Carbon credits – Federal Government creates sectorial plan focused on agribusiness and the Carbon Market in Brazil

Recently, the Ministry of Agriculture, Livestock and Food Supply (MAPA) published Ordinance No. 471 to establish the Sectoral Plan for Climate Change Adaptation and Low Carbon Emission in Agriculture and Livestock (“Plano ABC+”) for the period from 2020 to 2030. Plano ABC+ took effect on September 1.

Among the targets outlined by Plano ABC+ to be reached by 2030 is to expand:

• by 30 million hectares, areas intended for the recovery of degraded pastures;
• by 12.58 million hectares, areas allocated for the adoption of no-till farming systems; and
• by 10.10 million hectares, areas for the adoption of integration systems.

The Ordinance also provides for the expansion, by up to 4 million hectares, of the areas adopting Planted Forests, as well as the expansion by 13 million hectares of the areas adopting Bio-Inputs.

In addition, it aims to expand by 3 million hectares the areas intended for Irrigated Systems, as well as expansion by approximately 200 million cubic meters the adoption of Animal Production Waste Management and an increase of 5 million cattle in intensive finishing.

According to the Ordinance, the mitigation potential of the proposed actions will allow for a reduction of greenhouse gas (“GHG”) emissions, estimated by the national agricultural sector at 1,042.41 million Mg CO₂eq by the year 2030.

By stimulating such sustainable procedures, Plano ABC+ intends to decrease the vulnerability and increase the resilience of agricultural production systems to climate change, to promote the conservation of natural resources, and to increase biodiversity and climatic stability of production systems.

The need for sectoral plans for climate change adaptation was already established in the National Policy on Climate Change (Federal Law No. 12,187/2009), and the procedures were defined by the recent Decree No. 11,075/2022.

The Sectoral Plans are defined as sectoral government planning instruments for the fulfillment of climate targets, aiming for the consolidation of a low-carbon economy and compliance with the voluntary commitment undertaken by Brazil under the Paris Agreement.

The Sectoral Plans will operate through the presentation of gradual targets for the reduction of anthropogenic emissions and removals by GHG sinks, through measurable and verifiable means. The monitoring of the targets will occur through the presentation of GHG inventories by the sectoral agents.

Among the various sectors listed for the drafting of Sectoral Plans, the agricultural and steel sectors were highlighted through the publication of Decree No. 9,578/2018. Under this premise, the Plano ABC+ was established.

It was established that the competence for proposing a Sectoral Plan lies with the Ministry of the Environment, the Ministry of Economy, and the related sectoral ministries, if any. However, it is observed that the ministries can be called upon by the sector itself via the presentation of proposals for the establishment of GHG reduction curves. These proposals can be submitted until November 15, 2022, extendable by 180 days.

Demarest’s ESG and Environmental teams are available to provide further information or clarification on Plano ABC+, as well as other requirements related to carbon credits and sustainable business development.