ESG Newsletter No. 02 – January, February and March, 2025

Check out our ESG Newsletter, which provides information on recent legislation, news, public consultations, and bills regarding environmental, social, and corporate governance topics in various sectors.

For more information, please contact our legal team.

Enjoy reading!

Demarest’s ESG Practice Area

Pay transparency

Federal Law No. 14,611/2023, known as the Equal Pay Law, aims to ensure equal pay and remuneration criteria for men and women, as well as to combat discrimination based on gender, race, ethnicity, origin or age.

The law and its respective regulations require companies with more than 100 employees to fill out a report on the Emprega Brasil Portal with information on remuneration criteria, policies for hiring and promoting women, and initiatives to support the sharing of family responsibilities.

Based on the information provided by companies on the Emprega Brasil Portal and in the eSocial system, the Ministry of Labor and Employment issues a pay transparency report, indicating alleged wage differences between men and women. Companies must release this report to the general public every six months.

Companies should have submitted the report’s information by March 31, 2025.

Several companies have taken legal action to avoid disclosing the report, claiming that it violates their right to due process and full defense, possible damage to their image and reputation, infringement of the principle of free competition and economic freedom, and raised questions regarding the criteria adopted by the Ministry of Labor and Employment to evaluate the alleged wage differences.

Companies not subject to rulings suspending the obligation to publish the report must comply with the legal deadlines for submitting information on the Emprega Brasil Portal and publish the report, under penalty of fines of up to 3% of the payroll, limited to 100 minimum wages.

Source: Companies must submit information for the 3rd Pay Transparency Report by February 28th

Psychosocial risks addressed in Risk Management Program

On May 26, 2025, the new wording of Regulatory Standard—NR—01 issued by the Ministry of Labor and Employment (“MTE”) entered into force. Among other changes, this standard introduces new obligations involving the identification and analysis of psychosocial risks in companies’ Risk Management Programs (“PGR”).

In short, all companies with employees must address in their respective PGRs an assessment of the the psychosocial risks to which their employees are exposed in the workplace, including them in the occupational risk inventory to establish an action plan to mitigate these risks.

Companies’ internal health and safety departments must be aware of the updated guidelines and take steps to revise the PGR within the legal deadline, ensuring full compliance with the new guideline aimed at improving mental health in the workplace. It is also essential that companies’ legal departments assess the company’s health and safety documentation to uphold regulatory compliance and mitigate legal exposure.

As reported by the MTE, the measure reinforces the need for healthy working environments, supporting workers’ mental health and contributing to a reduction in sick leaves and an increase in productivity. Employers who already adopt good practices regarding psychosocial risks will adapt to the requirements more easily.

Through these updates, the MTE aims to consolidate psychosocial risk management as an integral part of occupational safety and health strategies, creating safer and healthier environments for all.

Source: Brazilian companies will have to assess psychosocial risks as of 2025

FEDERAL

Independent producers of sugarcane and other biomass included in RenovaBio

At the end of 2024, the National Congress published Federal Law No. 15,082/2024, amending the National Biofuels Policy (“RenovaBio” – Federal Law No. 13,576/2017) to include independent producers of sugarcane and other biomass intended for biofuel production.

The law determines:

• the inclusion, in the policy, of the importance of adding value to the raw material destined for biofuel production and to Brazilian biomass as the foundation of RenovaBio. It also establishes predictability for biofuel participation, with an emphasis on the sustainability of the biofuel production chain and security of supply as a principle of the same policy.
• that each fuel distributor must certify that it has met its individual target every year, from the retirement of Decarbonization Credits on its property until December 31st of each year.
• that failure to meet the individual target by the fuel distributor constitutes an environmental crime and may generate a fine of up to BRL 500,000, proportional to the amount of Decarbonization Credits that have not been demonstrably acquired and retired (the fine’s proportion will be based on the highest average monthly price of the Decarbonization Credit observed during the period set for meeting the respective individual target).

The law also establishes a ban on the sale of any fuel whose distributor is not meeting its individual target, the inclusion of its name on a list of sanctions to be published and kept up to date by the Brazilian National Agency for Petroleum, Natural Gas and Biofuels (“ANP”), and a possible penalty of a fine of between BRL 100,000 and BRL 500 million.

The non-payment of the sugarcane producer’s share for biofuel production will subject the biofuel producer to a fine (ranging from BRL 100,000 to BRL 50 million) proportional to the amount of unpaid Decarbonization Credits.

Producers of sugarcane destined for the production of biofuel eligible for standard or primary data will be entitled to a share in the revenues from the trading of Decarbonization Credits issued and sold from the biomass they deliver.

The producer’s share of sugarcane destined for biofuel production must be paid by the month following the end of the harvest in which the Decarbonization Credits were issued.

FEDERAL

CONABIO Resolution No. 9/2024: National biodiversity targets for 2025-2030

On February 02,2025, the National Biodiversity Commission (“CONABIO”) published Resolution No. 9/2024, which sets the national biodiversity targets for the 2025-2030 period.

This resolution is founded on several decrees and the Brazilian Constitution and aims to integrate biodiversity into public policies and foster sustainability in several areas.

These targets goals include spatial planning to reduce biodiversity loss, ensuring that the entire Brazilian territory is under a cooperative and integrated territorial management process. In addition, the targets seek to eliminate deforestation and illegal conversion of native vegetation, restore 30% of the degraded areas of each biome and the marine coastal system by 2030, and conserve 80% of the Amazon biome and 30% of each biome and the marine coastal system.

Other important goals include:

• Stopping human-caused extinction of species;
• Stimulate genetic diversity;
• Ensure the sustainable and legal use and trade of wild species; and
• Reduce the introduction and impact of invasive alien species by 50% by 2030.

Resolution 9/2024 also aims at reducing all sources of pollution to levels that do not harm biodiversity, minimizing the impact of climate change on biodiversity, and promoting the sustainable use of biodiversity and bioeconomy, as well as encouraging the sustainable management of agriculture, livestock, aquaculture and forestry areas, sustainability in extractive fishing and the extraction of aquatic bioinputs, and the protection and recovery of ecosystem services.

To achieve these targets, the resolution proposes public policies and legal measures that encourage companies to monitor and reduce the impact of their operations on biodiversity, make sustainable consumption choices, strengthen biosecurity measures, eliminate harmful subsidies and increase positive incentives for biodiversity, and increase funding for the implementation of the National Biodiversity Strategy and Action Plan (“EPANB”). It also aims to bolster qualification and technical-scientific cooperation in the area, ensure the production and accessibility of biodiversity data, ensure equitable participation in decision-making and access to justice, and foster gender equity in the implementation of the EPANB.

FEDERAL

Law regulates waste, packaging and incentives to produce bioinputs for agricultural, livestock, aquaculture and forestry use

At the end of 2024, the National Congress published Federal Law No. 15,070/2024, regulating the production, import, export, registration, marketing, use, inspection, supervision, research, experimentation, packaging, labeling, advertising, transport, storage, fees, provision of services, disposal of waste and packaging and incentives to produce bioinputs for agricultural, livestock, aquaculture and forestry use.

The regulation applies to cultivation systems, including conventional, organic and agro-ecological systems, as well as bioinputs used in agriculture activities, including biostimulants or growth or performance inhibitors, semiochemicals, biochemicals, phytochemicals, metabolites, organic macromolecules, biological control agents, soil conditioners, biofertilizers and inoculants.

The law stipulates that registration with the federal agricultural defense agency is mandatory for: biofactories, importers, exporters, and traders of bioinputs or bioinput inoculants, as well as bioinputs or bioinput inoculants produced or imported for commercial purposes. In this regard, the regulation clarifies that the registration of bioinput inoculum permits its sale as a product or as an input for use in a bioinput production unit for personal use or to be used in a research institution or in the formulation of a commercial product.

Bioinputs produced exclusively for personal use are exempt from registration, as are semiochemical products with an exclusively mechanical action, such as plates and traps, and food attractants to be used in insect monitoring whose active ingredients come exclusively from biological fermentation or from food and its residues.

The transport of bioinputs produced for personal use is permitted between establishments of the same economic group, associations or cooperatives of producers, between establishments of the same owner, and between the industrial plant and related producers, as long as there is no act of trading and in accordance with the regulations of the federal agricultural defense agency. This transportation can take place within the context of integrated production, rural consortia, agrarian condominiums and the like, for the purposes of storage or use. The transported material must be accompanied by a document indicating the nature of the product, the destination and the production unit where the bioinput was produced for personal use, except when the transportation takes place within the same property where the bioinput was produced.

As for commercial production, the new law stipulates that bioinputs intended exclusively for export will be exempt from registration, which will be replaced by prior notification of production for export.

Concerning the established authority, the regulation states that it is the responsibility of:

• the federal agricultural defense agency:
  • to inspect the production of bioinputs for commercial purposes;
  • to inspect the import and export of bioinputs; and
  • to register establishments and commercial products.
• the agricultural agencies of the states and the Federal District to inspect:
  • the trade and transportation within the Federation unit and the use of bioinputs; and
  • the production of bioinputs in bioinput production units for personal use.

Regarding incentives, the new law authorizes the Executive Branch to use financial, fiscal and tax mechanisms to encourage research, development, production, use and trading of bioinputs for agricultural, livestock, aquaculture and forestry use. These mechanisms will prioritize small businesses that produce bioinputs for commercial purposes, agricultural cooperatives and family farmers who produce bioinputs for personal use.

The National Rural Credit System (“SNCR”) will be able to apply differentiated interest rates for rural producers and their cooperatives that use bioinputs in their production systems. Specific regulations will govern the means and requirements for attesting to the use of bioinputs.

Manaus Free Trade Zone establishes ZFM + ESG initiative

On March 21, 2025, the Manaus Free Trade Zone Superintendence (“SUFRAMA”) implemented the ZFM + ESG initiative through Ordinance No. 1.860/2025, which aims to encourage companies, industries and other institutions in the Manaus Free Trade Zone and SUFRAMA to implement social, environmental and corporate governance actions in line with ESG principles.

The initiative will last one year from the date of publication of the ordinance and may be renewed upon prior evaluation. Adherence is voluntary and does not result in obligations or penalties for not complying. Companies will be certified upon conclusion.

To join the ZFM + ESG initiative, companies must file a membership form through SUFRAMA’s Electronic Information System, appoint a professional in charge of implementing ESG practices, develop an action plan with goals and performance indicators, implement ESG practices, and publicize their actions to stakeholders.

In addition, they must submit an implementation report to SUFRAMA and authorize on-site follow-up visits by technicians. The form may be revoked by either party via written notice at least 15 days in advance.

While it is effective, however, companies must execute at least one action in each of the ESG dimensions: Environmental, social and governance.

• Among the environmental actions, we highlight the reduction of greenhouse gas emissions, efficient management of natural resources, waste management, pollution prevention and control, and biodiversity conservation.
• In the social scope, companies must ensure health and safety at work, foster diversity and inclusion, invest in talent development, respect human rights, and engage with the local community.
• In the governance scope, actions include adopting a code of ethics and transparency, defining a clear governance structure, conducting risk management, communicating with stakeholders, and promoting corporate social responsibility.

Source: Statement from Suframa

Brazilian Development Bank conducts public consultation on carbon certification landscape in the voluntary market

The Brazilian Development Bank (“BNDES”) held a public consultation on the carbon certification landscape in the voluntary market.

This initiative came after the approval of Federal Law No. 15,042/2024, which created the Brazilian Emissions Trading System. The law establishes that the methodologies for validating Certificates of Verified Emissions Reduction or Removal (“CRVE”) must be accredited and registered under the system.

The public consultation sought to collect contributions from diverse sectors of society to better understand how the carbon credit certification market in Brazil is perceived. The purpose was to identify developments and the best way to establish this service in Brazil, seeking to achieve the Nationally Determined Contributions (“NDC”) goals.

The final contribution deadline ended on April 25, 2025.

ANATEL receives first contributions regarding ESG seal

On March 25, 2025, the Brazilian National Telecommunications Agency (“ANATEL”) joined a meeting with representatives of the Inter-American Development Bank (“IDB”) and the Colin Consultoria and Ecoa ESG Tech consortium to present the first results of the project “Selo Climático ESG Anatel-BID” (ESG ANATEL-BID Climate Seal Project).

This project aims to promote ESG practices in telecommunications companies, contributing to global climate development goals.

The first phase of the project involved a comparative analysis of ESG practices at 68 international agents in the sector, including companies, regulatory entities, and global organizations. The insights obtained addressed carbon emissions, climate risk mitigation, energy consumption and efficiency, circular economy practices, e-waste reduction, regulatory monitoring, and alignment with the Paris Agreement and the UN Sustainable Development Goals (“SDGs”).

Marina Villela, representing the office of advisor Alexandre Freire, highlighted ANATEL’s role in fostering sustainable practices, emphasizing the commitment made during the 29th Conference of the Parties (“COP29”) to the UNFCCC. Cristiana Camarate, superintendent of consumer relations, emphasized the importance of promoting sustainable consumption within the scope of the ESG seal, seeking to educate consumers regarding energy efficiency and e-waste disposal.

The next stage of the project involves data collection and interviews with companies to identify incentives for adopting sustainable practices. This initiative is part of the strategic project “Governança 4.0 ESG”, approved by ANATEL’s Board of Directors, designed to enhance connectivity in Brazil and bring meaningful improvements to citizens’ lives.

For more information, please access the full report.

New CVM resolution imposes adoption of OCPC technical guidance 10 for listed companies.

At the end of 2024, the Brazilian Securities and Exchange Commission (“CVM”) published CVM Resolution No. 223, requiring the adoption of the Technical Guidance of the Accounting Pronouncements Committee (“OCPC”) 10 for listed companies from 2025 onwards.

OCPC 10 establishes guidelines for the recognition, measurement and disclosure of carbon credits, allowances and decarbonization credits (“CBIO”). Aligning Brazilian accounting practices with international standards aims to standardize them, ensuring greater transparency and consistency.

If the International Accounting Standards Board (“IASB”) issues a specific document regarding the recognition, measurement and disclosure of the topics covered, the guidance may be revised.

The resolution applies to all listed companies that originate or acquire carbon credits, emission allowances and CBIOs to fulfill decarbonization objectives or for trading purposes. The resolution entered into force on January 01, 2025, and applies to fiscal years initiated on or after this date.

CVM publishes regulation requiring the adoption of OCPC Technical Guidance 10 for listed companies – Securities and Exchange Commission

Brazil takes the lead in BRICS’ anticorruption agenda in 2025

On March 27, 2025, the Brazilian government officially announced, through the Brazilian Office of the Comptroller-General (“CGU”), that it will assume the presidency and leadership of BRICS’ anticorruption initiatives in 2025.

BRICS is a bloc formed by Brazil, Russia, India, China and South Africa, whose member countries have been making efforts towards cooperating in governance and international anticorruption matters.

As the leading country, Brazil will be responsible for coordinating the development and implementation of measures that strengthen prevention, transparency, and accountability regarding acts of corruption within the bloc. Among the main actions planned, we highlight the exchange of effective compliance and integrity practices, the strengthening of institutional anticorruption structures, and the expansion of international cooperation in investigations and recovery of misappropriated assets.

According to CGU Minister Vinícius de Carvalho, Brazil’s leading position reaffirms the country’s commitment to transparency and the fight against corruption, contributing to raising ethical and integrity standards at the international level, especially among emerging economies represented by the BRICS bloc.

For more information, please access the full report.

The Minister of Justice orders audit by the UGC of BRL 469 million unspecified parliamentary amendments

On March 21, 2025, the Brazilian Minister of Justice and Public Security, Flávio Dino, ordered the CGU to conduct a thorough audit to assess the destination of approximately BRL 469 million in parliamentary amendments that were not allocated clearly in the federal budget.

This amount corresponds to resources from rapporteur amendments (commonly named as “secret budget”), which were generic or even omitted their end use, contrary to basic standards of transparency and accountability.

The audit aims to investigate the trail of these funds and identify potential irregularities in their allocation or application. If there is concrete evidence of misappropriation or mismanagement of these funds, the information collected by the CGU may assist in establishing administrative proceedings and, potentially, judicial actions to hold those involved liable.

According to the minister, this measure seeks to ensure greater transparency and control in federal budget management, reinforcing the government’s commitment to anticorruption practices and to combating the misappropriation of public funds.

For more information, please access the full report.

MMA publishes a public notice for the forest concession of the Jatuarana National Forest, in Amazonas

The Ministry of the Environment and Climate Change (“MMA”) and the Brazilian Forest Service (“SFB”) published a notice for the forest concession of the Jatuarana National Forest (“Flona do Jatuarana”), located in the city of Apuí, in the south of Amazonas.

The forest concession covers a total area of 453,401.11 hectares, divided into four Forest Management Units (“UMFs”). The goal is to promote the sustainable use of forest resources, ensuring the conservation of biodiversity and the economic development of the region.

The forest concession of Flona do Jatuarana is expected to bring several benefits, including reducing deforestation and forest degradation through sustainable management practices, increasing the generation of direct and indirect jobs in the region, contributing to local socioeconomic development, improving the quality of life of local communities, implementing social and environmental projects, and strengthening the regional economy, by exploiting forest resources sustainably and attracting investment.

Source: Statement of the Brazilian Forest Service

Ban on import of solid waste and tailings

On January 07, 2024, the National Congress published Federal Law No. 15,088/2025, which amended the National Solid Waste Policy (Federal Law No. 12,305/2010 ), banning the import of solid waste and tailings, including paper, paper derivatives, plastic, glass and metal, except in the following cases:

• the import of waste used in the transformation of strategic materials and minerals, including long-fiber paper scraps, waste metals and metallic materials; and
• the import of solid waste derived from Brazilian products previously exported by the importer or manufacturer of auto parts, except tires, for the exclusive purpose of reverse logistics and full recycling, even if classified as hazardous waste.

Mato Grosso establishes Circular Economy Incentive Policy

On February 14, 2025, Law No. 12,806/2025 entered into force, establishing a state policy to encourage the circular economy and the use of an economically circular product seal in the state of Mato Grosso.

The new policy aims to reduce the environmental impact of the production chain, encourage recycling, reward good practices, reduce waste disposal costs, raise consumer awareness of environmental responsibility and provide transparency regarding environmental costs.

The economically circular product seal will encourage sustainable production and consumption practices. Products with environmental certification recognized by the Brazilian National Institute of Metrology Standardization and Industrial Quality (“INMETRO”) will be authorized to use the seal, based on criteria such as:

• waste reduction and increased recycling;
• reduction of pollution and greenhouse gas emissions;
• saving water, energy and raw materials;
• use of renewable energy sources;
• greater possibility of recycling and reuse; and
• implementation of reverse logistics.

The validity and periodic re-evaluation of the seal will be defined by regulation.

Integrity programs to mitigate social and environmental risks 

In December 2024, Decree No. 12,304/2024 was published, regulating the criteria for evaluating integrity programs that are mandatory in large-scale public contracts and the rehabilitation of bidders or contractors, as well as in cases where the integrity program is presented as a tiebreaking criterion for proposals, as provided for in Law No. 14,133/2021 (the Bidding Law).

In addition to regulating the evaluation of integrity programs, which are recognized mechanisms for the prevention, detection, and remediation of corruption and fraud, the decree includes significant ESG aspects, adding new targets to integrity programs, such as the mitigation of social and environmental risks and the protection of human rights.

In this regard, in addition to the mechanisms that traditionally integrate these structures, the decree also includes among the elements of an effective integrity program:

• specific mechanisms to ensure compliance with human and labor rights and the preservation of the environment;
• transparency and socio-environmental liability of the legal entity; and
• continuous monitoring aimed at improving the integrity program for preventing, detecting, and combating any conduct that violates human and labor rights and the environment.

Access our client alert for a detailed analysis of the decree: Decree establishes rules for integrity programs in public bids and government contracts.

Supplementary Law No. 214/2025 and tax incentives for Sustainability and Environmental Conservation

In January 2025, Supplementary Law No. 214/2025 entered into force, introducing significant changes to Brazilian tax legislation. It established 3 new taxes: the Tax on Goods and Services (“IBS”), the Social Contribution on Goods and Services (“CBS”) and the Selective Tax (“IS”).

The IBS is a tax shared between states, municipalities and the Federal District, and replaces the Brazilian Value-Added Tax (“ICMS”) ICMS and the Tax on Services (“ISS”). It is levied on transactions involving goods and services, covering both tangible and intangible goods. The CBS, on the other hand, is under the Federal Government’s jurisdiction and replaces the Social Integration Program (“PIS”) and the Contribution for Social Security Financing (“Cofins”).

The IS is applied to specific products, such as cigarettes and alcoholic beverages, in an effort to discourage consumption of these items. It is under the Federal Government’s jurisdiction and aims to encourage public health and sustainability.

The law also creates the IBS Steering Committee, which coordinates and manages IBS collection, ensuring greater efficiency and transparency in the process. This committee, comprised of representatives from the states, municipalities, and the Federal District, defines the reference rates and the rules for calculating and paying the IBS.

The law provides for a transition period until 2033 to implement the new taxes. During this period, the rates and calculation bases will be gradually adjusted, allowing taxpayers to adapt to the new tax system.

In line with sustainability concerns, Article 137 of the law establishes a 60% reduction in the IBS and CBS rates applicable to the supply of agricultural, aquaculture, fishing, forestry and plant extraction products in natura. The supply of forestry products includes environmental services for the conservation or recovery of native vegetation, even when supplied under the sustainable management of agricultural, agroforestry and agrosilvopastoral systems.

The measure aims to strengthen forestry production activities and products from Brazil’s native socio-biodiversity as an essential environmental conservation and recovery service and is consistent with the guidelines of the National Policy on Payment for Environmental Services (Law No. 14,119/2021).

Source: Notice by the Ministry of Finance

FEDERAL

Compulsory annual greenhouse gas emission reduction targets in fuel sales defined

In December 2024, the National Energy Policy Council published CNPE Resolution No. 14/2024, defining the compulsory annual targets for reducing greenhouse gas emissions (“GHG”) in fuel sales, and the respective tolerance periods, established in units of Decarbonization Credit (“CBIO”), considering the improvement in the carbon intensity of the Brazilian fuel mix.

Carbon Market in Brazil

In December 2024 Law No. 15,042/2024 entered into force, regulating the Carbon Market in Brazil and creating the Brazilian Greenhouse Gas Emissions Trading System (“SBCE”).

The new law provides for GHG caps and the trading of assets representing GHG emissions, reductions, or removals – in line with the Brazilian National Policy on Climate Change (“PNMC”), regulated by Federal Law No. 12,187/2009.

The law states that the SBCE will function in compliance with the “cap-and-trade” system, which regulates GHG emissions by establishing an emission cap for different sectors of the economy that receive or purchase permits (within the established cap). These permits can be traded when, for example, those responsible for the facilities and GHG emission sources (operators) reduce or exceed the established emission limits.

In this case, the operator issuing GHGs below the established cap can sell their permits proportionally to the reduced emissions, while the operator exceeding the cap can purchase them, also proportionally to the amount emitted in excess.

The regulation included activity operators within the new obligations provided towards reducing or offsetting GHG emissions – without distinguishing sectors (except for primary agribusiness production). The measures to be complied with by these operators vary according to the amount of annual emissions, specifically:

• More than 10 thousand tCO2e/year: Requires compliance with reporting obligations.
• More than 10 thousand tCO2e/year and up to 25 thousand tCO2e/year: Requires submission, to the managing body of the SBCE, of a plan for monitoring emissions and annual reports on GHG emissions and removals.
• More than 25 thousand tCO2e/year: Requires submission of annual reports on regular compliance with obligations, in addition to the obligations mentioned above.

The regulation divided the SBCE into the following phases:

• Phase I: 12-month term, extendable for another 12 months, for publishing Federal Law No. 15,042/2024, counted from the entry into force of this regulation.
• Phase II: One-year implementation term for emission reporting instruments by operators.
• Phase III: Two-year term, during which operators’ sole obligation will be to submit a monitoring plan and report on GHG emissions and removals to the SBCE’s managing body.
• Phase IV: Effective term of the first Brazilian National Allocation Plan, including the unencumbered distribution of Brazilian Emissions Quotas (“CBEs”), and the implementation of the SBCE’s asset market.
• Phase V: Full SBCE implementation, by the end of the first Brazilian National Allocation Plan.

Operators issuing GHGs above the authorized cap must purchase CBEs or Certificates of Verified Emissions Reduction or Removal (“CRVEs”).

Maximum emission caps have not yet been defined, but must be provided through the National Allocation Plan.

Regarding the voluntary carbon market, the new law has introduced important regulations, such as the possibility of integrated operations with the regulated system. Thus, carbon credits arising from the voluntary market can migrate to the SBCE, provided that they meet specific criteria.

The regulation also addresses the method of taxing assets (CBEs and CRVEs) and carbon credits. It also provides new possibilities for generating carbon credits in Permanent Preservation Areas, Legal Reserves, and Conservation Units.

As for the International Transfer of Mitigation Results (“ITMO”), the new law assigns the power to authorize it to the designated national authority. However, adjustments must be implemented to the national emissions inventory, including the provision that CRVEs must be tracked by the SBCE. Further definitions of such transfers will depend on a regulation to be established by the Interministerial Committee on Climate Change (“CIM”), taking into account the multilateral regime on climate change and the international commitments made by Brazil.

Access our ebook for an in-depth analysis of the decree.

COP29 ends with agreement on new global climate finance target

During the 29th UN Climate Change Conference (“COP29”) held in Baku, Azerbaijan last year, an agreement was reached on the New Collective Quantified Target (“NCQG”) for climate finance under the Paris Agreement.

The agreement states that developed countries must “take the lead” in providing at least USD 300 billion annually by 2035 to developing countries, aimed at supporting them in implementing actions to reduce greenhouse gas emissions (mitigation) and adapt to the impacts of climate change. The funds must come from different sources, including public, private, bilateral, multilateral and alternative sources.

Negotiated under Article 9 of the Paris Agreement, the NCQG will replace the current global funding target of USD 100 billion a year, from 2020 to 2025, from developed nations to developing nations, which has not been fully met.

Source: COP29 ends with agreement on new global climate finance target – Ministry of the Environment and Climate Change (www.gov.br)

Amapá’s Code of Socio-Environmental Governance, Sustainable Use of Natural Resources and Climate Change established

On January 09, 2025, Supplementary Law No. 169/2025 was published, which establishes the Code of Socio-Environmental Governance, Sustainable Use of Natural Resources and Climate Change in the State of Amapá.

The new law defines targets, guidelines and programs to be implemented by the Executive Branch, covering areas such as water, air, solid waste management, reverse logistics and environmental inspection. In addition, the law updates the general guidelines for environmental licensing in the state. Projects and activities subject to licensing will be classified by the State Council for the Environment, Sustainable Use of Natural Resources and Climate Change (“COEMA”), according to their size and polluting potential.

The State Environment Secretariat (“SEMA”) will be responsible for the environmental licensing of activities or projects that use environmental resources or may cause environmental degradation, including:

• projects located within state-owned conservation units, except for Environmental Protection Areas (“APAs”);
• activities carried out in forests and other forms of natural vegetation of permanent preservation, in accordance with the Forest Code (Law No. 12,651/2012);
• projects whose direct environmental impacts go beyond the territorial limits of one or more municipalities; and,
• activities delegated by the Federal Government to the State of Amapá, through a legal instrument or agreement.

The supplementary law entered into force in April 2025.3

PRO-AdaptaVias Program established

On February 07, 2025, the Ministry of Transport published Ordinance No. 64/2025, establishing the PRO-AdaptaVias Program.

This program aims to adapt and increase the resilience of federal land transport infrastructure to climate change.

The program focuses on:

• Strategic planning: developing short, medium, and long-term plans to adapt the federal land transport infrastructure.
• Engineering innovation: fostering innovative solutions that increase the resilience of federal land transport infrastructure.
• Nature-based solutions: encouraging natural alternatives to strengthen federal land transport infrastructure adaptation.
• Partnerships and cooperation: collaborating with universities, research institutes and start-ups to develop studies on climate change adaptation.
• Data collection and disclosure: organizing information regarding climate impacts on federal infrastructures.
• Disaster risk management: coordinating adaptation actions with risk management to ensure their effectiveness.
• Technical training: strengthening the management and maintenance skills of the responsible bodies.
• Financing: identifying and facilitating access to public and private sources of funding.
• Economic analysis: evaluating the costs and benefits of adaptation measures to support decisions.
• Follow-up and evaluation: continuously monitoring and adjusting the actions implemented.

In addition, Ordinance No. 64/2025 authorizes the Sustainability and Strategic Management Undersecretariats of the Ministry’s Executive Secretariat to structure and implement solutions for intelligence, monitoring, management and recording of data on climate change adaptation in the federal land transport infrastructure (SIM-AdaptaVias), including data collection activities, analysis and the provision of subsidies for planning and decision-making for climate adaptation of road and rail transport infrastructure.

SIM-AdaptaVias aims to consolidate, integrate and disseminate information on climate risks, impacts and resilience of the federal land transport infrastructure, allowing for continuous monitoring with advanced techniques, and assisting in the formulation of public policies and the evaluation of the effectiveness of climate adaptation measures.

Ordinance No. 64/2025 entered into force on the date of its publication.

Law establishes guidelines governing the Plan for Adapting to Climate Change and Facing Environmental Disasters in Piauí

On January 29, 2025, Law No. 8,571 entered into force, establishing guidelines for developing the Plan for Adapting to Climate Change and Facing Environmental Disasters in the state of Piauí.

The new law aims to implement measures to reduce the vulnerability of environmental, social and economic systems to the effects of rainfall, floods and river flows, as well as other environmental disasters.

Law No. 8,571 provides the following guidelines for drawing up the plan:

• Climate risk management and reduction: preventing losses and damage based on the vulnerability defined by the National Policy on Climate Change (“PNMC”).
• Economic-financial and socio-environmental instruments: adapting natural, human, productive and infrastructure systems.
• Strategy integration: aligning mitigation and adaptation actions at the municipal and state levels.
• Compliance with federal laws: complying with Law No. 12,187/2009 (PNMC) and Law No. 12,608/2012 (PNPDEC).
• Vulnerability-based priorities: identifying and prioritizing the most vulnerable sectors and regions.
• Strengthening the agricultural sector: encouraging low-cost and low environmental impact techniques.
• Monitoring and review: reviewing the plan every five years.

The plan will establish measures to integrate climate change risk management, among which the following stand out:

• Integrated early warning and response system: using advanced technologies to anticipate extreme events and mobilize emergency resources.
• Training and capacity-building programs: ensuring agile disaster prevention and response.
• Resilient urban planning: reviewing building codes and zoning to minimize risks.
• Incentives for sustainable agricultural practices: supporting the transition to precision agriculture.
• Climate change education: integrating disaster risk management into all levels of education.
• Sustainable land use: relocating communities in high-risk zones.
• Innovation and research: fostering disaster mitigation technologies.
• International partnerships: sharing best practices and technical resources.
• Infrastructure inspections and maintenance: ensuring the safety and resilience of dams, bridges and drainage systems.
• Effective communication plan: informing the public about risks and emergency actions.

The plan’s implementation at state and municipal levels may be financed by the State Fund on Climate Change and Combating Poverty, established by Law No 6,140/2011, or otherwise by another mechanism to be defined by the Executive Branch.

Decree regulates the Pantanal Climate Fund

On February 07, 2025, Decree No. 16,556/2025 entered into force, regulating the State Fund for the Sustainable Development of the Pantanal Biome, known as the Pantanal Climate Fund, created by Law No. 6,160/2023.

The Pantanal Climate Fund aims to encourage the sustainable development of the Pantanal biome and manage financial transactions for Payments for Environmental Services Programs (“PSA”) in the Pantanal Plain Restricted Use Area (“AUR-Pantanal”) and for the conservation of ecosystems, as part of the State Environmental Services Program (“PESA”).

The fund’s resources will be invested according to the following criteria:

• PSA in the Pantanal biome: priority for areas of high environmental vulnerability.
• Governance and sustainable development: support for scientific research, innovation and program management, limited to 10% of annual funding.
• Restoration and conservation projects: focus on restoring ecosystems, protecting water sources, recovering degraded areas, preventing and fighting forest fires, and supporting sustainable production chains, integrated with PSA in the Pantanal biome.

Funded projects must provide performance indicators to be monitored by the Steering Committee, including carbon sequestration, reduction of greenhouse gas emissions, recovery and conservation of ecosystems, socio-economic impact on local communities and semi-annual reports with quantitative and qualitative data.

Climate Plan: Federal Government conducts public consultation of sector and themed adaptation plans

From March 10, 2025, to April 25, 2025, Brazil’s Federal Government received contributions to the public consultation of the sectoral and thematic plans of the Climate Adaptation Plan, through the Brasil Participativo platform.

These plans are steered by the Brazilian National Adaptation Strategy (“ENA”) and aim to include climate change adaptation strategies in policies and practices across various sectors. They set goals, actions, indicators, and responsibilities aimed at preventing and reducing climate change impact.

The plans are divided into two categories:

• Sector Plans, which address specific economic areas; and
• Themed Plans, which address broader issues.

The public consultation involved 16 plans, including sectors such as agriculture and livestock, cities, industry and mining, energy, health, and topics such as biodiversity, racial equality, Indigenous peoples, and water resources.

To encourage contributions from society, the government, and the Brazilian Climate Change Forum (“FBMC”) publicized the matter through the Ministry of Environment and Climate Change’s (“MMA”) and FBMC’s channels on YouTube.

The Climate Adaptation Plan, which includes the ENA and sector and themed plans, aims to guide, promote, implement, and monitor climate change adaptation actions, with short, medium, and long-term measures focused on sustainable development and climate justice. This plan will steer climate actions in Brazil until 2035 and includes a plan to mitigate greenhouse gas emissions.

In addition, the Climate Plan brings transversal climate action strategies, establishing implementation methods such as financing, governance, and training, along with fair transition measures. The Interministerial Committee on Climate Change (“CIM”), formed by 23 ministries, has been developing the plan since 2023.

All components of the Climate Plan will undergo a public consultation, after which the contributions received will be analyzed and incorporated into a new draft, which will be submitted for the CIM’s approval and subsequent release.

Sergipe creates the Payment for Environmental Services State Program

On February 10, 2025, State Decree No. 1,017/2025 was published, which:

• regulates the application, within the scope of the state of Sergipe, of Federal Law No. 14,119/2021, creating the National Policy for Payment for Environmental Services; and
• creates the Payment for Environmental Services State Policy (“PEPSA”), the State Registry of Payment for Environmental Services Projects and the State Committee for the Payment for Environmental Services Program.

PEPSA’s main target is to encourage actions, projects and businesses that support payment for environmental services to maintain, recover, improve and increase the supply of ecosystem services throughout the state, seeking to:

• increase carbon capture, contributing to the mitigation of climate change and the reduction of greenhouse gas emissions;
• preserve biodiversity, ensuring the protection of native species and their habitats;
• protect water resources, ensuring the quality and quantity of water available to communities and ecosystems;
• preserve the soil, fostering practices that prevent degradation and encourage its recovery;
• value genetic heritage and local traditional knowledge, recognizing the importance of traditional communities in environmental conservation.

According to the decree, the following forms of payment for environmental services may be adopted:

• direct payment in cash;
• supply, directly or by reimbursement, of seeds, seedlings, inputs, materials, equipment and technical assistance for the conservation, protection and restoration of native vegetation, recovery of degraded areas and modeling of agroforestry businesses and implementation of agroforestry systems;
• subsidies and tax incentives provided for by law;
• provision of social improvements to rural and urban communities;
• provision of technical, operational and financial support for socio-environmental management; and
• green bonds.

All projects carried out in Sergipe must be registered in the State Register of Payment for Environmental Services Projects.

The Executive Branch can provide support, financial or otherwise, to rural landowners who join the state’s payment for environmental services projects.

Tocantins establishes rules for free, prior, and informed consultation in the REDD+ Program

On February 25, 2025, the Secretariat of the Environment and Water Resources of the state of Tocantins published Normative Instruction No. 01/2025, establishing rules for the free, prior and informed consultation process (“CLPI”) under the Jurisdictional Program REDD+ of the state of Tocantins.

This program aims to reduce greenhouse gas emissions resulting from deforestation and forest degradation, as well as promote the conservation and sustainable use of natural resources.

The CLPI process regulated by the normative instruction provides for the following phases:

• Cooperative workshops and consolidation meetings: Seek to spread information and promote the alignment, engagement, and development of the program through collaborative efforts to define projects, initiatives, and priorities.
• Online consultation: Involves formal contributions from society, NGOs, the academia, private sector, and other interested segments to evaluate and improve the actions and strategies of the program.
• Public hearing: Aims at promoting communication between representatives of Indigenous peoples, traditional communities, and family farmers, and at enabling the population’s active contribution in decision-making and monitoring of the program’s activities.

FEDERAL

First public calls for the Restaura Amazônia Program published

In December 2024, the Brazilian Development Bank (“BNDES”) and the Ministry of the Environment and Climate Change (“MMA”) published the first public calls for proposals for the “Restaura Amazônia” (Restore Amazon) program.

The calls will select projects for ecological and/or productive restoration, strengthening biodiversity conservation and fostering the restoration production chain within the territories that make up Restaura Amazônia. The initiative will prioritize conservation units, agrarian reform settlements, indigenous territories and quilombolas in the surrounding areas.

Proposals must include:

• mapping and diagnosing the area in order to draw up the restoration plan;
• local coordination and mobilization of partners;
• preparing the areas and implementing the selected restoration techniques;
• maintenance and monitoring; and
• strengthening the restoration production chain, including professional training for local players.

The deadline for carrying out the projects will be up to 48 months, provided that:

• restoration actions should be started within the first 24 months; and
• monitoring and maintenance of all restored areas will occur over the following 24 months.

The Restaura Amazônia Program is aimed at non-reimbursable financing for ecological restoration activities using native species and/or agroforestry systems (“SAFs”).  As part of the National Plan for the Recovery of Native Vegetation (Planaveg 2025-2028), the initiative aims to contribute directly to the goal of recovering 12 million hectares of native vegetation by 2030.

Three organizations have been selected to evaluate and screen the projects submitted:

• the Brazilian Institute for the Environment and Renewable Natural Resources (“IBAMA”) (Brazilian Institute of Municipal Administration), which will work in the states of Acre, Amazonas and Rondônia;
• the Brazilian Foundation for Sustainable Development (FBDS), which will work in the states of Tocantins and Mato Grosso; and the International Conservation of Brazil (CI Brasil), which will work in the states of Pará and Maranhão.

The organizations’ duties include hiring selected operators in the territories (the partners do not carry out the execution), monitoring and rendering accounts for the projects’ execution, and visiting the territories.

Source: MMA and BNDES launch the first calls for Amazon restoration

Restaura Amazônia public call selects entities for forest recovery projects using BRL 450 million in funds – Secretariat of Social Communication (www.gov.br)

Rules for sustainable fixed-income securities offerings effective in March

On March 24, 2025, the new rules for offerings of sustainable fixed-income securities entered into force. They were included in the Code of Public Offerings of the Brazilian Financial and Capital Markets Association (“ANBIMA”) and were designed to bring more clarity and transparency to the sustainable finance market in Brazil.

These new guidelines were developed after a public hearing held between November and December 2024, in which suggestions for improvement were received. Financial institutions will now be able to include a statement in their offering materials indicating that they follow ANBIMA’s criteria.

The key elements of the new rules include:

• Detailed description of financed projects: the offering documents must include information on the projects to be financed, general characteristics of the offering, risk factors and remuneration.
• Second Opinion (PSO): the transaction must be supported by an opinion issued by an independent entity, assessing whether the offering is in line with the sustainability criteria.
• Periodic reports: institutions must provide periodic reports on the use of resources and/or compliance with sustainability targets.

Energy Transition Acceleration Program (“PATEN”) established

On January 23, 2025, Law No. 15,103/2024 entered into force, establishing the Energy Transition Acceleration Program (“PATEN”), seeking to:

• encourage the financing of technological innovation development projects;
• bring financial institutions closer to companies interested in developing sustainable development projects;
• foster the generation and efficient use of low-carbon energy through sustainable projects in line with Brazil’s commitments to reduce greenhouse gas emissions (“GHG”), focusing on the mitigating potential of the use of energy generation technologies based on the recovery and energetic utilization of waste;
• stimulate activities associated with energy transition in coal regions.

The new law specifies sustainable development projects that aim to carry out infrastructure works, modernize, expand, or set up sustainable energy production parks, conduct technological research, and develop technological innovations that provide socio-environmental benefits or mitigate environmental impacts.

These projects must be associated with priority sectors involving, among other things, the development of technologies, projects and production of fuels that reduce the emission of GHG, such as ethanol, biodiesel, biogas, biomethane, green hydrogen, carbon capture and storage, energy recovery and utilization of solid waste, nuclear fission and fusion, among others.

The law also created the Sustainable Development Guarantee Fund (Green Fund), managed by the Brazilian Development Bank (“BNDES”), to guarantee, in whole or in part, the risk of financing granted by financial institutions for the development of projects within the scope of PATEN. Therefore, legal entities with an approved sustainable development project will be able to pay into the Green Fund credits that they hold against the Federal Government (for example, precatory and credit rights arising from final court decisions against the Federal Government, and/or tax credits with an Electronic Request for Restitution, Reimbursement or Refund granted by the Special Secretariat of the Federal Revenue Service of Brazil).

The legal entity that pays in credits to the Green Fund will receive participation quotas equivalent to the amount paid in, and may withdraw them by canceling the corresponding quotas, provided that the amount necessary to guarantee the contracted financing transactions is preserved.

State Renewable Hydrogen and Low Carbon Hydrogen Policy established in the state of Amazonas

In January 2025, Law No. 7,369/2025 was published and entered into force, creating the State Renewable Hydrogen and Low Carbon Hydrogen Policy in the state of Amazonas.

The law seeks to encourage sustainable development, diversify and expand the energy mix, reduce greenhouse gas emissions and tackle climate change.

According to the new law, production, processing, storage, transportation and electricity generation activities using renewable hydrogen and low-carbon hydrogen will be subject to environmental licensing.

Projects in these areas must adopt accident or disaster risk management measures and comply with fire safety standards.

A Presidential act will regulate the implementation of the program.

New law establishes the Alagoas Renewable Rural Energy Program

On January 20, 2025, State Law No. 9,472/2025 entered into force, establishing the Alagoas Renewable Rural Energy Program, which aims to support the distributed generation of electricity from renewable sources, such as solar, wind, biomass, biogas and biomethane, in rural production units.

It aims to expand the supply of energy in rural areas, fostering competitiveness, sustainability and efficiency in production systems, as well as promoting the development of new agricultural business in Alagoas. Key guidelines include the advancement of energy generation systems, technical training, the granting of economic subsidies and tax incentives.

The program also seeks to raise awareness among rural producers and business owners regarding the adoption of renewable sources, foster innovation and attract investment to agribusiness. The actions are aimed at rural producers, pork farmers, agro-industries and their organizations, as well as technicians, researchers and students.