Decarbonization
With an energy matrix predominantly based on renewable sources and rich in natural resources, Brazil is well-positioned to lead in the production of sustainable fuels, carbon capture and storage (CCS) technologies, and nature-based solutions
Decarbonization
With an energy matrix predominantly based on renewable sources and rich in natural resources, Brazil is well-positioned to lead in the production of sustainable fuels, carbon capture and storage (CCS) technologies, and nature-based solutions
The implementation of a regulated carbon market, alongside the regulation of the Paris Agreement, provides a unique opportunity for the expansion of low-emission sectors. However, substantial challenges remain, such as high implementation costs and international uncertainties related to the CBAM
The implementation of a regulated carbon market, alongside the regulation of the Paris Agreement, provides a unique opportunity for the expansion of low-emission sectors. However, substantial challenges remain, such as high implementation costs and international uncertainties related to the CBAM
Our take on the industry
Decarbonization is at the heart of global policies to address climate change, and Brazil has a key role to play. With its predominantly renewable energy matrix and vast natural resources, the country has the potential to lead both in the production of sustainable fuels and carbon capture and storage (CCS) technologies, as well as in nature-based solutions. Reforestation projects, ecosystem restoration, and sustainable land management offer an effective approach to removing emissions and generating carbon credits, positioning Brazil as one of the main actors in the global carbon market.
The creation of a regulated carbon market, currently under legislative discussion, and the regulation of Article 6 of the Paris Agreement, expand opportunities for the growth of sectors focused on low-emission fuels, low-carbon hydrogen, and natural solutions that contribute to emission mitigation. Hard-to-decarbonize industries, such as steel, cement, and chemicals, are beginning to explore new technologies, such as CCUS, while nature-based solutions complement these initiatives by sustainably sequestering carbon.
However, significant challenges remain. In addition to the need for clear regulation of the carbon market, the Brazilian industry faces high implementation costs for technologies like CCS and uncertainties regarding competitiveness in light of international environmental barriers, such as the CBAM (Carbon Border Adjustment Mechanism). The scaling of nature-based solutions also requires greater structuring of economic incentives and the integration of such projects at a large scale to ensure tangible impacts on emission mitigation.
By combining technological and natural solutions, Brazil has the opportunity to lead the transition to a low-carbon economy while fulfilling its climate commitments. The synergy between public policies, technological innovation, and the sustainable use of its vast natural resources will enable the country to balance economic growth with environmental preservation, strengthening its global position as a reference in decarbonization.
Our take on the industry
Decarbonization is at the heart of global policies to address climate change, and Brazil has a key role to play. With its predominantly renewable energy matrix and vast natural resources, the country has the potential to lead both in the production of sustainable fuels and carbon capture and storage (CCS) technologies, as well as in nature-based solutions. Reforestation projects, ecosystem restoration, and sustainable land management offer an effective approach to removing emissions and generating carbon credits, positioning Brazil as one of the main actors in the global carbon market.
The creation of a regulated carbon market, currently under legislative discussion, and the regulation of Article 6 of the Paris Agreement, expand opportunities for the growth of sectors focused on low-emission fuels, low-carbon hydrogen, and natural solutions that contribute to emission mitigation. Hard-to-decarbonize industries, such as steel, cement, and chemicals, are beginning to explore new technologies, such as CCUS, while nature-based solutions complement these initiatives by sustainably sequestering carbon.
However, significant challenges remain. In addition to the need for clear regulation of the carbon market, the Brazilian industry faces high implementation costs for technologies like CCS and uncertainties regarding competitiveness in light of international environmental barriers, such as the CBAM (Carbon Border Adjustment Mechanism). The scaling of nature-based solutions also requires greater structuring of economic incentives and the integration of such projects at a large scale to ensure tangible impacts on emission mitigation.
By combining technological and natural solutions, Brazil has the opportunity to lead the transition to a low-carbon economy while fulfilling its climate commitments. The synergy between public policies, technological innovation, and the sustainable use of its vast natural resources will enable the country to balance economic growth with environmental preservation, strengthening its global position as a reference in decarbonization.
Opportunities
- Development of the regulated carbon market
- CCUS: Projects in energy-intensive industries
- Brazil as a global hub for hydrogen production
- Integration of nature-based solutions with mitigation technologies, such as BECCS
- New international markets
Challenges
- Lack of predictability regarding the structuring of the carbon market
- Pricing in the industrial sector vs. competitiveness
- Pressure on exporters, with environmental taxes and barriers, such as the CBAM
- Regulatory vacuum, notably CCUS, the regulated market, and hydrogen
- High implementation and decarbonization infrastructure costs
- Scalability of nature-based solutions and their economic impacts
Macrotrends
- Establishment of climate targets focused on GHG emission mitigation through regulated markets
- Growth in demand for voluntary market carbon credits
- Accelerated adoption of carbon capture technologies in hard-to-abate sectors
- Expansion of Brazilian projects on nature-based solutions
- Regenerative practices and bioenergy with carbon capture
Work Highlights
Identifying Opportunities and Challenges in the Brazilian Emissions Trading System
We provide ongoing strategic support to our client to identify business opportunities, regulatory barriers, and carbon market impacts across various sectors, such as low-emission fuel production, hydrogen, and projects aimed at generating carbon credits. Our work is focused on ensuring that the company is well-positioned in light of new regulations and carbon market requirements
Contracts and Agreements, Facilitating the Generation of Carbon Credits
We offer specialized support in drafting and negotiating contracts and memoranda of understanding focused on the generation and commercialization of carbon credits. Our work covers project structuring through to the closing of commercial agreements, ensuring that all legal, regulatory, and commercial aspects are properly aligned to maximize the value of the credits generated
Due Diligence on Carbon Credits, Ensuring Compliance and Certification
We provide specialized support in due diligence for areas intended for carbon credit projects, ensuring compliance with all requirements necessary for credit certification. Our work also includes reviewing draft contracts, ensuring alignment with regulatory and environmental standards. Additionally, we conduct in-depth analysis of the legal requirements embedded in voluntary carbon market methodologies, ensuring these requirements are appropriately reflected in project structures
Training and Literacy
We provide specialized support in training and capacity-building for internal teams of various clients, preparing them to understand and navigate the challenges and opportunities of the carbon market. Trainings are focused on developing competencies that enable strategic alignment with regulations and the maximization of opportunities within an increasingly regulated market
Advocacy in the Sector
We provide legal and strategic support for the structuring and development of sustainable fuel production projects, including the issuance of carbon credits. Our work includes specialized due diligence of the areas to be used, ensuring compliance with requirements for carbon credit certification. We also advise on contract drafts, ensuring alignment with regulatory and environmental standards. Furthermore, we conduct in-depth analyses of legal requirements present in voluntary carbon market methodologies, ensuring these are adequately reflected in project structures, promoting compliance and maximizing opportunities in the carbon credit market
Structuring and Developing Sustainable Fuel and Carbon Credit Projects
We provide specialized support in monitoring, evaluating, and preparing contributions to public consultations involving the development of carbon credit projects, both nationally and internationally, in voluntary market programs and methodologies, or in contributions for the regulation of Article 6 of the Paris Agreement
Carbon Capture and Geological Storage
Our team worked on an innovative carbon capture and geological storage project, focused on biogenic capture sources, addressing the technical and regulatory challenges of this type of operation. We provide full support in constructing the project’s risk matrix, covering technical, regulatory, and financial uncertainties, as well as developing risk mitigation strategies. We also advise on drafting and negotiating various legal instruments required to enable the project, including investment agreements among different stakeholders and the development of Brazil’s first Joint Operating Agreement (JOA) for CO₂ injection into geological reservoirs
Work Highlights
Identifying Opportunities and Challenges in the Brazilian Emissions Trading System
We provide ongoing strategic support to our client to identify business opportunities, regulatory barriers, and carbon market impacts across various sectors, such as low-emission fuel production, hydrogen, and projects aimed at generating carbon credits. Our work is focused on ensuring that the company is well-positioned in light of new regulations and carbon market requirements
Contracts and Agreements, Facilitating the Generation of Carbon Credits
We offer specialized support in drafting and negotiating contracts and memoranda of understanding focused on the generation and commercialization of carbon credits. Our work covers project structuring through to the closing of commercial agreements, ensuring that all legal, regulatory, and commercial aspects are properly aligned to maximize the value of the credits generated
Due Diligence on Carbon Credits, Ensuring Compliance and Certification
We provide specialized support in due diligence for areas intended for carbon credit projects, ensuring compliance with all requirements necessary for credit certification. Our work also includes reviewing draft contracts, ensuring alignment with regulatory and environmental standards. Additionally, we conduct in-depth analysis of the legal requirements embedded in voluntary carbon market methodologies, ensuring these requirements are appropriately reflected in project structures
Training and Literacy
We provide specialized support in training and capacity-building for internal teams of various clients, preparing them to understand and navigate the challenges and opportunities of the carbon market. Trainings are focused on developing competencies that enable strategic alignment with regulations and the maximization of opportunities within an increasingly regulated market
Advocacy in the Sector
We provide legal and strategic support for the structuring and development of sustainable fuel production projects, including the issuance of carbon credits. Our work includes specialized due diligence of the areas to be used, ensuring compliance with requirements for carbon credit certification. We also advise on contract drafts, ensuring alignment with regulatory and environmental standards. Furthermore, we conduct in-depth analyses of legal requirements present in voluntary carbon market methodologies, ensuring these are adequately reflected in project structures, promoting compliance and maximizing opportunities in the carbon credit market
Structuring and Developing Sustainable Fuel and Carbon Credit Projects
We provide specialized support in monitoring, evaluating, and preparing contributions to public consultations involving the development of carbon credit projects, both nationally and internationally, in voluntary market programs and methodologies, or in contributions for the regulation of Article 6 of the Paris Agreement
Carbon Capture and Geological Storage
Our team worked on an innovative carbon capture and geological storage project, focused on biogenic capture sources, addressing the technical and regulatory challenges of this type of operation. We provide full support in constructing the project’s risk matrix, covering technical, regulatory, and financial uncertainties, as well as developing risk mitigation strategies. We also advise on drafting and negotiating various legal instruments required to enable the project, including investment agreements among different stakeholders and the development of Brazil’s first Joint Operating Agreement (JOA) for CO₂ injection into geological reservoirs