Emissions and Removals in the SBCE
A contribution to Brazil's first MRV rule, filed to Consulta Pública nº 1/2026. We support the staging and asked for no sector to be moved — our contribution concerns one question the draft raises but does not answer.
The foundation, not the plumbing
MRV is the foundation the cap, the allocation and the CRVE limits are built on. Fix a boundary problem now and it costs a sentence. Fix it after three reporting cycles and you are re-baselining the data the whole system rests on.
On 28 July 2026 the Secretaria Extraordinária do Mercado de Carbono opened Consulta Pública nº 1/2026 on the draft Portaria that sets the implementation stages for MRV obligations under the SBCE. It is the inaugural regulatory act of the Programa Brasileiro de MRV, and the first concrete step in operationalising Lei nº 15.042/2024. Three stages, phased by CNAE code, with the first cohort beginning in 2027.
NorthStar ESG Advisory filed on both routes the consultation offers: a submission on the Regulatory Impact Analysis, and nine comments on the operative text. We support the staging, and asked for no sector to be moved. Our contribution concerns one question the AIR itself raises and the draft does not answer.
The missing word
Lei nº 15.042/2024 requires the monitoring, reporting and verification of emissions and removals. Article 29 says so. Article 32 repeats it. The draft Portaria uses the full formulation in some places and drops removals in others.
The consequential instance is article 2, III. It creates a verified Report of Emissions and Removals of GHG, then defines its subject matter as the emissions of the previous calendar year. Read literally, removals are monitored and never reported. Three words correct it.
This is a drafting slip rather than a policy disagreement, and the AIR shows the intention was otherwise. Its pulp and paper analysis states that forest assets controlled by or linked to industrial operators create a need to define, in the MRV plans, how and under what conditions removals may be monitored, reported and eventually taken into account, and that the inclusion of removals is not a common feature of emissions trading systems and requires specific rules.
Pulp and paper is in Stage 1, with A1 in 2027. The sector that raises the removals question is in the first cohort, so the question cannot be deferred.
Where the boundary is not drawn
Brazil is about to run two accounting systems over the same physical tonnes. Regulated operators will report at installation level. Carbon projects will quantify against a counterfactual baseline and generate CRVEs that flow back into compliance. Where those two overlap, someone has to say which system records the tonne.
The Law makes this concrete. Article 1, paragraph 4 lets an operator account for net emissions from rural areas it owns or controls and that are integrated into its production. Paragraph 5 then provides that removals exceeding emissions do not automatically become CRVEs. So the same removal can follow one of two routes, at the operator's election, and nothing in the draft requires that election to be declared.
The striking part is that the AIR already solves this problem once. For own-generation and cogeneration units embedded in industrial plants, it states that the MRV boundary must clarify whether those emissions are reported in the electricity sector or in the host sector, expressly to avoid overlapping obligations and inconsistency between inventories. That is exactly the right discipline. It is simply not applied to the second overlap.
Two further gaps follow from the same blind spot. The AIR does not identify project developers, certifiers or CRVE generators among the affected parties; across 124 pages the words desenvolvedor and certificador never appear. And double counting, which the AIR raises when reviewing New Zealand, is absent from all six dimensions of its risk analysis, although avoiding it is a statutory objective under article 25.
What we asked for
Six recommendations, each drafted in Portuguese for direct adoption. None requires primary legislation, additional expenditure, or any change to the staging decision. Five of the six are set out below.
The word "removals" is dropped in three places, including the clause that scopes the annual report.
Restore "e remoções" so the Ordinance matches arts. 29 and 32 of the Law.
The monitoring plan does not record carbon projects that overlap the installation.
Require the operator to declare overlapping projects and the election under art. 1º, §4º.
Minimum content of the later act is deferred entirely, with no floor for removals.
Set a floor: quantification, permanence and reversal, and an attribution rule.
No rule fixes the MRV boundary where a source sits in two systems at once.
Require the boundary to be stated expressly, as the AIR already does for cogeneration.
No determinate start date, so the 120 day notice period cannot be calculated.
Fix A1 to 1 January of the stage year.
The sixth asks that the accreditation basis for conformity assessment be stated, with mutual recognition where project-level verification is equivalent in scope. The AIR identifies INMETRO and records a request to structure accreditation in advance. With Stage 1 beginning in 2027, that work has to start now.
Why this is worth the effort
Every gap above is a coordination gap. None requires Congress, new money, or a change of political direction. Each requires an institution to write down something it has already concluded, which is an unusually cheap set of fixes for an unusually large prize.
Brazil has legislated faster than almost any comparable jurisdiction. The risk is not ambition; it is that the pieces are drafted separately and never joined. MRV is where the joining either happens or does not, because it is the layer everything else is calculated from. A boundary rule written into the monitoring plan template in 2026 costs a clause. The same rule written in 2031, after the first allocation plan has been built on the data, costs a re-baselining.
It is a privilege to contribute to this work as an Irish national resident in Brazil, in a market that will shape how carbon is accounted for well beyond this country's borders. The consultation closed on 28 August 2026 and the final Portaria is expected before the end of the year.
Filed to Consulta Pública nº 1/2026 on 26 August 2026. Sources listed in the appendix below.
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Book a callAppendix: sources
- Lei nº 15.042, de 11 de dezembro de 2024 (SBCE), arts. 1º, 2º, 25, 29, 30, 31, 32 and 44.
- Minuta de Portaria SEMC/MF, Consulta Pública nº 1/2026, with Annexes I and II.
- Relatório de Análise de Impacto Regulatório nº 001-SEMC, 28 July 2026, 124 pages.
- Plataforma Brasil Participativo, processo obrigacoesmrvsbce. Consultation open 28 July to 28 August 2026.
This article is published by NorthStar ESG Advisory for general information and discussion only. It is not legal, regulatory, financial, investment, accounting or tax advice, and it should not be relied on as the basis for any transaction, filing, contract or investment decision. Reading it creates no advisory relationship.
The analysis reflects the consultation documents as at 26 August 2026. The instruments described are in draft and may change materially or be withdrawn. Advice on Brazilian law should be taken from counsel qualified in the jurisdiction. The author holds advisory and executive roles in the Brazilian carbon market; the views expressed are his own and are not made on behalf of any client, employer or counterparty.