Brazil is advancing implementation of its ETS, the Sistema Brasileiro de Comércio de Emissões (SBCE), under Law No. 15.042/2024. In recent months, two key areas – scope and governance – have seen significant progress.
Why this matters
The scope proposal sets a phased pathway for which sectors will face MRV requirements and, later, compliance, while new governance bodies clarify roles for oversight, MRV, and methodologies. Together, these steps move Brazil from rulemaking toward implementation, with full operationalization targeted for 2031.
Scope
In May 2026, the Ministry of Finance’s Extraordinary Secretariat for the Carbon Market (SEMC) presented a preliminary sectoral coverage proposal. The proposal outlines which industries will be subject to mandatory greenhouse gas MRV obligations – a necessary step towards setting compliance obligations.
The proposal foresees a phased inclusion of sectors:
- First group (from 2027): pulp and paper; iron and steel; cement; primary aluminum; oil and gas exploration, production and refining; aviation.
- Second group, (from 2029): mining; recycled aluminum; power; glass; food and beverages; chemicals; ceramics; waste.
- Third group (from 2031): road, waterway, and rail transport.
Each phase would span four years: the first year for developing the monitoring plan; the second and third for active emissions monitoring; and the fourth for developing the National Allocation Plan. During each four-year period, obligations for relevant regulated entities would be limited to MRV, with surrender obligations applying from the fifth year onward.
This proposal draws on comparative analyses, international benchmarks, and an assessment of Brazil's productive structure, considering energy and emissions intensity, market structure, companies' adaptive capacity, feasibility of MRV, exposure to international trade, macroeconomic impacts, regulatory framework, and the managing authority’s operational capacity.
A public consultation on the sectoral coverage proposal is expected in July, with the final version to be published before year-end. The SEMC has set a target of completing all secondary regulations under Law 15,042/2024 by end-2026.
Governance
Also in May 2026, the SBCE's Permanent Technical Advisory Committee (Comitê Técnico Consultivo Permanente, CTCP) published four resolutions formalizing its internal rules and establishing three thematic Working Groups:
- Internal Rules of the CTCP/SBCE (Resolution nº 1/2026): approves the Internal Rules of the CTCP, establishing its structure, composition, mandate, and deliberative procedures. The resolution also governs the functioning of the thematic Working Groups that will support the Committee in carrying out its responsibilities.
- Working Group on Financial Aspects (Resolution nº 2/2026): covers (i) financial instruments; (ii) registration, trading, and settlement of carbon assets; (iii) market participation and oversight; and (iv) infrastructure and systems interoperability, among other topics. The group is coordinated by SEMC's Sub-Secretariat for Implementation.
- Working Group on MRV (Resolution nº 3/2026): establishes the tasked with discussing (i) requirements for emissions MRV, and accreditation of third party verifiers; (ii) integration of the MRV system with inventories and existing databases; and (iii) transparency and traceability mechanisms, among other topics. The group is also coordinated by the Sub-Secretariat for Implementation.
- Working Group on Methodologies (Resolution nº 4/2026): addresses accreditation and de-creditation of methodologies for the generation of Verified Emission Reduction or Removal Certificates (CRVEs), responsible for discussing (i) approval of methodologies; (ii) baseline, additionality, and permanence criteria; and (iii) methodological compatibility with the MRV system, as well as matters related to the integrity, robustness, and reliability of carbon assets. The group is coordinated by SEMC's Sub-Secretariat for Regulation and Methodologies.
- Working Group on Carbon Credits on Federal Public Lands (Interministerial Ordinance nº 69/2026): develops guidelines and conditions for the voluntary offering of carbon credits on federal public lands, preparing an action plan covering regulatory, methodological, and operational measures, carbon credit ownership, land tenure, and protection of Indigenous Peoples, traditional communities, and family farmers. Coordinated by the Ministries of Finance and of the Environment and Climate Change, with participation from other federal agencies.
The CTCP's internal rules and working groups mark a key step in operationalizing the SBCE's governance framework and completing secondary regulations by end-2026. Attention now turns to the remaining governance bodies under Law 15.042/2024, notably CAREG, a chamber within the CTCP composed of entities representing regulated sectors.
Other institutions are also advancing: CONAREDD+ (overseeing Brazil's REDD+ governance framework); the National Designated Authority (responsible for authorizing international transfers of mitigation outcomes (ITMOs) under Article 6 of the Paris Agreement); and the Comissão de Valores Mobiliários (CVM) (regulatory authority over SBCE assets and carbon credits when traded in financial and capital markets). A proposal for the Permanent Managing Body, defining the system's long-term institutional home, is still pending.
Taken together, consolidating these bodies and finalizing sub-legal regulations, will be essential to move Brazil’s transition from rulemaking to practical implementation, with full operationalization targeted for 2031.
