1. Themes
  2. Carbon Markets
  3. Domestic Carbon Markets

Domestic Carbon Markets

Domestic carbon markets, which exist separate from international exchanges, can support NDCs and country-level platforms.

2030 Goals

01

Fully operationalize the regulated carbon market, covering all major emitting sectors and ensuring robust MRV compliance.

02

Operationalize the Brazilian Emissions Trading System with a functioning national registry, allocation plan, monitoring, reporting, and verification systems, and an active secondary market.

03

Complement market pricing with fiscal instruments by assessing the introduction of a carbon tax or hybrid mechanism to expand coverage beyond sectors regulated by the Brazilian Emissions Trading System.

04

Integrate voluntary and compliance markets by recognizing high-integrity voluntary carbon credits and linking them to the Brazilian Emissions Trading System, while ensuring environmental integrity and avoiding double counting.

Status

No Progress

Brazil enacted a new climate law in 2024 creating the Brazilian Emissions Trading System, its first regulated carbon market. The law defines tradable assets (emission allowances and verified reductions), establishes compliance entities, and creates a governing authority and national registry. This is a major structural reform still in its early phase. The legal framework is approved; assets are defined; a national authority and registry are created on paper.

Secondary regulations remain undefined, including allocation methodology, monitoring, reporting and verification protocols, sectoral coverage, trading platform design, and rules for international transfers under Article 6 of the Paris Agreement.

Brazil does not currently have a carbon tax. Carbon pricing instruments are limited to the forthcoming Brazilian Emissions Trading System and the voluntary offset market.

Brazil has a large voluntary carbon market, especially in forest-based projects such as REDD+. Several leading companies, including Vale, Suzano, and JBS, have net-zero commitments, though integrity and consistency of targets vary.

Leading Actors

Cooperation is required between these actors and audiences to drive progress foward in Domestic Carbon Markets.

Private Financial Institutions

Itaú

Private Financial Institutions

BTG Pactual

Private Financial Institutions

Santander (CIB)

Public Financial Institutions

Brazilian Development Bank (BNDES)

Multilateral Development Banks

World Bank

Multilateral Development Banks

Inter-American Development Bank (IDB)

International Organizations

United Nations Framework Convention on Climate Change (UNFCCC)

International Organizations

International Carbon Action Partnership

Ministries

Ministry of Finance (MF)

Ministries

Ministry of Environment and Climate Change (MMA)

Ministries

Ministry of Agriculture and Livestock (MAPA)

Other Governmental Organizations

Interministerial Committee on Climate Change and Green Growth (CIMV)

Other Governmental Organizations

Brazilian Institute of Environment and Renewable Natural Resources (IBAMA)

Other Governmental Organizations

National Electric Energy Agency (ANEEL)

Other Governmental Organizations

National Agency of Petroleum, Natural Gas and Biofuels (ANP)

Other Governmental Organizations

National Institute of Metrology, Standardization and Industrial Quality (INMETRO)

Supportive Stakeholders

GHG Protocol Brazil

Supportive Stakeholders

Observatório do Clima

Supportive Stakeholders

Ambipar

Supportive Stakeholders

Carbonext

Key Milestones

Showcasing the key reform milestones for Domestic Carbon Markets that have been addressed at global events.

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New York, US

UN Forum on Forests (UNFF21)

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  • International Carbon Markets

    Embed robust monitoring, reporting, and verification (MRV) and social safeguards across all transfers.

  • Domestic Carbon Markets

    Integrate land-use and Reducing Emissions from Deforestation and Forest Degradation (REDD+) credits with environmental integrity safeguards.

Location TBC

Latin America Climate Summit (LACS)

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  • Domestic Carbon Markets

    Operationalize the Brazilian Emissions Trading System (across all five phases).

  • Monetary Policy, Financial Regulation, and Supervision

    Pilot climate-compatible collateral policies (e.g., disclosure-based eligibility or haircuts) subject to strict integrity criteria and periodic review.

New York, US

UNGA High-Level Week - United Nations General Assembly

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  • Domestic Carbon Markets

    Channel revenues toward inclusive low-carbon development.

  • Enhancing Cooperation Across Development Banks

    Implement targeted fiscal measures for agriculture, energy-intensive industries, and transportation, which remain largely outside direct emissions regulation

Learn More

Publications and educational material to deepen understanding of Domestic Carbon Markets.

Brazil’s Roadmap for a High-Integrity Emissions-Trading System

Domestic Carbon Markets

Report presenting Brazil’s roadmap for a high-integrity emissions trading system.

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President Lula signs law creating regulated carbon market in Brazil

Domestic Carbon Markets

Official announcement of the law creating a regulated national carbon market in Brazil.

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Fases de Implementação do Mercado de Carbono no Brasil

Domestic Carbon Markets

Details of the five phases for implementing Brazil’s regulated carbon market.

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