In May 2026, the Brazilian Ministry of Finance released a preliminary proposal to determine which sectors of the Brazilian economy shall be covered by the regulated carbon market.This constitutes a significant milestone in the development of the Brazilian Emissions Trading System (Sistema Brasileiro de Comércio de Emissões — SBCE), established pursuant to Federal Law No. 15,042/2024. Although the proposal is not yet legally binding, it provides increasingly clear guidance as to which enterprises and activities shall become subject to formal obligations to measure, report, and verify their greenhouse gas emissions — commonly referred to as MRV obligations (mensuração, relato e verificação). The initiative was submitted by the Extraordinary Secretariat for the Carbon Market (Secretaria Extraordinária do Mercado de Carbono — SEMC) to the Permanent Technical Advisory Committee of the SBCE.
The sectoral inclusion has been structured in three progressive phases, with the first phase scheduled to commence in 2027 and gradual expansion through 2031, taking into account the adaptation capacity of the various segments of the economy.In the first phase, commencing in 2027, the following sectors have been designated: pulp and paper, iron and steel, cement, primary aluminium, oil and gas exploration and production, refining, and air transport. In the second phase, scheduled for 2029, the following sectors are to be included: mining, recycled aluminium, the electricity sector, glass, food and beverages, chemicals, ceramics, and waste. In the third phase, commencing in 2031, the road, waterway, and rail transport sectors shall be incorporated.
It is essential to emphasise that this proposal, in and of itself, does not yet create definitive legal obligations for economic operators. It represents the pre-regulatory stage of the rulemaking process, which remains contingent upon the advisory committee's review and the public consultation scheduled for 2026. Nevertheless, its practical significance should not be underestimated: it is on the basis of this proposal that enterprises within the designated sectors can — and, from a risk management standpoint, should — begin to prepare.
The legal basis for the designation of sectors covered by the Brazilian carbon market is set forth in Federal Law No. 15,042/2024, which established the SBCE. Article 1, Paragraph 1 thereof provides that the law applies to activities, sources, and installations located within Brazilian territory that emit or may emit greenhouse gases, under the responsibility of operators who are natural persons or legal entities.
A central feature of Federal Law No. 15,042/2024 is that it does not prescribe a closed list of regulated sectors. Instead, the legislature adopted an open-framework regulatory technique, delegating to the Executive Branch the task of defining the substantive scope through technical regulation. The legislator established the essential parameters — greenhouse gas emissions, location within Brazilian territory, and the exclusion of primary agricultural production (Article 1, Paragraphs 1 and 2) — without exhaustively enumerating the covered sectors.
Article 8 of Federal Law No. 15,042/2024 is the central provision within this regulatory framework. It confers upon the governing body of the SBCE the following functions: defining monitoring methodologies; regulating the submission of emissions data; setting the annual thresholds above which the obligations to prepare a monitoring plan and to report emissions and removals arise; and establishing the requirements and procedures for MRV.
Article 22 of the same law reserves exclusively to the Federal Government (União) the authority to establish emission limits for regulated sectors, in accordance with the National Allocation Plan (Plano Nacional de Alocação), prohibiting both dual institutional regulation and any taxation on greenhouse gas emissions arising from activities regulated under the SBCE. This provision is significant for two reasons: first, because it confirms that the Federal Government holds exclusive authority to set emission limits for regulated sectors, thereby reinforcing the centralisation, at the federal level, of the structural decisions governing the Brazilian Emissions Trading System.
For enterprises within the potentially covered sectors, the present juncture demands practical attention and qualified legal counsel. Awaiting the publication of the final regulatory act without any prior preparation may pose a considerable risk to operations and business compliance.