Progress in the Implementation of the Brazilian Emissions Trading System: CTCP Resolutions and Sectoral Coverage Proposal

On May 12, 2026, the Permanent Technical Advisory Committee (CTCP)—a body within the governance structure of the Brazilian Emissions Trading System (SBCE)—published a package of resolutions aimed at regulating its internal functioning and establishing the first Working Groups responsible for providing technical support for the implementation of the system.

The CTCP is tasked with providing technical input and recommendations to the Extraordinary Secretariat for the Carbon Market (SEMC)—the current managing body of the SBCE—and to the Interministerial Committee on Climate Change (CIM), thereby contributing to the improvement and implementation of the system. Its inaugural meeting took place on March 24, 2026.

These measures represent another important step in the institutional structuring of the SBCE, as the creation of specialized technical bodies plays a fundamental role in the development of the system’s operational elements, including market infrastructure, monitoring requirements, and methodological criteria applicable to environmental assets.

The key aspects of the resolutions are summarized below:

• CTCP Resolution No. 1/2026 approves the CTCP Internal Rules, establishing its structure, composition, responsibilities, and decision-making procedures. The Resolution also regulates the operation of thematic Working Groups that will support the Committee in carrying out its functions.
• CTCP Resolution No. 2/2026 establishes the Working Group on Financial Aspects (Financial WG), responsible for discussing and formulating recommendations regarding: (i) financial instruments and market mechanisms; (ii) asset registration, trading, and settlement; (iii) infrastructure and systems interoperability; among other issues related to the functioning of the SBCE. The Working Group will be coordinated by SEMC’s Implementation Subsecretariat.
• CTCP Resolution No. 3/2026 establishes the Working Group on Monitoring, Reporting and Verification of Emissions (MRV WG), responsible for discussing matters related to: (i) emissions monitoring requirements, reporting obligations, and independent verification procedures; (ii) integration of the MRV system with inventories and emissions databases; and (iii) transparency and traceability mechanisms. This Working Group will also be coordinated by the Implementation Subsecretariat.
• CTCP Resolution No. 4/2026 establishes the Working Group on Accreditation and De-accreditation of Methodologies for the Generation of Verified Emission Reduction or Removal Certificates (CRVEs) (Methodologies WG), responsible for discussing: (i) approval of methodologies applicable to CRVE generation; (ii) baseline, additionality, and permanence criteria; and (iii) methodological compatibility with the MRV system, in addition to issues related to asset integrity, methodological robustness, and reliability. The Working Group will be coordinated by SEMC’s Regulation and Methodologies Subsecretariat.

The Working Groups will have an initial term of up to one year, renewable for an additional period of equal length, and will be composed of CTCP member agencies and entities that express interest in participating in their activities. In addition, experts and representatives from institutions may be invited to attend meetings in a non-voting capacity.

Following the approval of the Resolutions, the SEMC presented to the CTCP a preliminary proposal for the sectoral coverage of the SBCE, aimed at defining the sectors that will become subject to emissions Monitoring, Reporting and Verification (MRV) obligations. The proposal contemplates a phased implementation of such obligations according to the following timeline:

• Starting in 2027: pulp and paper, iron and steel, cement, primary aluminum, oil and gas exploration and production, refining, and aviation sectors;
• Starting in 2029: mining, recycled aluminum, power sector, glass, food and beverages, chemicals, ceramics, and waste sectors;
• Starting in 2031: road, waterway, and railway transportation sectors.

The proposal also establishes, for each covered sector, a four-year preparatory period structured in successive phases: (i) first year: preparation of the monitoring plan; (ii) second and third years: effective emissions monitoring; and (iii) fourth year: preparation of the National Allocation Plan. During this period, companies will only be subject to emissions monitoring and reporting obligations, without, for the time being, being required to comply with the periodic reconciliation obligations established under the SBCE Law.

The publication of these resolutions reinforces the gradual advancement of the SBCE implementation agenda, and signals the beginning of important technical discussions aimed at defining the system’s operational pillars. Market infrastructure, the MRV system, and CRVE-generation methodologies are expected to play a central role in the coming months, with relevant implications for potentially regulated entities and participants in Brazil’s emerging carbon market.

In addition, the definition of sectoral coverage plays a central role in the implementation of the SBCE, as it will serve as the basis for establishing sectoral emissions caps, allocation criteria for Brazilian Emissions Allowances (CBEs), and the limits applicable to the use of offset mechanisms.

The Environmental, Climate Change and Sustainability Practice of Tauil & Chequer Advogados in association with Mayer Brown remains available to provide additional clarification regarding the regulatory impacts and opportunities related to the implementation of the SBCE.