The Brazilian carbon credit market remains stalled, awaiting final approval of a Bill that has been in Congress for almost ten years.
There is no time to waste, say 59 entrepreneurs and executives in a manifesto released today. This is the same group that, amidst the wildfires, published a manifesto for an ‘economic pact with nature’.
“The immediate critical step, necessary to strengthen Brazil’s position in the fight against global warming and its effects, is the approval of the Carbon Market Bill,” the text states. “This is a fundamental measure to stimulate the development of low-carbon technologies, accredit Brazil to play a more relevant role in the global discussions that will take place at the upcoming COP29, and open new opportunities for wealth generation.”
The impact of the previous manifesto encouraged entrepreneurs to expand their action in favor of the environment and exert political pressure for the approval of the Bill.
“The only way to provoke global decarbonization is by pricing carbon,” said Horacio Lafer Piva, chairman of Klabin, to Brazil Journal. “If we don’t price carbon, we won’t be able to get economic actors to invest in the decarbonization process.”
Large companies in the agribusiness sector already have millions of certified credits ready to be traded, but according to entrepreneurs and executives, current prices in the voluntary market are minimal.
For this market to emerge, it requires a legal framework – which in the future may allow for the international trading of credits.
Bill 2.148/15, known as the Carbon Market Bill, was approved by deputies in December. It is now awaiting a vote in the Senate and will then have to pass through the Chamber again.
The bill establishes the Brazilian Greenhouse Gas Emissions Trading System (SBCE).
One of its pillars is the establishment of emission limits, forcing a reduction in carbon footprint and the purchase of compensatory credits – which is expected to finally advance the business in Brazil.
The reference unit is the ton of carbon dioxide equivalent (tCO2e).
Companies emitting above 10,000 tCO2e will fall under the new regulation and will need to maintain monitoring plans. Those emitting more than 25,000 tCO2e will have to present reduction and compensation plans. Non-compliance fines will be up to 3% of gross revenue.
“With a regulated market, there will be the collateral advantage of partnerships with other regulated markets,” said Walter Schalka, advisor to Suzano and Vibra.
“We see the potential to generate a lot of value for society,” said Schalka. “Brazil, which is already a low carbon emitter, may emit even less and at the same time address the issue of industrial decarbonization and attract investments in forest preservation.”
An estimate made in 2022 by the International Chamber of Commerce Brazil (ICC Brazil) and WayCarbon estimated that Brazil could negotiate up to US$120 billion in credits by 2030, considering a scenario with the ton valued at US$100. (In the European Union, the price is around US$60).
These potential billions are trapped by the lack of a legal framework and its regulation.
Below is the text of the entrepreneurs’ manifesto and the list of their supporters.
FOR THE APPROVAL OF THE CARBON MARKET BILL
Senators,
Recently, we spoke out in defense of an ‘Economic pact with nature.’ The floods in Rio Grande do Sul and the significant incidence of fires throughout the country – which have only worsened since then – led us to consider a public position in favor of nature.
Continuing this momentum, we believe that the immediate critical step, necessary to strengthen Brazil’s position in the fight against global warming and its effects, is the approval of the Carbon Market Bill. This is a fundamental measure to stimulate the development of low-carbon technologies, accredit Brazil to play a more relevant role in the global discussions that will take place at the upcoming COP29, to be held in a few weeks, and open new opportunities for wealth generation.
There is no time to lose!
WHO SIGNS
Álvaro de Souza
Ana Maria Diniz
Ana Paula Pessoa
…
Walter Schalka
Source
Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
