RIO — State and municipal governments have sought to anticipate the possibility of regulating the carbon market, which is being processed in the National Congress. Rio de Janeiro is the one that has been ahead of itself. Responsible for the production of 83% of all oil produced in Brazil and still heavily dependent on the collection of royalties, the carbon market can become a new source of income for the state.

Today, there would be a stock of 73 million tons of CO2, equivalent to R$ 25 billion, according to the state government. The state maintains about 30% of native forest, in addition to areas that have been reforested over time, such as the Tijuca Forest, which occupies 3,900 hectares. Forest preservation may be relevant for the generation of carbon credits.

— States and municipalities can be strong allies of the Union so that we can beat the targets stipulated (in agreements) — says attorney Roberta Danelon, environmental law partner at Machado Meyer.

In recent months, the state, rio's city hall and the private sector have been working with different initiatives to leverage a regional market for carbon credits and environmental assets. The negotiations begin to generate concrete results. By the end of the month, the city of Rio will host the world's first micromobility carbon credit auction.

ISS reduction by 2030

Held in partnership between Tembici, ZCO2 and BlockC, the auction should put into dispute 1,500 carbon credits generated by the operations of Tembici, a company that operates Itaú's shared bicycle system.

The auction is an offshoot of a project launched by the city of Rio in 2021, Bolsa Verde. The project foresees the creation of a voluntary carbon market in the city.

— Rio has a regulatory framework that already talks about this theme and this enhances the city's promotion of this ecosystem. We want to be in the discussion for the green economy in Brazil, Latin America and at the global level - says the former Secretary of Economic Development and Innovation of the city Chicão Bulhões, who recently left office but participated in the preparation of the project.

The municipality intends to reduce the ISS rate from 5% to 2% for carbon credit transaction platforms and activities that certify and register credit projects. The new rates, which still depend on approval in the Legislature, would be temporary, in force until 2030.

Favorable conditions in the city, with a strong presence of oil and gas companies, have caused AirCarbon Exchange, a carbon credits marketplace based in Singapore, to decide to settle in Rio.

The Brazilian operation, which began operating in the city recently, maintains a partnership with BlockC, which works with greenhouse gas management.

" We decided to settle in the city because Rio concentrates sectors that have more difficulty in reducing greenhouse gases," says Carlos Martins, director of BlockC and AirCarbon Brasil.

For The Sustainable Finance Manager of the Consulting WayCarbon, Laura Albuquerque, the development of the carbon market still depends on the regulation of the project in Congress and the parameters that Brazil must adopt.

— The carbon market is only standing if we understand what the goal the country wants to set for the sectors that must be within the market. Brazil can establish an initial market in São Paulo, then expand to Rio de Janeiro and other states, but depends on ambition, what is desired with this market.

Source: O Globo