MMA Opens Public Consultation on Regulation of the National Policy on Payment for Environmental Services

Brazil’s Ministry of the Environment and Climate Change (MMA) has launched a public consultation on the draft decree intended to regulate Law No. 14,119/2021, which established the National Policy on Payment for Environmental Services (PNPSA).

Key highlights of the draft decree include:

• Managing Authority: The Ministry of the Environment (MMA) is designated as the managing authority of the PNPSA, and will be responsible for: (i) regulating the various modalities of Payment for Environmental Services (PES); (ii) establishing new PES modalities; and (iii) overseeing the National PES Registry and the Federal PES Program.
• Federal PES Program (PFPSA): The PFPSA will give priority to “family farmers and family-based rural entrepreneurs, Indigenous peoples, and traditional peoples and communities,” and must comply with socio-environmental safeguards aimed at protecting traditionally occupied territories.
• Managing Committee (CGPSA): The draft decree sets forth the structure and responsibilities of the CGPSA, a collegiate body with both consultative and deliberative functions. The committee will be tasked with addressing key issues such as valuation methodologies, certification, monitoring, and the implementation of socio-environmental safeguards.
• National Registry (CNPSA) and National Knowledge Network (REDE-PSA): Operational guidelines for the CNPSA are proposed, including provisions for its integration with other systems. The decree also proposes the creation of the REDE-PSA, a national network dedicated to knowledge dissemination and training related to PES.
• Tax Incentives: Payments received under environmental service contracts registered with the CNPSA will be exempt from federal taxes, including Income Tax (IR), Social Contribution on Net Profit (CSLL), and PIS/Pasep and Cofins contributions.

Public comments may be submitted until July 20.

The Environmental, Climate Change and ESG Practice of Tauil & Chequer Advogados, in association with Mayer Brown, is available for additional information on this topic.