The growing concern about climate change has led several countries to implement standards and adopt stricter measures to reduce greenhouse gas (GHG) emissions. After years of negotiations in the Brazilian National Congress, on December 11, Bill of Law 182/24 – which provided for the regulation of the carbon market in Brazil – was converted without vetoes by the President of the Republic into Law 15,042/24.

The new legislation provides rules for the pricing and the development of a regulated carbon market in Brazil, by establishing a cap-and-trade system, named Brazilian Greenhouse Gas Emissions Trading System (SBCE or, in Portuguese, Sistema Brasileiro de Comércio de Emissões de Gases de Efeito Estufa). Under this system, companies will be subject to a maximum limit of GHG emissions (cap), to be determined by regulatory norms.

According to the law, the surplus of GHG reductions or removals can be converted into carbon credits within the scope of the voluntary market. Once the criteria established by law have been met, these credits may be registered in the regulated market as certificates of verified emission reduction or removal (CRVEs or, in Portuguese, certificados de redução ou remoção verificada de emissões) and sold to other companies that emit quantities of GHG above the limit and, therefore, need to acquire credits to offset their emissions (trade).

The CRVE indicates the amount of carbon removed from the atmosphere. Each certificate corresponds to1 tCO2e (ton of carbon dioxide equivalent). On the other hand, regulated companies will have the right to issue an specific amount of GHG, to be defined by the management body. The right to issue 1 tCO2e is denoted by the asset known as the Brazilian Emissions Quota (CBE or, in Portuguese, Cota Brasileira de Emissões).

Within the scope of the regulated market, when traded in the financial or capital market, such assets are classified by the SBCE as securities. In these cases, the Brazilian Securities and Exchange Commission (CVM or, in Portuguese, Comissão de Valores Mobiliários) regulates the trading of assets. Within the scope of the voluntary market, carbon credits are treated as civil fruits, except for those originating from jurisdictional programs.

SBCE Governance

In view of the segmentation between the regulated and voluntary carbon credit market, an Interministerial Committee on Climate Change (CIM or, in Portuguese, Comitê Interministerial sobre Mudança de Clima) was foreseen by means of the law. This committee will comprise a management body, responsible for establishing standards and applying sanctions, and a permanent technical advisory committee, responsible for presenting subsidies and recommendations aiming at the improvement of SBCE.

To enable the implementation of SBCE, the National Allocation Plan will be created, which will establish parameters and limits for each period of compliance with GHG emission reduction targets, such as:

  • the maximum emissions limit;
  • the number of CBEs to be allocated among operators;
  • the ways of allocation of CBEs (free or onerous), for regulated facilities and sources;
  • the maximum percentage of CRVEs allowed in the periodic reconciliation of obligations;
  • the management and operationalization of the price stabilization mechanisms of the assets that are part of the SBCEs, ensuring the economic incentive to reduce emissions or remove GHGs; and
  • the criteria for transactions of net removals of GHG emissions.

Companies subject to the regulation and obligations


Operators of sources (which is a process or activity whose operation releases GHG, aerosol or GHG precursor into the atmosphere) or facilities (where one or more GHG sources are located) whose emissions exceed 10 thousand tCO2e per year are subject to SBCE regulation, except for primary agricultural production.

Companies with emissions between 10,000 and 25,000 tCO2e must submit monitoring plans and annual reports on GHG emissions and removals. Those with emissions greater than 25 thousand tCO2e per year, on the other hand, have the additional obligation to periodically reconcile their emissions.

Agents involved


The rule provides for the various agents involved:

  • Certifier of carbon credit projects or programs: referred as the entity that holds carbon credit certification methodologies and verifies the application of these methodologies, with monitoring, reporting and verification criteria for projects or programs to reduce emissions or remove GHG.
  • Carbon credit or CRVE project generator: individual or legal entity, indigenous peoples or traditional peoples and communities that have the concession, ownership or legitimate usufruct of an asset or activity that constitutes the grounds for projects to reduce emissions or remove GHG.
  • Carbon credit or CRVE project developer: legal entity, admitting plurality, that implements a carbon credit generation project or CRVE, in association with its generator, in cases where the developer and the generator are different, based on a methodology that involves funding, providing technical assistance or otherwise.

The regulated agent within the SBCE is entitled as "operator". The operator is the individual or legal entity, Brazilian or constituted in accordance with the laws of the country, which holds – directly or through some legal instrument - an installation or source associated with some GHG emitting activity.

Areas suitable for the generation of carbon credits and CRVEs


According to the rule, the following areas were considered eligible for the development of projects and programs for the generation of carbon credits and CRVE:

  • federal, state or municipal conservation units, as long as it is not prohibited by the unit's management plan;
  • public domain properties, provided that the usufruct is not owned by the public entity that owns the property;
  • private use properties;
  • indigenous lands, quilombola territories and other areas traditionally occupied by traditional peoples and communities;
  • lots of agrarian settlement projects;
  • conservation units for sustainable use;
  • undesignated public forests;
  • permanent preservation areas, legal reserve areas) or areas of restricted use , as long as they are settled for recomposition, maintenance and/or conservation; and
  • other areas, as long as there is no express legal prohibition.

Ownership of carbon credits

Originally, the ownership of carbon credits belongs to the generator of the carbon credit project or CRVE. However, it is possible to adjust the contractual provision for sharing or assigning these credits in projects carried out in partnership with developers, who also become holders.

Taxation of assets

The gains arising from the sale of SBCE assets are taxed by the Income Tax (IR or, in Portuguese, imposto sobre a renda e proventos de qualquer natureza). The amount varies according to the regime in which the taxpayer is classified and the gains from the operations, allowing the deduction of certain expenses from the IR calculation basis.

REDD+ and carbon credit programs and projects

REDD+ programs and projects are classified as projects developed to reduce GHG emissions from deforestation and forest degradation, conserve forest carbon stocks, manage forests sustainably, and increase forest carbon stocks. These projects were objectively defined in Law 15,042/24, according to the respective specifications, as explained below.

  • State programs "REDD+ non-market approach"

These programs involve policies and incentives for activities to reduce emissions from deforestation and forest degradation and increase carbon stocks through natural regeneration. They can receive payments for past results through a non-market approach. The allocation of results between the Union and the Federation Units must be observed. Legitimate owners and usufructuaries have the right to request the exclusion of their areas from these programs to avoid double counting in the generation of carbon credits.

  • Jurisdictional programs "REDD+ market approach"

These programs involve policies and incentives for the reduction of emissions from deforestation and forest degradation and the increase of carbon stocks with a market approach, including funding in the voluntary market, observing the allocation of results between the Union and the Federation Units. Legitimate owners and usufructuaries are guaranteed the receipt of revenues proportional to the remaining vegetation. Any advance sale referring to future periods is prohibited to avoid double counting.

  • Private carbon credit projects

Are defined as GHG reduction or removal projects for the generation of carbon credits, including REDD+ activities, developed by private entities (directly by generator or in partnership with a developer) in areas where the generator is a concessionaire or has legitimate ownership or usufruct.

  • Public carbon credit projects

Are qualified as GHG reduction or removal projects for the generation of carbon credits, including REDD+ activities, developed by public entities in areas where they have ownership and usufruct, as long as there is no overlap with areas of legitimate ownership or usufruct of third parties.

Transition period for the implementation of SBCE

In practice, the SBCE will not automatically take effect. Five phases were designed for its implementation:

  • Phase I: period of 12 months, extendable for another 12 months, for the enactment of the regulation of the law, counted from its entry into force;
  • Phase II: one-year period for operators to operationalize the instruments for reporting emissions;
  • Phase III: two-year period, in which operators will only be subject to the duty to submit a monitoring plan and report GHG emissions and removals to the SBCE management body;
  • Phase IV: validity of the first National Allocation Plan, with non-onerous distribution of CBEs and implementation of the SBCE asset market;
  • Phase V: full implementation of the SBCE, at the end of the term of the first National Allocation Plan.

Considerations and expectations

The enactment of Law 15,042/24 offers greater legal certainty for the trading of carbon credits in the country and meets a demand widely claimed by technical areas and scholars on the subject, in addition to bringing clear definitions of important terms for carbon trading. On the other hand, the rule depends on regulation, which naturally leads to gaps in its effective application.

Regardless of that, it is worth noting that the law’s enactment places Brazil in the group of countries that have a regulated carbon system, reinforcing its commitment to the decarbonization agenda and to its Nationally Determined Contribution (NDC or, in Portuguese, Contribuição Nacionalmente Determinada), which was updated and recently submitted to the United Nations Framework Convention on Climate Change (UNFCCC).

At COP29, held in November this year in Azerbaijan, Brazil reaffirmed its GHG reduction targets for 2035, with a cut of between 59% and 67% when compared to 2005 levels. This is equivalent to 850 million and 1.05 billion tons of CO₂eq in absolute terms, respectively.