Brazil Advances Emissions Trading System with New Secretariat Ahead of COP-30

Brazil Solidifies Carbon Market Framework

Brazil's federal government is actively progressing with the implementation of its Greenhouse Gas Emissions Trading System (SBCE), a crucial component of the nation's strategy to combat climate change. Recent legislative actions, including the establishment of a new secretariat and amendments to existing laws, mark a significant push in preparation for the 30th United Nations Climate Change Conference (COP-30), which Brazil will host in Belém in November 2025.

Legislative Foundations and Phased Implementation

The foundation of Brazil's regulated carbon market is Law No. 15,042/2024, which came into force on December 12, 2024. This law establishes the SBCE, aiming to support the country's National Climate Change Policy and achieve its ambitious climate targets. The implementation of the SBCE is structured in five phases, designed to ensure a gradual adaptation for industries:

• Phase I: Government enacts necessary regulations (one to two years).
• Phase II: Regulated entities operationalize emissions monitoring and reporting (one year).
• Phase III: Regulated entities face monitoring and reporting obligations (two years).
• Phase IV: Implementation of the first national allocation plan with free allowance allocation.
• Phase V: Full operationalization of the SBCE following the end of the first national allocation plan.

The system is expected to be fully operational within five to six years of the law's adoption. The SBCE will impose compliance obligations on entities emitting more than 25,000 tCO2e per year, with reporting obligations for those emitting over 10,000 tCO2e per year. While it applies to most economic sectors, agricultural activities are explicitly exempt, and forestry activities are anticipated to generate carbon credits.

New Governance and Regulatory Adjustments

In October 2025, the Brazilian Federal Government published Decree No. 12,677/2025, creating the Extraordinary Secretariat for the Carbon Market within the Ministry of Finance. This secretariat will temporarily manage the SBCE until a permanent regulatory agency is established. Its responsibilities include regulating the market and its instruments, defining monitoring methodologies, identifying covered activities and facilities, and overseeing the accreditation processes for inspection bodies. The secretariat includes a Subsecretariat for Regulation and Methodologies and a Subsecretariat for Implementation.

Further decrees were also issued, including Decree No. 12,678/2025, which established the Department of Market Instruments and REDD+ within the Ministry of Environment and Climate Change, and designated the National Secretariat for Climate Change as Brazil's National Designated Authority under the Paris Agreement. Additionally, Decree No. 12,679/2025 amended the Public Forest Concessions Law, allowing concessionaires to select methodologies for certifying carbon projects within their concessions.

COP-30 and International Carbon Market Integration

These governmental actions, enacted just days before COP-30 commences on November 10, 2025, highlight Brazil's intensified focus on its climate agenda. As the host nation for COP-30, Brazil plans to present the 'Open Coalition for Carbon Market Integration.' This initiative, led by the Ministry of Finance, aims to harmonize standards and link existing carbon credit trading systems globally, fostering increased liquidity, predictability, and transparency in the sector. Brazil's climate targets include a 53.1% reduction in emissions below 2005 levels by 2030 and a long-term objective of achieving climate neutrality by 2050, with an updated Nationally Determined Contribution (NDC) submitted at COP29 targeting a 59% to 67% reduction by 2035 compared to 2005 levels.