Brazil to quicken carbon market launch by decree

The government plans to bypass the need for congressional legislation as it looks to develop its carbon market

Brazil plans to issue a decree this month to create a carbon market, rather than wait for legislation to be approved in congress. Creating a regulated carbon market through a presidential decree would allow Brazil to move quickly towards the development of a market, environment minister Joaquim Leite says.

Brazilian politicians had promised to hold a vote on the legislation earlier this year. The bill aims to create the regulatory framework for a broad carbon credit market based on a cap-and-trade model, but remains stuck in committee and could face delays because of October presidential elections.

As part of the decree, the government plans to create a centralised registry for carbon credits that would connect with trading platforms. Leite stresses that the local market needs to be integrated with international markets, to avoid passing the cost of the carbon credits on to Brazilian consumers. The government plans to hold an event later this month to launch the market.

Leite says Brazil's goal is to become a leading carbon credit exporter. He highlights opportunities to generate credits in a broad range of sectors, including forest restoration and preservation, energy and agriculture. Furthermore, because of the abundance of renewable power and natural resources, Leite expects Brazilian companies to offer carbon credits at globally competitive prices.

The government recently launched an initiative to create separate methane credits, as part of a broader initiative to provide incentives for investments in biomethane. The methane credits would be traded on the same platform.

As part of broader government efforts to develop a carbon market, development bank Bndes plans to hold a tender to purchase carbon credits next month. The tender is part of a programme at the bank to create liquidity in the voluntary carbon credit market.

Brazil CO2 emissions 2020