By Douglas Alencar (Federal University of Pará) and Cláudio Puty (Federal University of Pará)
The approval by the Brazilian House of Representatives of the bill regulating the carbon market marks a significant milestone for the country’s environmental policies. The proposal establishes the Brazilian System for Trading Greenhouse Gas Emissions (SBCE), an initiative aimed at capping greenhouse gas emissions and fostering a more sustainable and climate-resilient economy.
The SBCE is designed to function as a regulated carbon credit market, allowing the trading of Brazilian Emission Quotas (CBE) and certificates of verified emissions reduction or removal (CRVE). Its implementation will occur gradually, with a six-year timeline for full operation.
Companies that exceed the greenhouse gas emission limits will be required to purchase credits to offset their environmental impact. Conversely, those emitting below the established cap will have the opportunity to sell their quotas on the market. This system promotes economic balance by providing financial incentives for more sustainable practices.
Initial regulations stipulate that only activities emitting over 10,000 tons of carbon dioxide equivalent (tCO2e) annually will fall under the legislation. Companies emitting between 10,000 and 25,000 tCO2e must submit monitoring plans and annual reports to the SBCE’s governing body, complying with rules defined by decree or specific acts. These thresholds may be adjusted in the future, considering IPCC guidelines and international climate agreements.
Despite its innovative approach, the project faces criticism and challenges. The agricultural sector, responsible for a significant share of Brazil’s carbon emissions, was excluded from the initial regulation. This decision reflects difficulties in measuring emissions in agricultural activities and pressure from economic sectors concerned about substantial financial impacts. This exclusion is controversial, given that land use and activities like illegal deforestation and burning are the largest sources of emissions in Brazil.
The regulation of the carbon market is part of a broader environmental agenda, the “green agenda,” which includes initiatives like offshore wind energy development and green hydrogen production. These efforts demonstrate Brazil’s growing commitment to transitioning to a low-carbon economy aligned with global climate goals.
Nevertheless, the project has drawn criticism for potentially shifting environmental responsibilities onto developing countries, a recurring concern in international climate agreements. The potential increase in costs for national productive sectors also remains a sensitive issue, particularly given regional economic inequalities.
The regulated carbon market represents an essential step toward adapting to climate change and promoting economic and environmental sustainability in Brazil. Beyond offering competitive advantages to companies adopting cleaner practices, the system establishes a clear framework for emissions reduction and compensation, encouraging technological innovation and energy efficiency.
Even sectors struggling to reduce emissions can benefit by using the carbon market to offset part of their impact. This flexibility is vital for ensuring the participation of various economic agents, particularly in a country with Brazil’s vast territorial and economic diversity.
The regulation of the carbon market in Brazil is a promising milestone, though it still requires adjustments and broader sectoral inclusion to realize its full potential. With careful implementation aligned with international best practices, the SBCE can not only contribute to reducing national emissions but also position Brazil as a leader in the global fight against climate change.
Source: Agência Câmara de Notícias
