In 2020, the global carbon credit economy generated €229 billion, 20% more than the previous year. This global result reflects the importance of the approval in Brazil of Bill 528/2021, which deals with the regulation of the mandatory Brazilian carbon credit market. PL 528 / 2021 is authored by deputy Marcelo Ramos (PL-AM) and is currently in the Environment and Sustainable Development Committee of the Chamber of Deputies.
Recently, the president of the Chamber, deputy Arthur Lira (PP-AL), guaranteed that he will speed up the processing of the matter and stated that he will strive for its approval to occur before COP 26 (26th United Nations Conference on Climate Change), in November.
For Ana Maria Carvalho, a lawyer specializing in tax law, the approval of the PL will encourage the voluntary carbon credit market in Brazil, in addition to creating a mandatory (or regulated) market through the SBCE (Brazilian Emissions Trading System).
“This attempt at regulation is very interesting and, without a doubt, comes at a good time. The idea is, on the one hand, to stimulate the voluntary carbon market through the creation of a National Registry System that offers greater credibility and legal security to this context and, on the other hand, to bring guidelines for the regulation of a mandatory market through through SBCE”, highlighted Ana Maria.
“Under the terms of the PL, the Executive Branch is obliged to regulate this mandatory market within two years of the publication of the law, which could elevate Brazil to a favorable position in the international agenda for reducing carbon emissions”, he added.
The lawyer also reinforced the importance of approving the bill, as there is a possibility of positive integration between the carbon credits market and the decarbonization policy established by Renovabio.
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Also according to the expert, the policy aims to increase the participation of biofuels in the national energy matrix through the issuance of CBIOs (decarbonization credits) by producers and importers of biofuels certified by the ANP (National Agency for Petroleum, Natural Gas and Biofuels), in an amount proportional to the volume of biofuels sold by them.
“This classification is a gap in the legislation, but it is essential to identify the legitimately applicable taxation. What I want to say is that the framework of the regulated carbon credits market that we want to approve cannot make the same mistake, that is, bringing in lacunose guidelines that hinder the effectiveness of this policy”, he states.
Ana Maria also highlighted that regarding CBIOs there is a block to the expansion of this instrument, given the lack of legal security in the tax context related to it, since players in this market are not even able to ensure themselves regarding the tax burden legitimately applicable to issuance/trading operations.
The request for the issuance of the CBIO is authorized for producers and importers of biofuels, duly certified by the ANP, based on their purchase and sales invoices. Distributors of fossil fuels, when required to meet mandatory annual decarbonization targets calculated by the Agency, need to purchase them to achieve these targets, which are part of the commitments assumed by Brazil at COP 21 (United Nations Framework Convention on Climate Change, 2015).
Carbon credit market
The difference between voluntary and mandatory markets is precisely the existence or not of a mandatory standard. In the mandatory market, there is a regulation that obliges agents in certain sectors to limit their carbon emissions and to compensate them when established limits are exceeded.
As examples of this mandatory or regulated market, we can mention the California Cap and Trade) and the EU ETS (European Union Emissions Trading Scheme), the latter of which has generated billions of Euros in recent years.
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Hello! I would like a meeting to talk about COP 25 and PL 528/21.
Hello André, please contact me via email. redacao@canalsolar.com.br
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