The bill that creates the Brazilian Market for Emission Reduction (MBRE) was scheduled to be voted on urgently last Monday (8) by the Chamber of Deputies, but left the agenda after a request from the Ministry of Environment Environment, in the midst of COP26, UN climate change conference.
Author of the project and vice president of the Chamber, Federal Deputy Marcelo Ramos (PL-AM) was counting on announcing the approval of the carbon market at COP26, but his speeches in the Brazilian pavilion at the conference appealed to the PL 528 /2021 was taken to the plenary.
The decision was communicated to government interlocutors after a meeting of Environment Minister Joaquim Leite, with the National Confederation of Industry (CNI), supporter of the project, and federal deputy Carla Zambelli (PSL-SP), rapporteur of the matter, last Tuesday (9) in a room in the Brazilian pavilion at COP26.
According to meeting participants, who described the meeting as a fight, the minister announced the decision to postpone the vote on the project until a time after the regulation of a global carbon market, being negotiated at the climate conference as part of article 6 of the Agreement on Paris.​
The creation of a national carbon market allows businesses that need to reduce their greenhouse gas emissions to purchase carbon credits, which work as authorizations to emit the gases. They are sold by projects that capture the gas through actions such as planting, reforestation, renewable energies and lower emission technologies.
In early October, the minister had already signaled his opposition to the bill’s vote in a speech to the press about COP26.
“I had a meeting with President Lira to talk a little about the challenge of creating a regulated carbon market in Brazil. It is a challenge to create legislation and that is why our meeting was held, to bring something that it is possible to link to the international market “, said the minister.
In line with Leite’s proposal, the president of the Environment Commission and rapporteur of PL 528/2021, Carla Zambelli (PSL-SP), sent a version of the text to the plenary of the Chamber with several changes – which displeased the businessmen who defended the national carbon market.
Among them is the postponement of the entry into force of the market, which should await the international definition of the subject in the regulation of article 6 of the Paris Agreement.
“The proposal to subordinate the regulation of the Brazilian emission reduction market to the ratification by Congress of Article 6 violates national sovereignty”, assesses Gustavo Pinheiro, coordinator of the Low Carbon Economy Portfolio at the Instituto Clima e Sociedade.
“Brazil is sovereign to establish and regulate the functioning of its domestic market. Article 6.4 of the Paris Agreement establishes market instruments between countries, it does not establish internal regulation in the countries”, says Pinheiro.
The Environment Minister’s action caused surprise among private sector allies, as he signaled proximity to the demands of industry and agriculture, which sponsor the Brazil pavilion at COP26 and support the creation of the carbon market.
The steel sector is one of those pressing the industry for the creation of a national carbon market, bearing in mind the prospect of being taxed at the border by Europe from 2023. The US and China are also already studying how to create their border taxes on carbon .
In agribusiness, gains are expected through the sale of credits generated in the biofuels sector, in which combustion is mostly offset by the planting of sugarcane and soy, which are the bases for producing ethanol and biodiesel.
The creation of a Brazilian market to regulate the trade of carbon credits is also defended by Cebds, the Brazilian Business Council for Sustainable Development, which brings together large Brazilian and multinational companies, accounting together for 45% of GDP.
Asked by sheet, Minister Joaquim Leite replied that he does not follow the matter.
The journalist traveled at the invitation of Instituto Clima e Sociedade.
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