Building Capacity for Brazilian emissions trading system (ETS)

As part of the project "Capacity building for emissions trading systems to support bilateral cooperation" on behalf of the German Federal Ministry for Economic Affairs and Climate Action (BMWK), the consortium lead by adelphi has implemented a series of capacity building activities for the members of the forthcoming Interministerial Working Group on Carbon Markets in Brazil.

Being one of the world's ten largest GHG emitters, Brazil laid the groundwork for an emissions trading system (ETS) in its 2008 National Climate Change Plan, and in recent years the introduction of carbon pricing mechanisms has gained significant momentum. In September 2023, President Lula da Silva's government submitted a bill to Congress to establish the Brazilian Emissions Trading System (SBCE), featuring an emissions cap, auctioning as an allocation method, and limited use of domestic offsets—with the legislation expected to pass in 2024. The project supported the Brazilian government in this process by providing capacity building workshops on ETS for the key involved members of different Ministries, Parliament and President's Office.

The three-day capacity building workshop was organised in collaboration with Ministry of Environment and Climate Change (MMA) and focused on the institutional, legal and administrative foundations for an ETS as well as several practical aspects of implementing such a system. Experts from the consortium partner institutions Öko-Institut, Ecologic, FutureCamp as well as the German Emissions Trading Authority (DEHSt) provided the Brazilian participants with their expertise and answered questions. Following the workshop, four in-depth expert seminars on specific aspects of the design and implementation of the ETS were organized, covering ETS governance, scope and coverage, allocation methods and the use of offsets credits in an ETS.