Brazil unveils phased plan for national carbon market implementation

Brazil has released a preliminary proposal outlining the phased sectoral coverage of the country’s regulated carbon market, specifying which industries will be required to report GHG emissions under the new framework (Brazil’s Ministry of Finance press release, 19/05/2026).

The proposal forms part of the development of Brazil’s emerging emissions trading system and introduces monitoring, reporting and verification (MRV) obligations structured across three implementation phases starting in 2027, according to the ministry.

• The first phase, beginning in 2027, would cover pulp and paper, iron and steel, cement, primary aluminium, oil and gas exploration and production, refining, and air transport. During this initial stage, companies would only be required to report emissions, with no associated costs, charges, or mandatory reduction targets.
• A second phase, scheduled for 2029, would expand coverage to additional sectors such as mining, recycled aluminium, the electricity sector, glass, food and beverages, chemicals, ceramics, and waste management. 
• A third phase, set for 2031, would extend the system to transport sectors, including road, water, and rail.

Each sector would be granted a four-year preparation period. The first year would focus on developing monitoring plans, followed by two years of emissions monitoring, and a fourth year dedicated to national allocation planning. The first National Allocation Plan will distribute quotas free of charge to operators who will be part of the market.

A public consultation on the proposal is planned for July 2026, with a final version expected later in 2026. The gradual rollout is intended to support the establishment of a structured carbon market while allowing industries time to adapt to reporting and compliance requirements.