Brazil’s New Emissions Trading System – Expectations versus Reality

The carbon market is a reality but must still be legally established in Brazil. Bill 182/2024 should create the Brazilian Emissions Trading System and pave this path.


The proposed model is based on a tool adopted in some of the world’s leading economies, a reference for its ability to stimulate reductions in a country’s emissions. From this perspective, the model is based on an internationally trending policy and represents one of the leading market solutions in combating climate change.

In addition to expressing concern for traditional communities (such as Indigenous peoples and Quilombolas) by establishing minimum rules to ensure that carbon credit negotiations respect these communities, the project will also allocate the resources eventually raised to research and development activities that seek new solutions for the decarbonization of the economy, focusing on technological innovation and sustainability.


Initially proposed by the Executive, the bill underwent several “surgeries” while being processed by the Chamber and Senate.

The organizations of the Climate Observatory—OC (more than 100 currently) analyzed “Frankenstein” and made the critical points public through a technical note.

Here are some essential points:

Loophole for illegal deforestation

According to the organizations, PL 182/2024 is confusing when dealing with REDD+ (Reducing Emissions from Deforestation and Forest Degradation). The wording approved by the Chamber proposes accounting systems that could result in double or even multiple counting of credits. This would affect the credibility of REDD+ and emissions measurements in the country, compromising the attraction of resources for the future carbon credits market and for financing environmental conservation.

If the PL is turned into law, each farmer in Brazil will be able to remove their property from national accounting (which should be unique and federal) and generate credits from it for the market. This could occur even if the property has illegal deforestation.

Indigenous peoples, Quilombolas, and traditional communities

Another problem with the text approved by the Chamber is article 47 of PL 182/2024, which defines minimum percentages of 50% of carbon credits and 70% of those resulting from REDD+* projects for Indigenous peoples, Quilombola communities and other peoples and communities traditional. REDD+ stands for Reducing Emissions from Deforestation and Forest Degradation (REDD) and also includes the conservation and increase of forest carbon stocks and sustainable forest management (REDD+).

For the OC, it is important to move forward in establishing criteria that ensure justice and equity in the distribution of benefits for different types of projects. The approved text, however, does not present the criteria for defining such percentages. Furthermore, no entity representing indigenous peoples, Quilombola communities, or other traditional peoples and communities was consulted.

The note includes other observations, and it concludes that emissions trading is positive as long as civil society is truly heard and their opinions are incorporated in a systematic way.

This Post was submitted by Climate Scorecard Brazil Country Manager Carlos Alexandre de Oliveira


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