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Provisional Measure Paves Way For Development Of Carbon Credit Projects And Other Environmental Services Through Concessions Of Conservation Units – Environmental Law

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On December 27, the Brazilian Presidency issued Provisional
Measure No. 1,151/2022, which, among other provisions, amended Laws
No. 11,284/2006 (Public Forests Management Act) and 11,516/2007
(ICMBio Creation Act) to enable the development of carbon credit
projects and other environmental services in conservation units,
through concessions.

Preexisting Regulatory Framework

In general, the preexisting regulatory framework made it
impossible to develop carbon credit projects through concessions in
conservation units. The Public Forests Management Act prohibited
the granting of rights to market credits for avoided deforestation
of natural forests, making it impossible to develop REDD+ projects
in forest concessions. In addition, the ICMBio Creation Act’s
only clear provisions on the concession of conservation units were
provisions for tourism purposes.

Changes with the New Provisional Measure

In this context, and in line with the federal government’s
recent initiatives to promote carbon credit markets in Brazil, the
new Provisional Measure not only revokes the previously existing
prohibition in the Public Forests Management Act but also
introduces provisions, both in that law and in the ICMBio Creation
Act, stating that the concession of conservation units may be used
for the development of carbon credit projects and other
environmental services.

Therefore, the Public Forests Management Act now provides that
forest concessions can contemplate the exploitation of non-logging
forest products and services, including projects for the
conservation of native vegetation and avoided deforestation (REDD+)
and for afforestation, reforestation and revegetation (ARR), among
others. The ICMBio Creation Act, in turn, now provides that the
concession of services, areas or facilities of conservation units
may also include the right to develop and market carbon credits and
other environmental services.

In addition to those changes, the Provisional Measure also
introduces adjustments to the legislation dealing with
environmental licensing of forest concessions, rules for the
respective bidding, the classification of certain environmental
assets as financial assets and their accounting, among others.


The Provisional Measure came into force on December 27, the date
of its publication, and, in 2023, it will go through relevant
legislative procedures for its eventual conversion into law.

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© Copyright 2020. Tauil & Chequer Advogados, a
Brazilian law partnership with which Mayer Brown is associated. All
rights reserved.

This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein.

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