Agro will not enter the carbon market anytime soon – 12/22/2023 – Market

The bill that regulates the carbon market in Brazil was approved this Thursday (21) in the Chamber of Deputies, excluding agriculture from the emissions target system.

With 299 allied deputies, it was easy for the sector to maintain the text approved by the Senate in October, which removed all primary agricultural activity from the scope of the model, even though it is the main responsible for greenhouse gas (GHG) emissions in Brazil.

During the vote in the plenary, PSOL even presented a statement suggesting the return of agriculture to the market, but the proposal was rejected.

Thus, after approval of the text in Congress, rural landowners will be immune to the GHG emissions ceilings stipulated by the market management body. The same will not happen, for example, with industry.

On the other hand, the agribusiness will be able to sell carbon credits on the voluntary market. In other words, rural landowners will not need to meet targets, but those who can demonstrate emission reductions will be able to collect revenue through the sale of credits.

“We want to participate in the carbon market as long as we have these clear rules on how this will happen. We are producing food, energy and climate solutions. If you create an emissions cap on these actions, you are going against this very narrative that it is necessary to reduce emissions and change the energy matrix”, he tells Sheet Nelson Ananias, sustainability coordinator at CNA and the sector’s main spokesperson on the topic.

Doesn’t agriculture outside the carbon market give a negative impression to society?
We understand that it is not. We want the removal of agriculture from the regulated market and emissions caps, within the National Regulation Plan, because we understand that the methodology for measuring agriculture is not yet mature enough for the sector to enter this accounting. But we continue to support the achievement of NDC goals [Contribuição Nacionalmente Determinada, sigla em inglês adotada no Acordo de Paris para designar as metas nacionais de clima] through the recovery of active matter. Agriculture continues to be able to contribute to the reduction of emissions as an honest carbon credit provider.

We want to participate in the carbon market as long as we have clear rules on how this will happen. We are producing food, energy and climate solutions. If you create an emissions cap on these actions, you are going against this very narrative that it is necessary to reduce emissions and change the energy matrix.

So does agriculture want to enter selling credit in the voluntary market and not be one of the sectors that will need to meet targets in the regulated market?
Yes. We can enter the regulated market by providing offsets to comply with other sectors of the economy in this regulated market, especially because agriculture already does this. When rural producers do direct planting or ILPF (crop-livestock-forest integration), they are already generating carbon credits.

The project’s rapporteur in the Chamber, deputy Aliel Machado (PV-PR), even offered the sector the possibility of entering the market without being subject to fines for a few years. Why didn’t even this proposal please the agricultural sector?
His proposal was that the agribusiness would enter the market three years after the implementation plan came into force, as long as these methodologies were already defined. But we understood that this proposal did not create the necessary security or encourage what agriculture can propose as a regulated entity. [Esse modelo] It doesn’t make it clear when this will happen, it doesn’t make it clear what the monitoring system will be and what the methodology will be applied, especially because there is no such methodology. There is no place in the world where this is being widely implemented, especially by an agricultural sector the size of Brazil.

How do we apply a single rule to several different properties and types of producers? In the energy and transport sector, for example, you can have a measurement standard, but in agriculture, you cannot. If, suddenly, a methodology for a type of production appears, this can be extrapolated and harm, especially small and medium-sized producers.

But is there any estimate of when these methodologies will be ready and when the agricultural sector will be interested in entering the regulated market?
We understand that there is no horizon. There is nothing today that really says that we can be regulated in six years from now, for example. We don’t see a horizon in this space of time.

Are rural producers dissatisfied with the creation of jurisdictional carbon markets?
We understand that the text is general and very confusing. He says that the producer can request the withdrawal of his part from the jurisdictional market, but this still needs to be regulated. We still need to study the impacts and regulations to say whether these jurisdictional markets really benefit rural producers or not.