Brazil decarbonization and carbon regulation

The Brazilian government has issued several decrees to advance its national decarbonization agenda, focusing on carbon capture, sustainable aviation fuel, and emissions trading.

Under the Future Fuel Law, President Luiz Inácio Lula da Silva signed a decree regulating carbon capture, use, and storage (CCUS). The regulation mandates that companies monitor stored CO2 for at least 20 years to ensure gas stability and mitigate leak risks. Industry experts, including Isabela Morbach of CCS Brasil, have criticized the decree for requiring operators to maintain permanent responsibility for risks and environmental reparations. This model of indefinite corporate liability differs from international practices in Canada and Norway, where long-term liability can be transferred to the state.

To address aviation emissions, the government established the National Sustainable Aviation Fuel Program (ProBioQAV) via Decree No. 13.094/2026. Domestic airlines must reduce greenhouse gas emissions by at least 1% starting in 2027, reaching 10% by 2037. The program utilizes the Sustainable Aviation Fuel Sustainability Certificate (CS-SAF), a ‘book and claim’ model allowing environmental benefits to be traded separately from physical fuel. The ANP will handle sustainability certification, while Anac will oversee monitoring and compliance.

Additionally, Brazil has concluded the first regulatory cycle for the Brazilian Emissions Trading System (SBCE) following public consultations. A proposed framework outlines a three-stage integration of 17 economic sectors into monitoring, reporting, and verification (MRV) obligations between 2027 and 2031. While initial inclusion in the MRV process does not mandate immediate compliance with emission limits, a Central Registry for the SBCE is currently being developed by Serpro and the Ministry of Finance.