Hello, welcome to the sixth article of the LuxCS in Focus series, which will be released until May 1st. In this series we aim to present or deepen some concepts, dispel misunderstandings and answer general questions about the carbon market. In the previous articles we dealt with important topics to understand what carbon credits are and how they benefit society, the economy and ecosystems.
This week, we will give more focus to the carbon market in Brazil, a country with huge potential to reduce its greenhouse gas (GHG) emissions and generate income and sustainable development for its populations. We will show the needs and specificities of the Brazilian carbon market and why it requires methodologies that can meet the characteristics of the various biomes, the demands of the local communities and the challenges of social inclusion.
We will also dedicate an article to Lux Carbon Standard itself - LuxCS, where we intend to make our mission, contribution and ESG policies clearer. And, finally, in the last episode of our series, we will focus on portraying the profile of the professionals who most directly contribute to the execution of our projects, the project developers, who are responsible for ensuring the quality, transparency and credibility of the carbon credits issued by Lux Carbon Standard. We hope you continue to follow our series, and that you can learn more about this promising and important market for the future of the planet.
In Brazil, so far, the only carbon market that already has regulation is that of Biofuels, the Cbios [1]. This is a national initiative and so far not recognized in other countries, operating only in the Brazilian market. Although Brazil is adherent to the Kyoto Protocol and the Paris Agreement, which involves countries, states and sectors that have mandatory targets for reducing greenhouse gas emissions, the legislation for the Regulated Carbon Market has not yet been approved in Brazilian soil.
Our focus here is the Voluntary Carbon Market (VCM), which is in operation and moves billions of dollars in Brazil and in the world. Brazil is a country with great potential for the carbon credit market, as it has several ecosystems that provide essential environmental services, such as biodiversity conservation, climate regulation, water production and soil maintenance. Among these ecosystems, the Amazon, the Cerrado, the Atlantic Forest, the Pantanal, the Caatinga and the Pampas stand out.
For a carbon project to be certified, it must meet some fundamental criteria, which ensure that the avoided or removed emissions are real, measurable, permanent and additional. One of these criteria is the regular documentation of the properties where the project will be carried out, which proves the unequivocal possession of the land and the legitimacy of the owner to commercialize the carbon credits generated. This requirement aims to avoid land conflicts, fraud, project overlap or double counting of credits, and respect the rights of the communities of indigenous peoples, quilombolas and riverside dwellers who live in these areas.
Despite the existence of foreign certifiers operating in the certification of carbon credits in Brazil, their methodologies had not been designed for the Brazilian reality, so that only large extensions of land, mainly in the Amazon, could participate in these processes. Within one of the best known methodologies applied in Brazil, REDD+ can only be applied in areas from 500 hectares, which excludes from participation in the carbon market, most of the landowners in the country. Within this perspective, even if owners of smaller areas join together to start a project, they have to deal with other limitations, the high cost of these projects and the exclusion of several biomes.
Faced with this context, we saw the opportunity to develop a certification standard that could respond to the needs and challenges of the carbon credit market in Brazil, with a focus on sustainability and social inclusion. This is the vision of Lux Carbon Standard, where the methodologies are planned to cover all Brazilian biomes and whose proposal is to operate on properties from 5 hectares, expanding the opportunities for small and large areas, which were previously ignored by the existing certifiers.
Another possibility of the Voluntary Carbon Market in Brazil is the certification through reduction projects, from industrial, logistical and renewable energy sources, such as solar plants, for example. These projects can generate carbon credits that represent the reduction of greenhouse gas (GHG) emissions in relation to a reference scenario, that is, what would happen if these activities were not implemented. This is important to finance the transition to a low carbon economy, encouraging the adoption of cleaner and more efficient technologies, and reducing the dependence on fossil fuels.
In addition, this compensation mechanism allows companies that cannot yet completely eliminate their emissions to contribute to projects that reduce or remove GHG from the atmosphere in other parts of the world, thus offsetting their environmental impact and demonstrating their commitment to sustainability.
On this topic, it is relevant to mention one of the differentials of LuxCS, the Uncarbonize program, which aims not only to certify and offset GHG emissions from companies and institutions, but also to promote the decarbonization of an entire production chain. The Uncarbonize program analyzes the production and transportation processes of companies and institutions, identifying the sources of emission and the opportunities for improvement. Based on this diagnosis, LuxCS prepares an action plan to reduce emissions at each stage of the business processes, implementing measures such as the substitution of fossil fuels by renewable energies, logistic optimization, energy efficiency, recycling and reuse of materials, among others.
The Uncarbonize program also monitors and monitors the results of these actions, verifying the impact on the reduction of emissions and the economy of resources, benefiting not only the environment, but also the competitiveness and sustainability of the partner companies and institutions, which can position themselves as leaders in the transition to a low carbon economy.
Thus, we can conclude that the Voluntary Carbon Market in Brazil has opportunities both for landowners who want to have a sustainable source of income, and for companies and institutions that want to contribute to the mitigation of climate change, while improving their efficiency, reputation and competitiveness.
LuxCS is a company specialized in this market, offering customized and innovative solutions to certify carbon credits, as well as to offset and reduce GHG emissions from its clients. If you want to be part of this market, contact us on our website.
[1] Cbios is a decarbonization credit that was created by the National Biofuels Policy (RenovaBio), a federal law that aims to stimulate the production and consumption of biofuels in Brazil. Cbios is issued by producers or importers of biofuels that prove the reduction of greenhouse gas emissions in their production chain, in relation to fossil fuels.
Comentarios