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PTReport presents recommendations for the country’s regulated carbon market
ICC Brazil and WayCarbon have released a jointly developed report to support the Federal Government in the technical structuring of the Brazilian Emissions Trading System (SBCE). The document provides technical input for discussions on the accreditation of methodologies and the definition of integrity criteria for the acceptance of offsets in the national regulated market. The study is part of an initiative funded by the UK PACT Brazil program, with the Ministry of Development, Industry, Trade, and Services (MDIC) as the direct beneficiary.
The study is based on Law No. 15,042 of 2024, which established the Brazilian system and sets forth the accreditation of methodologies for the use of carbon credits as offsets within the regulated market. Based on an analysis of guidance documents from 10 independent certification standards present in the country’s voluntary market, the report initially identified what would constitute minimum methodological requirements regarding additionality, baseline scenarios, and quantification of emission reductions or removals, among other aspects, which are fundamental to the quality and environmental integrity of the generated certificates. Based on these requirements; the rules, modalities, and procedures for the Article 6.4 mechanism of the Paris Agreement, and the Carbon Core Principles (CCP) of the Integrity Council for the Voluntary Carbon Market (ICVCM), a sample of 25 methodologies from those standards was then analyzed.
The purpose of the survey is not to determine which methodologies should be prioritized in the SBCE, but rather to provide the technical basis for future regulatory discussions in line with Brazil’s climate commitments and national priorities.
“This report was structured with the aim of contributing to the Federal Government’s discussions on building an effective Brazilian Emissions Trading System guided by high integrity. Our goal is to provide elements that help ensure that the verified emission reduction units ( ) generated in the country have the necessary investor confidence and are aligned with best practices and key international standards. “In addition to reducing compliance costs, this well-executed interaction between the regulated and voluntary markets can encourage decarbonization and new opportunities, including in sectors that may not be subject to regulation,” says Gabriella Dorlhiac, executive director of ICC Brazil.
The study considered methodologies across five scopes with significant representation in the country’s current voluntary carbon market: afforestation, reforestation, and revegetation (ARR); reducing emissions from deforestation and forest degradation (REDD+); improved forest management (IFM); agricultural land management (ALM); and biogas.
For nature-based solutions, for example, the document identifies the adoption of dynamic and jurisdictional baselines for forest conservation projects as a trend and highlights that methodologies generally recommend setting aside a portion of the generated emission reductions and/or removals—by placing a reserve of the generated units in a buffer account or guarantee fund—to minimize the risk of non-permanence associated with this type of project. In the case of methodologies used in sectors such as agriculture and biogas for electricity generation, the document highlights their applicability and adaptability to the Brazilian context, as well as the use of case studies as a best practice to facilitate project development.
“Carbon markets are essential mechanisms for promoting cost-effective emissions reductions, while also offering regulatory predictability and economic signals to companies. In this context, climate policies such as the SBCE are indispensable for accelerating the path toward a low-carbon economy,” says Henrique Pereira, COO and Co-founder of WayCarbon.
Key insights
One of the report’s main conclusions is that, to ensure the quality and integrity of credits in the regulated market, methodological criteria alone may not be sufficient. It is important that, in addition to the accreditation of methodologies, there be an evaluation of rules and additional elements of certification standards, the adoption of socio-environmental safeguards, and risk analyses that include socioeconomic, legal, and permanence aspects to protect the rights of traditional communities and small producers. It also concludes that such a multi- t assessment process should be conducted by verifiers who are recognized and accepted in international markets, but who are familiar with the Brazilian context and are accredited by a responsible Brazilian body.
The study further recommends that the SBCE’s managing body implement regular reassessment cycles to incorporate new methodologies or updated versions of existing ones, thereby ensuring that scientific advancements and new mitigation technologies are reflected in the methodologies accredited by the system.
Press information
Lucas Lopes |lucaslopes@agenciaecomunica.com.br | +55 11 99462-2705
Ligia Neiva |ligia@agenciaecomunica.com.br | +55 11 99463-3274
