Regulated Carbon Market: Emissions Measurement Timeline for Regulated Sectors in Brazil

The Brazilian Federal Government has set the implementation schedule for monitoring, reporting, and verification (MRV) obligations for sectors regulated under the Brazilian Emissions Trading System (SBCE). The requirements will be phased in over three stages from 2027 to 2031, in accordance with Ordinance No. 3,199/2026 of the Secretariat for Economic Monitoring of the Ministry of Finance (SEMC/MF), published on October 29, 2026.

Who Should Comply?

The MRV requirement applies to entities with annual emissions exceeding 10,000 tCO₂e, while the periodic reconciliation requirement applies only to those exceeding 25,000 tCO₂e (art. 30, I and II, Law No. 15,042/2024).

Implementation will be phased in over three stages, with sectors identified by CNAE codes (the Brazilian system used to identify and classify the business activities carried out by a company) (art. 3 and annexes I through III, SEMC/MF Ordinance No. 3,199/2026). The year indicated corresponds to the first year (A1) of each stage:

• Phase 1 (A1 in 2027): aluminum; iron and steel (integrated mills); cement; oil and natural gas exploration and production; chemical industry (adipic acid, phosphoric acid, nitric acid, ammonia, ethylene, dichloroethane, vinyl chloride, and carbon black/soot); mining (iron ore and bauxite); pulp and paper; and glass.
• Phase 2 (A1 through 2029): ceramics; iron and steel (semi-integrated mills); chemical industry (other products); food and beverages; mining (other mineral substances); oil refining; and the electricity sector.
• Phase 3 (A1 through 2031): waterway, rail, and road transportation.

Points to Note

• The inclusion of a CNAE code in the ordinance’s annexes does not, in and of itself, subject all activities covered by that code to the MRV (art. 3, § 2).
• The SBCE’s managing body will continue to define, in specific regulations, the regulated sources, facilities, and activities (art. 3, § 3).
• An activity is considered regulated if it is carried out at the facility or by a set of mobile sources, even if it falls under the establishment’s secondary CNAE code (see note “a” of annexes I, II, and III).
• In the iron and steel sector, Stage 1 covers only integrated mills (ore reduction and liquid steel production within the same complex), while Stage 2 covers semi-integrated mills that produce steel from scrap and pig iron purchased from third parties (see notes in annexes I and II).
• In air transport, MRV will comply with ANAC regulations under the ProBioQAV (National Sustainable Aviation Fuel Program) framework, with information interoperability between ANAC and the managing agency, without exemption from SBCE requirements (art. 4).

Compliance Timeline

Under article 2 of the ordinance, the obligations will be implemented as follows:

• A1: Submission of the monitoring plan to the managing authority for review and approval;
• A2: Monitoring of emissions and removals throughout the calendar year in accordance with the approved plan;
• A3 and following years: continued monitoring and submission of the verified emissions and removals report for the prior calendar year.

The minimum content, format, deadlines, and procedures for the plan and the report will be set forth in a specific regulation issued by the managing agency and published no less than 150 days before the start of the respective obligations (Article 2, sole paragraph).

Next Steps Announced by the Federal Government

In a statement issued alongside the ordinance, Brazil’s government clarified that:

• The ordinance does not impose emission limits or create immediate costs to the regulated sectors; the emissions cap and the allocation of Brazilian Emission Allowances (CBEs) will be governed by the National Allocation Plan (PNA), which is scheduled to take effect in 2030;
• Still in 2026, the Chamber of Regulatory Affairs (CAREG) will be established, with the sectors from Phase 1 providing input on the development of standards and measurement methodologies;
• The Brazilian MRV Program (PB-MRV) will be established by decree and specific regulation that set forth guidelines, measurement methodologies, and accreditation rules for Validation and Verification Bodies (OVVs); the public consultation on the decree is scheduled for November 2026, with publication expected later this year;
• Also in November 2026, a public consultation will be opened on the decree for the Brazilian Emissions Offset Program (PBCE), which will govern the accreditation of methodologies for issuing Verified Emission Reduction or Removal Certificates (CRVEs), with the aim of having the first methodologies accredited in 2027; and
• Training programs will be offered to regulated sectors starting in 2027.

Status of the SBCE

With this ordinance, the SBCE enters the final stretch of its regulation phase, scheduled to conclude in December 2026. Law No. 15,042/2024 provides for five implementation phases (art. 50):

1. Regulation (two years);
2. Operationalization of reporting tools (one year);
3. Submission of the emissions monitoring and reporting plan (two years);
4. Implementation of the first National Action Plan (PNA), with free allocation of CBEs; and
5. Full implementation of the market, with the first CBE auction.

For more information on this topic, please contact Mattos Filho’s Environmental Law & Climate Change practice.