearly half of the nation’s total emissions. In addition, this move to establish a carbon market forms part of a comprehensive set of energy transition-related initiatives that the Brazilian Congress is set to unveil in the next 100 days. These initiatives will encompass the regulation of offshore wind power and the expansion of renewable fuels utilization.

Sources:

https://www.reuters.com/sustainability/society-equity/brazil-govt-eyes-emissions-cap-indigenous-protections-new-carbon-market-2023-08-17/

https://www.reuters.com/world/americas/brazil-govt-pushes-congress-approve-green-bills-before-cop28-2023-08-18/