The implementation of the Brazilian Emissions Trading System (SBCE) has the potential to transform climate policy into an economic asset, but its effectiveness will depend on the quality of its regulatory governance.
The Brazilian Emissions Trading System (SBCE) is the framework created by Brazil to regulate and reduce greenhouse gas emissions, particularly from companies and sectors with high carbon emissions.
With the establishment of the System, the country has taken a significant step towards structuring a regulated carbon market. In practice, the government sets emission limits for specific sectors of the economy, allowing companies that emit below their allocated thresholds to trade credits with those that exceed the prescribed limits.
Law No. 15,042/2024 established the legal foundations of the System. However, its effectiveness will depend on secondary regulation, particularly in relation to governance, allocation criteria, measurement methodologies, certification of emission reductions and removals, environmental integrity and market operation.
In March 2026, the Ministry of Finance established the Permanent Technical Advisory Committee (STCP) of the SBCE, formally launching efforts to support the regulation of the regulated carbon market. According to the Ministry itself, the committee will focus on technical integrity, legal certainty and attracting investment for the country's ecological transformation.
The STCP has important responsibilities in designing the System, including providing guidance on accreditation criteria for methodologies used to generate Verified Emissions Reduction or Removal Certificates, developing proposals for the National Allocation Plan and overseeing the allocation of resources generated by the SBCE.
MJAB Insights: The regulated carbon market is likely to become one of Brazil’s leading economic transition agendas in the coming years. However, the true value of the System will not be determined solely by the existence of legislation, but by the credibility of its regulation. Carbon markets rely on trust: trust in emissions measurement, the integrity of credits, the governance of methodologies, the predictability of obligations and the State’s ability to prevent competitive distortions.
The main challenge will be balancing climate ambition with economic viability. If the model is excessively flexible, it may lose environmental credibility and generate low-value assets. If it is excessively rigid, it may impose abrupt costs on productive sectors without providing adequate time for technological adaptation. The development of the National Allocation Plan will therefore be one of the most sensitive stages of implementation, as it will determine the initial distribution of burdens and incentives among sectors, companies and supply chains.
Scenario analysis suggests that 2026 will be a year of intense technical and institutional debate surrounding regulation. Regulated sectors will seek to influence classification criteria, targets, implementation schedules, methodologies and compensation mechanisms. At the same time, investors and financial market participants will assess whether Brazil can establish a market characterised by liquidity, traceability and legal certainty. For businesses, the climate agenda is no longer merely a matter of reputation; it is becoming a direct factor in regulatory costs, access to capital, international competitiveness and long-term strategy.