The Brazilian Senate approved on the day 4/10 the law project 412/2022, marking a significant advance in the regulation of the carbon market in the country. The initiative aims to integrate the voluntary carbon market with the regulated market, establishing criteria and limits for companies and individuals that emit above 10 thousand tons of carbon dioxide equivalent (tCO2e) per annum, with the exception of agribusiness. In this context, ICC Brasil and WayCarbon join forces to support the Ministry of Development, Industry, Commerce and Services (MDIC) in the preparation of the Brazilian Greenhouse Gas Emissions Trading System (SBCE).
Project's goal: Integrating Voluntary and Regulated Market
The project mainly aims to support the Federal Government in integrating the voluntary carbon market into the future Brazilian regulated market. WayCarbon and ICC Brasil will analyze international experiences, presenting recommendations for the accreditation of registration programs (standards) in the SBCE and the integration of these records into the Central Registry. The project, funded by UK PACT, seeks to consolidate the carbon market in Brazil, aligning it with global climate change mitigation practices.
Project phases: A Comprehensive Approach
The project is structured into five major activities. The first involves the production of technical documents to support Government decisions. Right away, will carry out engagement activities, training and dissemination of knowledge for government and market agents. Recommendations for the accreditation of registration programs will also be covered., based on international benchmarks. Integration of records into the Central Registry is the final phase, followed by training and engagement with the public and private sectors.
MRV Methodology: Rationale for Climate Action
The project adopts the MRV methodology (monitoring, Reporting and Verification) as a fundamental element. Within the scope of SBCE, o Monitoring, Reporting and Verification will occur through the Central Registry, consolidating information on GHG emissions and removals. The integration of offset records into the Central Registry will be carefully planned, considering international experiences and identifying synergies with projects under development.
Relationship between Regulated and Voluntary Market: A Necessary Synergy
Regulated and voluntary markets can coexist synergistically. Carbon credits from the voluntary market can be used as flexibility mechanisms (offsets) no regulated market, providing lower cost rebate options. This approach encourages mitigation in unregulated sectors, contributing to the effectiveness of the system as a whole.
Importance of Public-Private Partnership in Combating Climate Change
Partnership between public and private sectors is crucial in times of climate emergency. In addition to voluntary efforts from the private sector, Public policy guidance is essential to align mitigation actions with national climate goals. Cost-effective mechanisms, how the regulated carbon market, provide a more efficient path to achieving these goals, allowing transactions that benefit sectors with higher abatement costs.
In an interview with the WayCarbon blog, Bruna Araújo and Letícia Gavioli, and WayCarbon, highlighted the importance of this partnership and the role of the project in building a robust carbon market in Brazil. With support from MDIC and funding from UK PACT, the initiative aims not only to regulate, but also strengthen the foundations for the transition to a low-carbon economy in the country.
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