Brazil establishes interim carbon market secretariat to advance implementation of the national ETS
On 16 October 2025, President Luiz Inácio Lula da Silva signed Decree 12,677, creating the Extraordinary Secretariat for the Carbon Market within the Ministry of Finance. The Secretariat is tasked with developing the regulatory and institutional framework for the Sistema Brasileiro de Comércio de Emissões de Gases de Efeito Estufa (SBCE), Brazil’s forthcoming emissions trading system.
Published in December 2024, the Carbon Market Law (Law No. 14.042/2024) establishes the SBCE as Brazil’s national ETS. It will cover entities emitting more than 25,000 tCO₂e per year, with reporting obligations beginning at 10,000 tCO₂e. The system is expected to become fully operational within five to six years of the law’s adoption, following a phased implementation that includes regulatory development, emissions monitoring, and the first National Allocation Plan. The Law also provides for a Management Body to regulate and operate the SBCE. The newly established Secretariat will temporarily assume selected powers set out for the Management Body to advance regulatory development and technical preparation.
The Secretariat’s mandate includes developing regulations, including monitoring, reporting, and verification (MRV) rules, creating and managing the Central Registry, and coordinating technical cooperation programs and international linkages with other ETSs. It will also organize public consultations to support the regulatory design process.
The decree grants the Secretariat further authority to conduct decarbonisation and economic-impact studies, represent the Ministry in national and international climate forums, and regulate conformity assessment and accreditation processes. Its structure includes two sub-secretariats: one for Regulation and Methodologies, responsible for analytical and regulatory work; and another for Implementation, tasked with MRV oversight, registry management, and system interoperability.
While the Secretariat is empowered to prepare the regulations necessary for SBCE operation, functions related to allocation plan development, allowance allocation to covered entities, and establishing the compliance cycle and enforcement will be assumed by the permanent Management Body once it is formally established under the law.
A second Decree, No. 12,678, issued the same day, established a Department of Market Instruments and REDD+ within the Ministry of Environment and Climate Change. The department is responsible for developing guidelines on carbon pricing instruments and their linkages to Brazil’s National Policy on Climate Change (PNMC); providing technical and policy advice for international negotiations on carbon markets; and offering technical support to the SBCE executive bodies regarding the environmental integrity of forestry-based carbon credit projects and programs that could be eventually recognised under the SBCE. The new department will also support Brazil’s Designated National Authority (DNA) for Article 6 of the Paris Agreement.
