en.Wedoany.com Reported - Brazilian agribusiness has the potential to turn part of its decarbonization potential into a revenue source worth billions of reais, provided the federal government advances regulation allowing international carbon credit trading under the Paris Agreement framework. This conclusion comes from a study conducted by consulting firm Carbonn Nature in partnership with Instituto Equilíbrio and the Agribusiness Research Institute (IEAg), affiliated with the Brazilian Agribusiness Association (Abag).
The full study is scheduled to be released on August 6 at the Agriculture and Food Systems Forum during São Paulo Climate Week. The study estimates that between 2025 and 2035, Brazil's agricultural sector could generate 314.3 million carbon credits under projects compliant with Article 6 rules of the Paris Agreement, with the majority coming from degraded land restoration projects.
Even releasing only a portion of these credits could generate substantial income for rural producers and agricultural companies. The study assumes the authorized sale of approximately 4% of available carbon credits, equivalent to around 15.7 million tonnes of CO2 equivalent, traded through Internationally Transferred Mitigation Outcomes (ITMOs) in bilateral negotiations between countries, with transaction values reaching R$2.4 billion. Each ITMO is equivalent to one tonne of CO2 equivalent reduced or removed from the atmosphere and can be transferred to another country to help meet its national climate targets.
If these carbon credits are used for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the revenue potential rises to R$3.5 billion. Starting next year, airlines participating in CORSIA will be required to purchase carbon credits to offset their CO2 emissions, which could serve as a significant driver.
Natascha Trennepohl, the study's lead researcher and partner at Carbonn Nature, said the survey demonstrates that Brazil can leverage international carbon market opportunities without compromising its own climate goals. In an interview with AgFeed, she said that with consistent and strategic regulation, Brazil can connect to international markets. According to her, the biggest obstacle currently is not the sector's ability to generate carbon credits, nor international demand, but rather the lack of clear rules authorizing commercialization. The federal government recently launched a public consultation to assess the feasibility of ITMO contract operations. She noted that regulatory uncertainty makes it difficult to attract investment—when companies cannot confirm whether carbon credits can be traded on international markets, investing in carbon projects becomes a long-term endeavor.
The study analyzed different scenarios for carbon credit authorization and concluded that a gradual strategy could generate billions of reais in revenue without significantly impacting Brazil's Nationally Determined Contribution (NDC). Brazil's NDC under the Paris Agreement commits to reducing net emissions to between 850 million and 1.05 billion tonnes of CO2 equivalent by 2035. Carbon credits classified as ITMOs cannot be used to meet Brazil's NDC—once an ITMO is sold, the emission reductions it contains are no longer counted toward Brazil's CO2 inventory. Trennepohl said there is no need to release all carbon credits; a small authorization could generate billions of reais while keeping the impact on the NDC manageable.
She assessed that countries such as Singapore and Switzerland would be potential buyers of ITMO carbon credits, while CORSIA demand would come from airlines needing to offset their emissions. The average price of carbon credits traded on the ITMO market could reach US$30 per tonne, while carbon credits for CORSIA could fetch around US$45 per tonne.
Degraded land restoration accounts for nearly all of the carbon credit generation potential identified in the study. Of the projected 314.3 million carbon credits by 2035, 312.1 million could come from projects restoring degraded pastures and improving agricultural land management. Brazil has approximately 160 million hectares of pastureland, of which 90 million to 110 million hectares show some degree of degradation. Beyond environmental benefits, selling carbon credits could provide financing for pastureland conversion. Trennepohl stated that the carbon market is not merely a compensation mechanism—when applied to pasture restoration, it becomes a direct source of capital funding improvements in land productivity, serving as a channel for climate finance to reach rural producers' pockets.
The researchers analyzed only Brazilian projects registered with international certification body Verra and compliant with Article 6 rules of the Paris Agreement, confirming two methodologies already in use: one focused on improving agricultural land management, including practices such as restoring degraded land; and another involving methane emission reductions in livestock manure management. Natascha Trennepohl said that considering only projects already registered or at an advanced certification stage makes the study more conservative and grounded in reality. She said the study did not make projections for technologies not yet certified in Brazil.
She emphasized that these figures represent economic potential rather than guaranteed revenue. Actual commercialization depends on Brazilian regulation, the signing of bilateral agreements, and the presence of international buyers. "Brazil has already completed the hardest part, which is proving it has the scale, methodologies, and environmental integrity. What's missing now is removing regulatory barriers to turn this potential into investment, projects, and income for rural producers," she said.
