Brazil’s MMA Regulates Payment for Environmental Services

On September 16, 2026, Brazil’s Ministry of the Environment and Climate Change (Ministério do Meio Ambiente e Mudança do Clima – “MMA”) issued Ordinance GM/MMA No. 1,777/2026, establishing rules for the Payment for Environmental Services (“PES”) modalities provided for under Law No. 14,119/2021, which established the National Policy for Payment for Environmental Services (Política Nacional de Pagamento por Serviços Ambientais – “PNPSA”). The PNPSA was regulated by Decree No. 13,018/2026, which delegated to the MMA the authority to issue rules governing PES modalities and their respective technical guidelines (we discussed Decree No. 13,018/2026 in an earlier Legal Update).

The key provisions of the Ordinance include:

• Link to services effectively provided: Payment must be linked to the effective provision of the contracted environmental service, in accordance with the environmental monitoring requirements established in the relevant agreement. Compensation to service providers may be monetary or non-monetary.
• Environmental Reserve Quota (Cota de Reserva Ambiental – “CRA”): Only the first sale of the instrument will qualify, “in view of the need to establish a link between the payer and the provider,” subject to registration requirements under the Rural Environmental Registry System (Sistema de Cadastro Ambiental Rural – “SICAR”) and applicable legislation.
• REDD+: Compensation linked to a certificate for Reducing Emissions from Deforestation and Forest Degradation (“REDD+”), as provided for under Article 3, III, of Law No. 14,119/2021, will only qualify under a non-market approach.
• Rural Product Note (Cédula de Produto Rural – “CPR”): Only the first transaction involving a CPR issued on the basis of activities provided for under applicable legislation will qualify, provided that the effective provision of environmental services has been demonstrated and the PNPSA’s social and environmental safeguards are observed.
• Non-monetary payments: Payment may also be made in the form of provision of services, donation of goods and investments such as technical training, access to equipment, and other forms of capacity building linked to the environmental service. Social improvements must be complementary and incremental to the provision of essential public services.

On the other hand, the Ordinance expressly excludes from the concept of PES: (i) payments arising from the sale of carbon credits; (ii) amounts paid by the granting authority or users to public service concessionaires in connection with the activities covered by the concession; and (iii) payments under CPRs where the obligation consists exclusively of the generation, issuance, delivery, assignment, or sale of carbon credits. For CPRs involving multiple environmental services or outcomes, the portion unrelated to the generation of carbon credits may qualify as PES, provided that it is separately specified.

PES agreements in effect on the date the Ordinance was issued may continue but must be brought into compliance with the new rules upon their first contractual review or within 12 months from the date of publication. For agreements involving Indigenous Peoples, Quilombola communities, traditional peoples and communities, and family farmers, the adaptation process must comply with the participatory and consultation processes applicable to social and environmental safeguards.

As noted in our previous Legal Update, Decree No. 13,018/2026 provided that the National Registry of Payment for Environmental Services (Cadastro Nacional de Pagamento por Serviços Ambientais – “CNPSA”) would be regulated by an MMA act, while the tax incentives applicable to amounts received as PES would be regulated by a joint act of the MMA and the Ministry of Finance. Neither matter, however, was addressed by the Ordinance, and both remain subject to further regulation.

Likewise, the structuring of the subprograms under the Federal Payment for Environmental Services Program (Programa Federal de Pagamento por Serviços Ambientais – “PFPSA”), including selection criteria, target audiences, funding sources, and monitoring systems, remains subject to an act to be jointly issued by the MMA and the proposing government body.

In this context, the new rules should be considered by payers and providers of environmental services, particularly those involved with CRA, CPR, REDD+, or carbon projects, when reviewing their contractual arrangements, both to assess whether their transactions qualify as PES and to comply with the deadline for adapting existing agreements.

The Environmental, Climate Change and Sustainability practice of Tauil & Chequer Advogados in association with Mayer Brown is available to provide additional information regarding this matter.