Ministry of the Environment and Climate Change publishes ordinance with criteria and complementary conditions for classifying projects developed in conservation units

On January 24, 2025, the Ministry of the Environment and Climate Change (“MMA”) published MMA Normative Ordinance No. 1,298, which establishes the criteria and complementary conditions for classifying, approving (where applicable) and monitoring projects developed in conservation units.

The MMA, in collaboration with the Protected Areas Department (“DAP”), will be responsible for approving (where applicable) the issuance of securities provided for in Article 2 of Law No. 12,431, of June 24, 2011, and Law No. 14,801, of January 09, 2024, and for monitoring the development of these projects.

MMA Normative Ordinance No. 1,298 aims to facilitate the issuance of incentivized debentures and infrastructure debentures, encouraging the development of sustainable infrastructure projects and environmental regeneration in federal, state and municipal protected areas. Among other requirements, the following projects can benefit from these financing mechanisms:

• in areas of visitation and public use; forest management; preservation of the diversity of natural ecosystems; or recovery of native vegetation;
• involving the implementation, expansion, recovery, adaptation or modernization of infrastructure;
• which are owned by a legal entity incorporated as a corporation, characterized as a Special Purpose Entity (“SPV”). The SPV must be a concessionaire or permit holder of public services associated with some category of sustainable forest management or a company authorized by the National System of Conservation Units (“SNUC”) to set up a Private Natural Heritage Reserve (“RPPN”).

Key highlights of Normative Ordinance No. 1,298

MMA Normative Ordinance No. 1,298 innovates by being the first to establish procedures for classifying priority projects in the forest management sector and conservation units. In addition, MMA Normative Ordinance No. 1,298 has cleared the way for investments in private reserves to benefit, which in turn provides funding not only for concession and permit projects but also for projects in the area of sustainable tourism.

Exemption from prior ministerial approval of projects

In line with Decree No. 11,964, the classification of investment projects in conservation units does not require prior ministerial approval and is carried out upon the submission of the documents listed in the “Stages for classifying the project” table below.

Monitoring and inspecting projects

• To monitor project implementation, the issuer must submit statements to the MMA every year within 30 calendar days of the documentation being filed attesting to the project’s regular implementation.
• Once the financed project has been implemented, the issuer must inform the MMA of any changes that may occur to the purpose, value, investment period or timetable of the project, requesting that the project be amended.

Impact and expectations of MMA Normative Ordinance No. 1,298

MMA Normative Ordinance No. 1,298 represents a significant step forward in encouraging the recovery of native vegetation, especially in degraded areas and in the Buffer Zones of conservation units. The measure, which had been awaited since Decree No. 11,964 was published in March 2024, assigned sector ministries the responsibility of defining additional conditions for priority projects.

The new regulations provide for greater efficiency and transparency in the financing processes for infrastructure projects, strengthening the development and quality of conservation units in Brazil.

• Law No. 14,801/2024 establishes a new category of infrastructure debentures
• Decree No. 11,964 regulates the classification of investment projects as priorities
• Ministry of Transport – incentivized debentures and infrastructure in the road and rail sector
• Ministry of Ports and Airports – incentivized debentures and infrastructure in the logistics and transport sector
• Brazilian Federal Revenue Service Normative Instruction No. 2235/2024 – details the tax benefits of issuing incentivized and infrastructure debentures
• Ministry of Mines and Energy – incentivized debentures and infrastructure in the natural gas and biofuels sector
• Ministry of Mines and Energy opens public consultation for ordinance that will regulate the classification of projects as priorities in the strategic minerals sector for energy transition
• Ministry of Integration and Regional Development publishes new ordinance establishing criteria and complementary conditions for classifying priority investment projects in the irrigation sector

Access Normative Ordinance No. 1,298 here.

Demarest’s Public and Regulatory Law, Investment Funds and Asset Management, Environmental, Infrastructure and Project Financing and Capital Markets teams continue to monitor updates relating to the priority sectors and remain available to provide any further clarification that may be necessary.