Brazil’s Finance Ministry has introduced a preliminary strategy to gradually implement its regulated carbon market, known as the Brazilian Emissions Trading System (SBCE). The three-phase rollout is designed to give industrial sectors ample preparation time before mandatory greenhouse gas emissions reporting and compliance come into full effect.
The initiative builds upon the legal framework established by the country’s 2024 Carbon Market Law, operating on a cap-and-trade system. Under the new proposal, the regulations will apply to entities that emit more than 25,000 tonnes of carbon dioxide equivalent annually, with emissions tracking and reporting thresholds starting at 10,000 tonnes. To ensure a smooth transition, each sector will be granted a four-year window to adjust, dedicating the first year to drafting monitoring strategies, the middle two years to tracking emissions, and the final year to national allocation planning.
The integration schedule will progress in three distinct waves:
- Phase One (2027): Initial targets focus heavily on high-emission sectors, including paper and pulp, iron and steel, cement, primary aluminum, air transport, oil and gas exploration, and refining.
- Phase Two (2029): The framework will expand to encompass additional heavy industries, including mining, chemicals, and broader transport networks.
- Phase Three (2031): The final phase will integrate the remaining designated sectors, such as the electricity industry.
Until a permanent independent management body is formally established, the newly created Extraordinary Carbon Market Secretariat within the Finance Ministry will spearhead the rollout. The structured layout has been generally well-received by major industrial players, who note that the clear timelines offer the predictability necessary to safely plan long-term investments in low-carbon and green technologies.