Brazil’s carbon market will not start before 2030

Brazil's carbon trading market will not be fully implemented in this decade, according to think tank Centro Brasil no Clima.

The creation of the carbon market is a long process that starts with passing a law to create a carbon market. But environmental groups and others have criticized Brazil's carbon market bill that the lower house approved at the end of last year as too complex. The senate has yet to set a timeline to debate the lower house's proposal but is expected to make significant changes to the bill, meaning that it will need to return to the lower legislature for a final round of voting.

Still, there is a growing expectation in the public and private sectors that the bill will pass ahead of the UN's Cop 29 climate conference later this year.

The think tank estimates that the implementation phase of the carbon market would take around 5-6 years under the current draft bill.

The preparation and legal framework for the creation of the market may take from 1-2 years. Pilot testing and initial rollout of the carbon market would take around a year. The submission of monitoring plans and emissions reporting would also be completed within 1-2 years after the pilot testing. But there is no clarity on a deadline for the phase that involves testing of the market with a full allocation of carbon credits, said William Wills, technical director at the think tank.

Only 25pc of the emissions produced in Brazil will be cover in the carbon market, he said. This includes emissions from energy, waste and industries, but the agriculture sector, which accounted for 27pc of greenhouse gas (GHG) emissions produced in the country in 2022, will be excluded. Brazil's largest source of GHG emissions comes from land use change and forestry, accounting for 48pc of emissions in the same period.

By Jacqueline Echevarria