BRAZIL Trends and Developments Contributed by: Thaís Vasconcellos de Sá and Ana Julia Grein Moniz de Aragão, Bermudes Advogados
tal systems – a step that will determine whether the reform achieves genuine simplification or merely cre- ates new layers of complexity under a unified frame- work. Brazil’s Carbon Market Enters the Implementation Phase Several major climate measures advanced in 2025 under the government’s Novo Brasil – Plano de Trans- formação Ecológica . Among them, the implementa- tion of Brazil’s carbon market stands out as a central pillar of the country’s strategy to reduce emissions and integrate climate policy with economic planning. Following the enactment of Law No 15,042/2024, which created the Brazilian Emissions Trading System (SBCE), 2025 marked the beginning of its regulatory roll-out. The system establishes a national, mandatory cap-and-trade scheme covering major emitting sec- tors and introduces tradable allowances (CBEs) and verified reductions (CRVEs). While the law itself was the major milestone of 2024, this past year’s focus has been on building the institutional architecture required for implementation. In October 2025, Decree No 12,677/2025 established the Extraordinary Secretariat for the Carbon Market within the Ministry of Finance as the temporary man- aging authority of the SBCE. This interim structure is responsible for preparing the first National Allocation Plan (PNA), developing the registry and MRV (moni- toring, reporting and verification) infrastructure, and defining thresholds and sectoral caps. In parallel, Decree No 12,779/2025 amended forest concession rules to let concessionaires select carbon-certification methodologies if the National REDD+ Commission has not issued guidance. The measure reflects the gov- ernment’s intent to accelerate credible forest-carbon projects and align them with the regulated market’s architecture. Implementation will follow a phased schedule. Over the next two years, companies exceeding 10,000 tCO₂e annually must begin structured emissions monitoring, while those above 25,000 tCO₂e will pre- pare for mandatory reconciliation through CBEs and CRVEs once the PNA takes effect. The first alloca- tion and auction of allowances is expected to occur after 2027, depending on the pace of rule-making.
Meanwhile, the Ministry of Finance has signalled that interoperability with voluntary carbon markets and international registries will be a core design principle, to ensure liquidity and global recognition of Brazilian credits. For businesses, the SBCE has already shifted climate governance from a reputational issue to a compli- ance obligation in formation. Companies are moving to standardise GHG inventories, enhance traceability and embed carbon pricing assumptions in investment models. The financial sector, in turn, is preparing prod- ucts and risk frameworks for trading carbon assets once the registry opens. The next couple of years will determine the cred- ibility and ambition of Brazil’s carbon market. If the institutional and technical foundations are completed on schedule, the country could emerge as a regional hub for regulated and voluntary carbon trading, link- ing environmental policy, finance and competitiveness under a single framework. Implementation of Brazil’s Sustainable Finance Policy Another central component of Brazil’s climate agenda is the implementation of its Sustainable Finance Pol- icy, led by the Securities and Exchange Commission (CVM), adopted in January 2023. The policy guided the 2023–24 Action Plan, which established 17 initia- tives across regulation, supervision, market guidance, investor education, and internal governance. In March 2025, according to the published execution report, 14 initiatives were fully completed and three partially implemented. Key achievements included the adop- tion of Resolution CVM 193/2023, introducing ISSB- based sustainability reporting (IFRS S1 and S2). The 2023–24 cycle also marked Brazil’s endorsement of the ISSB standards through Resolutions 217, 218 and 219, which made the new sustainability disclosure rules mandatory from 2026 and aligned reporting pro- cedures for voluntary adopters. The plan helped mod- ernise Brazil’s regulatory framework, curb greenwash- ing risks, and promote transparency in ESG reporting, while reinforcing the country’s international position in sustainable finance governance.
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