The Senate Committee on Economic Affairs (CAE) approved on Tuesday, January 29, a bill regulating the Brazilian Market for the Reduction of Emissions (MBRE) of greenhouse gases. The text will now be reviewed by the House Environment Committee (CMA) and, if approved, will immediately go to the House of Deputies for discussion.

This market, mandated by a 2009 law, is one of the instruments of the National Climate Change Policy. By law, MBRE will operate on commodity and futures exchanges, stock exchanges and organized OTC entities authorized by the Securities and Exchange Commission (CVM) where securities representing greenhouse gas emissions will be traded. .

In May of this year, the Bolsonaro government issued a decree to regulate the carbon market. However, there is an opinion that a law is needed to justify and provide more detailed information about this tool.

In his view, text rapporteur Tasso Gereissati (PSDB-CE) said the proposal’s merit was “undeniable” given projected climate change scenarios that include reduced rainfall in major agricultural producing regions in the Centre. -South and increase in natural disasters such as floods and droughts. “It is important to take measures that encourage lower-carbon activities and projects,” he said.

The approved text was prepared by the rapporteur from four drafts submitted by senators on the subject. According to him, the new proposal provides for a broader organization of the carbon credits market with greenhouse gas (GHG) emissions management as its main axis. To this end, the establishment of the Brazilian GHG Emission Management System (SBGE-GEE) has been proposed, under which a national plan for the allocation of GHG rights (DEGEE) will be developed.

The plan will establish percentages of financial assets based on verified reductions and takeovers (RVEs) that can be used in connection with emission rights to prove achievement of the targets envisaged for each sector and for their companies.

Some definitions will be left up to the executive to regulate, such as progressively “harder” emission reduction targets to be required of sectors subject to an emission reduction obligation and the proportion of effort each sector is making to meet a country’s international obligations. . That is, the federal government will need to determine which sectors are subject to the rules and must comply with the emission limit.

The management of the SBGE-GEE will be under the jurisdiction of a federal agency that will determine the organization and operation of the system, including through regulation. The text defines that the accreditation and non-recognition of methodologies for measuring emissions and capturing, removing or reducing greenhouse gas emissions will be one of the core competencies of the SBGE-GEE.

The rapporteur partially accepted an amendment by Senator Roberto Rocha (PTB-MA) to provide for deliberative bodies within the federal body responsible for managing the SBGE-GEE and for independent reviews of greenhouse gas emissions declarations. It also adopted an amendment clarifying that agricultural and forestry activities are not part of the regulated market.

In terms of taxation, the text establishes an income tax rate of 15% on profits, leaving the source of the payment responsible for its retention and collection through intermediation.