Brazil regulates carbon capture with 20-year monitoring mandate

President Luiz Inácio Lula da Silva has signed a decree regulating carbon capture, use, and storage (CCUS) activities in Brazil, as established by the Future Fuel Law. The new regulation requires companies to monitor stored CO2 for a minimum of 20 years before operations can be officially closed. This monitoring period is intended to ensure the stability of the injected gas and mitigate the risk of leaks from geological formations.

However, the decree has drawn criticism from industry experts. Isabela Morbach, co-founder of CCS Brasil, noted that the legislation deviates from international trends seen in countries like Canada and Norway. Specifically, the decree mandates that operators or their successors maintain permanent responsibility for risks, damages, and environmental reparations associated with the reservoirs, even after monitoring obligations end. Unlike other jurisdictions where long-term liability can be transferred to the state after meeting specific criteria, the Brazilian model maintains indefinite corporate liability, which experts suggest could increase the economic risk of such projects.