Law on carbon credits in forest concessions sanctioned

On May 24, the Presidency of Brazil sanctioned a law that authorizes the trading of carbon credits involving forest concessions.

It is the previous Provisional Measure 1,151/2022, that has been converted into Law No. 14,590/2023 and that modifies Law No. 11,284/2023, to promote the carbon market by means of rules on the management and concession of public forests.

The new law updates the concept of forest concession, which is the onerous delegation of the right to carry out forest management and restoration activities, as well as the exploitation of products and services in management units, after a bidding process.

This law also enables the inclusion of a provision for the transfer of ownership of carbon credits in the concession contract, even transferring the right to trade certificates representing carbon credits and associated environmental services.

Forest concessions for sustainable management and stewardship are carried out through a specific-term bidding process. During the term of the concession contract, the concessionaire can trade the products resulting from such management and restoration activities, and the exploitation of products and services, including carbon credits and non-timber forest services.

For more information, access our ESG Newsletter | Forest management and concession rules amended to support carbon credit market

Demarest’s Environmental, ESG and Infrastructure teams are available to provide further information and clarify any questions that may be necessary.