New Brazilian Decree on Greenhouse Gas Emissions

On 19 May 2022, the Brazilian Government published the Federal Decree No. 11.075/2022, which creates the National System for the Reduction of Greenhouse Gas Emissions (SINARE) and establishes the procedure for the elaboration of Sectorial Plans for Mitigation of Climate Changes.

The Scope of the Decree

The Decree provides that it is incumbent upon the Ministry of Environment, the Ministry of Economy and related Ministries, to propose Sectorial Plans for Mitigation of Climate Changes.

The Sectorial Plans for Mitigation of Climate Changes shall establish gradual targets for the reduction of anthropogenic emissions and removal of greenhouse gases, measurable and verifiable, considering the individualities of the agents of the industry.

The Decree creates the National System for the Reduction of Greenhouse Gas Emissions (SINARE), which has the purpose of serving as a single center for recording emissions, removals, reductions and offsets of greenhouse gases and acts of trade, transfers, and transactions of certified emission reduction credits.

The new rules establish the following concepts, amongst others:

- Carbon credit: a financial, environmental, and transferable asset representing the reduction or removal of one ton of carbon dioxide equivalent, which has been recognised and issued as a credit in the voluntary or regulated market;

- Certified Emission Reduction Credit: a carbon credit which has been registered with SINARE;

- Offsetting Greenhouse Gas Emissions: a mechanism by which the company or individual offsets greenhouse gas emissions generated as a result of their activities, through their own removals accounted for in their inventory of greenhouse gases or through the acquisition of a certified emission reduction credit.

Remarks

The creation and regulation of a Brazilian Carbon Market, where carbon credits can be negotiated and offset, has been expected since the publishing of the Brazilian National Policy on Climate Change in 2009. The enactment of the Gas Emission Reduction Decree started the path towards the development of this market and, also, towards an environmental policy which is in line with the commitments undertaken by Brazil in the Paris Agreement.  

For further guidance on the Brazilian Gas Emission rules, please do not hesitate to contact the Authors below.