Author: admin

^{Author Marcos Siqueira-Neto, Specialist in Agriculture Carbon Projects}

Today (12/05) we celebrate World Soil Day, on this date we must remember the profound importance of this resource for life on Earth. Soil is essential for all forms of life; it is the true foundation of the planet. It supports vast forests or small urban gardens; in different environments and landscapes it is essential for the ecosystems and human well-being.

 

 

Soil: More Than Just a Surface Layer

Although “land” and “soil” are often used as synonyms, they have distinct meanings: According to the Food and Agriculture Organization of the United Nations (FAO)[1], land represents the territory, the solid mass or the physical portion that makes up the planet’s crust, with its rocks, minerals and other layers that physically support us.

Soil is much more than a surface, it is an active layer, result of natural processes of rocks transformation, called weathering. This process is influenced by climate, relief, source material (elements and minerals in rocks), organisms’ activity and time. The complex combination of minerals, organic matter, air, water and living organisms gives characteristics that differentiate soil types. Soil can also take on different meanings, depending on perspective:

• Geologist: soil is the product of millions of years of geological processes of decomposition and sedimentation. It represents the layer resulting from the physical, chemical and biological interaction between rocks, climate and organisms, which connects the Earth’s crust with life on the surface.[2].

• Agronomist: soil is a work tool, a living and productive resource, where seeds become crops, and harvests generate food and wealth. It provides nutrients, water and support for plant cultivation, and which must be conserved to ensure the sustainability of agricultural production.
• Ecologist: soil is much more than a layer of mineral and organic material; it is an ecosystem. A matrix that houses enormous biodiversity, and a regulator of ecological processes that recycles nutrients, stores water and filters contaminants, in addition to contributing to climate regulation, especially through carbon sequestration.
• Artist: soil is a sacred tissue, the Earth’s womb, a place of mystery and fertility. It is the guardian of stories, where seeds flourish, giving rise to man himself, a symbol of growth, belonging and rebirth.

 

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Brazilian Soil Classes

Brazil has a vast territorial extension and has a great diversity of soil. Among the main Soil Classes, we can highlight:

• Latosols cover about 39% of the territory, with extensive areas in the Amazon and Cerrado. These are deep, well-drained soils, mostly with low natural fertility, and occur in areas of slight slope, in flat to undulating relief. They are highly suitable for agricultural use, are favorable to mechanization, and can be highly productive with adequate management.
• Argisols occupy about 24% of the territory and are common in the South and Southeast regions. These soils have a clayey texture in the subsurface and a medium texture on the surface. When this textural gradient is accentuated, this soil becomes more susceptible to erosion, requiring conservationist management practices.
• Neossolos, which are found in 13% of the territory, are poorly developed soils, with a thin surface layer that is conditioned by their organic matter content. These soils are considered to have low agricultural suitability, as they have low water and nutrient retention. Management practices that maintain or increase the organic matter content can reduce this problem.

Other classes with lower occurrence include: Plinthosols[6] (6% of the Brazilian territory); Gleissolos[7] (4%); Luvisols[8] (3%); Cambisols[9] (2,5%); Spodosols[10] (2%); Planossolos[11] (2%); Vertisols[12] (2%); Nitosols[13] (1,5%); Chernosols[14] (0,5%); and Organosols[15] (dispersed occurrence).

Each soil class has characteristics that influence its use and management. In Brazil, zoning and land use suitability have their own legislation, which aims to align urban and rural development with environmental preservation and sustainability, ensuring conscious use of ecosystem services and the carrying capacity of each soil type.

 

^{Soil Map of Brazil
Source: https://www.embrapa.br/tema-solos-brasileiros/solos-do-brasil}

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^{Agricultural Use Potential Map
Source: https://www.aen.pr.gov.br/sites/default/arquivos_restritos/files/documento/2022-12/0512mapa.pdf}

 

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Ecosystem Services and Land Use

Soil is one of the main providers of ecosystem services, which are fundamental to human health and well-being. Among many, we can highlight soil as the support for the establishment of buildings and agricultural crops; the biogeochemical cycle of nutrients and carbon, the production of food, materials and bioenergy; source of minerals; purification and regulation of the water cycle; climate regulation; habitat for a vast diversity of organisms; and its value as landscape, recreation, cultural and spiritual resources. Given so many ecosystem services, it is correct to state that soil is a valuable economic resource.

Agriculture is a sector of great economic importance, generating jobs, income and exports. Thus, the appropriate use of soil through sustainable management practices ensures soil health, and its conservation generates economic value. On the other hand, intensive use without care causes the degradation of physical, chemical and biological attributes, leading to soil depletion and, consequently, the loss of productive capacity. Therefore, it is necessary to find a balance so that productive activity contributes to the economy without compromising soil health.

In addition, soil stores carbon in the form of organic matter, reducing carbon emissions for the atmosphere. When the soil is well managed, its organic matter is preserved and mitigates climate change. However, inadequate agricultural practices and deforestation can release stored carbon back into the atmosphere, contributing to global warming.

 

^{Soil Ecosystem Services
Source: https://openknowledge.fao.org/server/api/core/bitstreams/eaecf793-d0cb-4ac4-a4fc-b98dbe0065f0/content}

 

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Suitable Soil Management is a Nature-Based Solution

Soil is the largest terrestrial carbon reservoir, storing three times more carbon than the atmosphere and vegetation combined[16]. As such, it plays a central role in mitigating climate change and its proper management is considered a powerful Nature-Based Solution (NBS).

The conscious use of this resource as an NBS is associated with the adoption of management practices that aim to improve soil health[17], with an increase in organic matter, ensuring the sustainability of agricultural production. The adoption of conservation management practices that reduce surface layer movement and include permanent soil cover maximize carbon sequestration and increase its resilience.[18].

In this sense, we recommend management techniques such as no-tillage, crop rotation, organic/green fertilizer, and the adoption of integrated systems (e.g., crop-livestock-forestry) and/or agroforestry that enrich soil, promote carbon sequestration, and reduce atmospheric CO₂ while also favoring agricultural production[19]. In addition, the restoration of degraded soils, especially in pastures, is also a powerful strategy for capturing carbon, while restoring biodiversity and productivity[20], and with an indirect “forest-saving” effect.

Among the challenges we see is that the lack of standardized methodologies and the high cost of measuring and monitoring carbon in the soil make it difficult to implement initiatives such as agricultural carbon credits. Even so, new technologies for soil analysis are being developed to facilitate this process. We believe that a regulatory framework and adequate incentives, such as carbon credits and payments for environmental services, can encourage rural producers to promote soil as a strategic ally in climate mitigation, in addition to promoting food and economic security.[21].

 

^{Soil aggregate filled with organic material
Source: https://brasil.mapbiomas.org/wp-content/uploads/sites/4/2023/08/MapBiomas_Solo_JUNHO_2023_21.06_OK_Alta__1_.pdf}

 

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Final Considerations

Soil conservation is essential for food security and for maintaining ecosystems. Brazil, with its vast expanse and diversity of soils, has a strategic role in promoting sustainable agricultural practices, also taking advantage of the carbon credit market and payments for environmental services to offset conservation costs.
Ambipar Environment develops NBS projects that advocate the conscious use of this valuable resource through the adoption of sustainable management practices that aim to improve soil health and generate carbon credits. To this end, we use the best certification methodologies and standards available on the market, which ensure the generation of positive impacts on the climate, society and the environment. Therefore, on this World Soil Day it is worth reflecting on the use and conservation of our soils, and we invite everyone to value and protect this vital resource for our future and that of the planet.

 

^{Map promotes more sustainable soil with programs for land management
Source: https://www.gov.br/agricultura/pt-br/assuntos/noticias/mapa-impulsiona-solo-mais-sustentavel-com-programas-para-o-manejo-da-terra}

 

 

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Do you have any questions or want to discuss the topic further?

Our team has highly experienced technical professionals
who are fully available to provide additional explanations.

 

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^{[1] FAO (2021). The State of the World’s Land and Water Resources for Food and Agriculture – Systems at breaking point. Synthesis report 2021. Rome. DOI: 10.4060/cb7654en.
Birkeland, P.W. (1999). Soils and Geomorphology. New York: Oxford University Press. p. 430.
[3] Brady, N.C., & Weil, R.R. (2010). Elements of the Nature and Properties of Soils. Pearson. 614p.
[4] Wall, D. H., et al. [eds.] (2012). Soil Ecology and Ecosystem Services. New York: Oxford University Press, p. 424. DOI:10.1093/acprof:oso/9780199575923.001.0001.
[5] Plinthosols are found in flat and gently undulating relief, in depressed areas, alluvial plains, and situations involving slow water drainage from the soil. They are characterized by imperfect drainage and cycles of iron reduction and oxidation with the formation of plinthite and/or petroplinthite (concretion). These soils are poor in organic matter, frequently acidic, and have low natural fertility.
[6] Gleisosols are found in areas with drainage restrictions, such as near watercourses, floodplains, and lowlands. They are formed by clayey or very clayey material in a water-saturated environment, poorly drained (hydromorphic).
[7] Luvissols are found in the Northeast, distributed in the semi-arid zone. These are shallow soils with high natural fertility, characterized by a significant increase in clay content in subsurface horizons.
[8] Cambissols have wide distribution across all biomes. These are moderately developed soils, shallow, with wide variation in chemical and granulometric composition.
[9] Spodosols are typical of coastal zones, sandy, with organic matter deposits at depth, very acidic, and poor in nutrients.
[10] Planosols have a well-developed surface layer and a compacted, poorly drained subsurface layer.
[11] Vertisols are predominant in the northeastern semi-arid region. These clayey soils have a high water retention capacity but are prone to cracking in dry periods.
[12] Nitossols are deep soils with clayey or very clayey texture, well-drained, moderately acidic, and of variable natural fertility.
[13] Chernozems are highly fertile, characterized by a thick, dark surface layer with high organic matter content.
[14] Organosols are formed by high organic matter content, derived from the deposition and accumulation of plant residues, with or without mixing of mineral materials. They occur very sporadically, not constituting representative areas in Brazil.
[15] EMBRAPA. (2018). Sistema Brasileiro de Classificação de Solos − Brasília, DF: Embrapa, 2018. 356 p.
[16] IPCC (2019). Climate Change and Land: An IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial Ecosystems. Intergovernmental Panel on Climate Change.
[17] Canisares, L.P., et al. (2024). Enhancing Soil Health in Brazilian Agroecosystems: Indicators and Management Practices. In: Ogwu, M.C., et al. [eds] Sustainable Soil Systems in Global South. Singapore: Springer, p. 768. DOI: 10.1007/978-981-97-5276-8_23.
[18] Siqueira-Neto M., et al. (2020). Impacts of Land Use and Cropland Management on Soil Organic Matter and Greenhouse Gas Emissions in the Brazilian Cerrado. Eur. J. Soil Sci. p. 1–16. DOI:10.1111/ejss.13059.
[19] Lal, R. (2004). Soil Carbon Sequestration Impacts on Global Climate Change and Food Security. Science, 304(5677), 1623–1627. DOI: 10.1126/science.1097396.
[20] UNEP (2019). The Global Environmental Outlook: GEO-6. Healthy Planet, Healthy People. Nairobi. DOI: 10.1017/9781108627146.}

 

^{Authors Marcio Sales, Geostatistics Specialist and Caio Gallego, Operations Intelligence Manager, at Ambipar Environment}

Introduction

The high level of strictness required in meeting technical standards, such as additionality and baseline determination, is crucial for the voluntary carbon market. This strictness ensures that certified projects are genuinely contributing to reducing Greenhouse Gas (GHG) emissions and that these reductions are being calculated robustly, feasibly, and conservatively.

Over the past few years, REDD+ (Reducing Emissions from Deforestation and Degradation) projects, particularly those focused on Avoided Unplanned Deforestation (AUD), have been the subject of substantial criticism. The primary concerns revolve around additionality and the quantification of Reduced GHG Emissions, with claims that baseline emissions in most projects are overestimated, artificially inflating the effectiveness of their deforestation reduction actions.

Criticism intensified in January 2023, when the British journal “The Guardian” published an article describing these projects as practically “useless” and, worse, suggesting that they might even increase emissions¹. The article had a significant impact, causing distrust and intensifying public and market scrutiny of this category of projects. Consequently, there was a decrease in demand and prices for generated credits, along with a negative impact on supply, reducing the certification of new projects and the flow of credit generation.

In response to these criticisms, Verra, the leading certifying organization for REDD+ projects worldwide, initiated an in-depth review of the VCS (Verified Carbon Standard) program’s methodological framework. The update to its rules and methods for registering REDD+ projects aims to eliminate methodological distortions and increase the transparency and credibility of the projects. Verra’s new methodology, VM0048, directly addresses many of these criticisms, promising greater accuracy and alignment in Reduced Emissions accounting.

In this article, we will explore in detail the harsh criticisms directed at REDD+ AUD projects, examining the validity of the arguments and the relevance of the concerns raised. Additionally, we will analyze the changes proposed by Verra’s new methodology and how they aim to address the issues identified.

 

 

Existing Methodologies

Essentially, credits from a REDD+ project are determined by comparing emissions resulting from observed deforestation within the project areas to an estimate of what would be deforested if the project had not been implemented. This hypothetical deforestation estimate, therefore, represents the project’s baseline.

Verra, through its VCS standard, has developed different methodologies for REDD+ application, each establishing guidelines for baseline determination. Although they vary, these methodologies are similar in how they determine baselines. Future deforestation in the absence of a project is estimated using historical data, assuming that future annual deforestation rates will either fluctuate around the historical average or follow a trend (increasing or decreasing) observed over the past 10 years in a reference region that includes the project.

The primary weakness in this process lies in the fact that these methodologies require project developers to construct their own baselines. Criteria are provided to guide this process, which must later be audited by a third party. However, questions have arisen about the variations—and in some cases, overestimations—present in baselines across different projects due to the flexibility offered by the methodologies. According to studies, such methodological weaknesses affect additionality and the quality of reduced emissions quantification in projects.

 

 

 

 

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Weak Additionality

The 2023 Guardian article was based on the findings of two independent scientific studies, one published in the Proceedings of the National Academy of Sciences from a plurinational research group, and the other in Conservation Biology, by researchers from the University of Cambridge, UK. The first study² analyzed 12 Verra-validated projects in the Brazilian Amazon, comparing their emission reductions calculated using Verra-approved VCS methodologies with an estimate based on an alternative approach called the “Synthetic Control Method”. In this method³, which differs completely from Verra’s methodologies, reductions are estimated by comparing a project’s emissions to an artificial counterfactual metric derived from data in areas with variables similar to those of the analyzed project (Figure 1).

 

^{Figure 1: *Figure 1: Emissions reduction estimation scheme using the synthetic control method.
Regions A and B represent the historical period and the post-project initiation period, respectively. SCU: Synthetic Control Unit*}

 

 

 

In summary, this method aims to create a sort of replica (Synthetic Control Unit – SCU) of the project area, but without emissions reduction activities, to represent the baseline scenario. The method assumes that the deforestation rates of the constructed synthetic unit represent the project rates after its initiation.

In the cited study, the selected control units exhibited deforestation levels below the baseline values reported by the projects, leading the authors to conclude that almost all projects failed to deliver the claimed emission reductions (Figure 2). At the time, this study received several criticisms, particularly from project developers, concerning flaws in the applied approach. Key criticisms included the selection of areas forming the synthetic unit, the representativeness of the target project universe, among others^{4 5 6 7 8}.

 

^{Figure 2: Result from the West et al. study. Blue points indicate estimated emissions reductions/increases
in non-project (placebo/synthetic) areas compared to project observations (red line) using the same method.}

 

The Cambridge study⁹, on the other hand, used a more representative selection of Verra-registered projects but also found a lower reduction in emissions compared to reported values. However, the study showed that the projects exhibited positive additionality, unlike the first study. The authors used the “matching” or “statistical matching” method, another approach for evaluating the impact of interventions, similar to the synthetic control method.

The difference between the two methods is that, while the latter evaluates each project individually, matching can be applied to a group of projects, allowing a broader assessment of intervention effects. The method selects one or more control areas with similar characteristics for each project in the intervention group, forming two “matched” groups. The impact of the projects on CO2 emissions is calculated as the difference between the average emissions in the two groups for each period following the start of each project. This second study indicated that the analyzed projects had additionality of approximately 47%, partially diverging from the first study, but still below reported values. Similar to SCU, matching shares the same assumption that control group areas continue to represent the project characteristics post-initiation.

Finally, it is worth noting that, unlike VCS methodologies, emission reductions calculated by SCU or matching methods are only calculated ex-post. This means that these procedures do not, at least directly, allow for ex-ante predictions of project emissions reductions and, consequently, its potential credit generation. Verra’s methodologies, on the other hand, project future deforestation based on recent historical patterns, allowing for feasibility analyses prior to project implementation, which is crucial for any endeavor requiring planning and upfront investment. Despite the differences and limitations of the two studies, both pointed to potential distortions that needed to be further analyzed and resolved if confirmed.

 

 

 

 

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Finding the root of the problem

Regarding Verra’s VCS REDD+ methodologies, a fundamental aspect for this discussion is worth highlighting. It is known among project developers that, before consolidation, different methodologies could be applied to the same project. Thus, baseline estimates showed high sensitivity depending on the chosen methodology and the parameters and procedures each methodology allowed.

In 2024, a study titled “Methodological Issues with Deforestation Baselines Compromise the Integrity of Carbon Offsets from REDD+”¹⁰, with participation of some researchers of the plurinational group, went straight to the root cause of these distortions and illustrated the issues more assertively. While this recent study’s representativeness is insufficient to generalize the results, it is enough to demonstrate that the flexibility allowed in methodology choice and its parameters produces significant variation in estimated emission reductions. Since the choice of methodology and application of parameters has always been at the project developer’s discretion, this flexibility could (intentionally or not) facilitate the generation of baseline overestimations. As baseline distortions resulting from the variety and flexibility of rules did not necessarily violate methodological standards, auditing and certification standards could not disapprove. This methodological inconsistency has long-enabled distortions, such as similar projects within the same region having vastly different baselines.

 

 

 

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Verra’s New REDD+ Methodology

As discussed, The Guardian article and the studies mentioned in the previous section significantly impacted the carbon credit market, raising serious concerns about the integrity of generated credits. In response, Verra began a detailed review of its methodological framework in 2023. All previous methodologies are being replaced by a new integrated methodology, VM0048, which will apply to all REDD+ approaches.

This new methodology is expected to ensure greater integrity of credits generated by REDD+ projects and restore market confidence. Adopting a more robust and transparent approach aims to ensure that carbon credits more accurately reflect the climate benefits generated, promoting greater credibility and confidence among stakeholders.

The new methodology does not adhere to the methods proposed by the critics’ studies, which have weaknesses as previously discussed. Notwithstanding, it introduces significant advancements as outlined below (Figure 3):

 

^{Figura 3: Principais mudanças com a metodologia VM0048}

 

These changes largely address previously highlighted issues. Primarily, they eliminate the flexibility allowed by previous methodologies, as activity data will be generated in advance and allocated to projects directly by Verra, as a new service provided by the Standard. Thus, estimates will be calculated using a universal method, ensuring consistency in emission reduction accounting and carbon credit generation at the jurisdictional level, regardless of the quantities allocated to projects.

Another improvement is the use of historical deforestation rate estimates based on statistical methods. Previous methodologies allowed direct use of land cover classification data to calculate deforested area during the historical period, a procedure known to generate biased estimates¹¹. Fortunately, this error can be reduced using original probabilities¹² or probabilistic sampling estimates¹³, which is the solution employed in the new methodology.

The new method also aims to increase the conservatism of future emission projections, limiting them to historical deforestation averages over the last 10 years in each jurisdiction (Figure 4). Some previous methodologies allowed projections based on observed trends of increasing or decreasing deforestation rates. However, this could overestimate future deforestation if, for example, a previously observed upward trend did not continue in the future. This measure is reinforced by reducing the baseline validity period from 10 to 6 years, requiring more frequent adjustments to activity data. This helps to avoid overestimations (or underestimations) at the jurisdictional level due to shifts in deforestation patterns between validation periods.

^{Figure 4: Example illustrating a case where a linear model fitted on historical data would overestimate future deforestation
due to a break in the past trend. Data (points) correspond to annual deforestation rate estimates from PRODES for the State of Acre. Historical (blue) and forecast (orange)
periods were arbitrarily selected to illustrate the example.}

 

 

 

Another remarking change with the new methodology is that historical deforestation averages for entire jurisdictions are allocated based on a spatial model of deforestation risk, so projects “get” a fraction of their jurisdictions’ activity data based not only in their size but also location in relation to deforestation hotspots. Currently, the allocation model uses only one variable, distance to forest edges, but has acceptable accuracy as this is one of the factors most correlated with the risk of deforestation¹⁴. Over time, this basic model should be enhanced or replaced with more complex and accurate ones but, most importantly, the initial model reduces the chance of overestimating the baselines for the jurisdiction as a whole.

 

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Remaining Challenges

As shown above, the proposed changes in the new methodology are expected to significantly reduce baseline distortions across projects, enabling better evaluation of their additionality and aligning accounting at the jurisdictional level. However, despite ensuring consistency at the jurisdictional scale, the current simplified allocation model may lead to biases at the local scale, sometimes underestimating the additionality of high-deforestation-risk projects or, in other cases, overestimating those in low-risk areas. Moreover, as REDD+ AUD projects are viable only in regions with higher deforestation pressure, this effect may prevent project implementation in certain regions, reducing the conservation potential of the mechanism.

This issue will be mitigated as more sophisticated models are adopted by the methodology. Additionally, the methodology modules addressing unplanned degradation occurrence and Avoided Planned Deforestation (APD) still require further definition.

 

 

 

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Future Perspectives

Despite remaining challenges and necessary adjustments to the new methodology, it represents a significant step forward in addressing the issues. REDD+ projects are certainly useful for reducing GHG emissions, and the enhancement of new methodologies should reinforce their effectiveness with more accurate measures of their additionality. This is expected to restore confidence in these projects and revitalize the market.

It is worth noting that credits from Nature-Based Solutions (NBS) projects remain the most sought-after in the market, with the highest transaction volumes and retirement rates in 2022 and 2023¹⁵. Additionally, REDD+ AUD projects account for approximately 50% of registered REDD+ projects and represent the majority of generated credits.

The preference for projects in this category can be explained by benefits beyond emissions reductions, such as biodiversity conservation and the socioeconomic development of local communities. The REDD+ projects developed by Ambipar Environment contribute to the conservation of 2.5 million hectares of forests, home to dozens of endangered species of fauna and flora, impacting over 130 local communities.

There is a strong outlook for the restoration of the REDD+ market, given its crucial importance for climate change mitigation and biodiversity preservation. These projects, when well-executed, not only contribute to GHG emission reductions but also promote sustainable development in local communities and ecosystem conservation. With the continuous evolution of accounting methodologies and growing global recognition of the urgent need for effective climate actions, the forest conservation-derived carbon market is expected to continue expanding, attracting investments, and contributing to the achievement of global climate goals.

 

 

 

 

 

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Do you have any questions or want to discuss the topic further?
Our team of technical and institutional experts is available to provide additional support and clarifications.

 

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^{[1] Jornal “The Guardian”. “Revealed: more than 90% of rainforest carbon offsets by biggest certifier are worthless, analysis shows.”. Available at: https://www.theguardian.com/environment/2023/jan/18/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe
[2] West, Thales A. P., Jan Börner, Erin O. Sills, e Andreas Kontoleon. 2020. “Overstated Carbon Emission Reductions from Voluntary REDD+ Projects in the Brazilian Amazon”. Proceedings of the National Academy of Sciences 117 (39): 24188–94. https://doi.org/10.1073/pnas.2004334117.
[3] Abadie, Alberto. 2021. “Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects”. Journal of Economic Literature 59 (2): 391–425.
[4] Malan, M., Carmenta, R., Gsottbauer, E., Hofman, P., Kontoleon, A., Swinfield, T., & Voors, M. (2024). Evaluating the impacts of a large-scale voluntary REDD+ project in Sierra Leone. Nature Sustainability, 7(2), 120-129.
[5] Study analysis of “West et al. (2020): Overstated carbon emission reductions from voluntary REDD+ projects in the Brazilian Amazon” available at: https://www.climatepartner.com/en/knowledge/insights/study-analysis-of-west-et-al-2020.
[6] Our analysis of The Guardian’s criticism of Verra. Systemicka Team. Available at: https://systemica.digital/en/nossa-analise-sobre-critica-do-the-guardian-a-verra/
[7] Technical Review of West et al. 2020 and 2023, Guizar-Coutiño 2022, and Coverage in Britain’s Guardian. Verra. Available at: https://verra.org/technical-review-of-west-et-al-2020-and-2023-guizar-coutino-2022-and-coverage-in-britains-guardian/
[8] Carbonext-Response to West at al’s (2020) Study. Available at: https://www.documentcloud.org/documents/20475770-response-to-west-et-al-from-carbonext_8-technical-audience
[9] Guizar-Coutiño, Alejandro, Julia P. G. Jones, Andrew Balmford, Rachel Carmenta, e David A. Coomes. 2022. “A Global Evaluation of the Effectiveness of Voluntary REDD+ Projects at Reducing Deforestation and Degradation in the Moist Tropics”. Conservation Biology 36 (6): e13970.
[10] Stuart, Elizabeth A. 2010. “Matching methods for causal inference: A review and a look forward”. Statistical science : a review journal of the Institute of Mathematical Statistics 25 (1): 1–21. https://doi.org/10.1214/09-STS313.
[11] West, Thales A.P., Barbara Bomfim, e Barbara K. Haya. 2024. “Methodological Issues with Deforestation Baselines Compromise the Integrity of Carbon Offsets from REDD+”. Global Environmental Change 87 (julho):102863. Disponível em https://www.sciencedirect.com/science/article/pii/S0959378024000670
[12] Sales, Marcio H. R., Sytze de Bruin, Carlos Souza, e Martin Herold. 2021. “Land Use and Land Cover Area Estimates From Class Membership Probability of a Random Forest Classification”. IEEE Transactions on Geoscience and Remote Sensing, 1–11. https://doi.org/10.1109/TGRS.2021.3080083.
[13] Sales, Marcio H. R., Sytze de Bruin, Carlos Souza, e Martin Herold. 2021. “Land Use and Land Cover Area Estimates From Class Membership Probability of a Random Forest Classification”. IEEE Transactions on Geoscience and Remote Sensing, 1–11.
[14] Olofsson, Pontus, Giles M. Foody, Martin Herold, Stephen V. Stehman, Curtis E. Woodcock, e Michael A. Wulder. 2014. “Good Practices for Estimating Area and Assessing Accuracy of Land Change”. Remote Sensing of Environment 148 (maio):42–57.
[15] Jaffé, Rodolfo, Samia Nunes, Jorge Filipe Dos Santos, Markus Gastauer, Tereza C. Giannini, Wilson Nascimento Jr, Marcio Sales, Carlos M. Souza, Pedro W. Souza-Filho, e Robert J. Fletcher. 2021. “Forecasting Deforestation in the Brazilian Amazon to Prioritize Conservation Efforts”. Environmental Research Letters 16 (8): 084034. https://doi.org/10.1088/1748-9326/ac146a.
[16] Forest Trends’ Ecosystem Marketplace. 2024. “State of the Voluntary Carbon Market 2024”. Washington DC: Forest Trends Association.}

 

The bill was approved by the National Congress. After implementation, Brazil will have the largest emissions trading system in Latin America.

After years of discussion, Brazil is close to creating its regulated carbon market, a decisive step toward the country’s sustainable development. Ambipar (AMBP3), the leader in environmental management, celebrates the approval of this bill by the National Congress, which will encourage companies and sectors to reduce their emissions, actively contributing to environmental protection and providing rules to enhance the integrity and socio-environmental impact of carbon credits in the Voluntary Market.

According to Plínio Ribeiro, Head of Carbon Solutions at Ambipar Environment, the approval of Bill No. 182/2024 demonstrates the unity of our leaders in creating a favorable regulatory environment.

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“This bill represents an important progress for Brazil to achieve the goals set by the Paris Agreement. At the same time, the interoperability between the Regulated Market, focused on public sector initiatives, and the Voluntary Market, aimed at private initiatives, as outlined in the text, is the solution to address the main source of greenhouse gas (GHG) emissions in Brazil: illegal deforestation,”, said the executive.

 

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Under the proposed regulation, companies that emit more than 10,000 tons of carbon dioxide equivalent (CO2E)¹ per year will be required to establish an emissions monitoring plan and submit periodic reports, while companies emitting more than 25,000 tons of CO2E per year will need to not only report and monitor their emissions but also offset them through emission permits distributed either free of charge or for a fee by the government. It is estimated that around 5,000 companies in Brazil emit more than 25,000 tons of CO2E. Therefore, the Brazilian Regulated Market, when implemented, will become the largest carbon market in Latin America.

Another important aspect of the bill is the establishment of sectoral emission limits.

 

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“One of the most relevant points of the document is setting sectoral caps. The regulator generally starts with the most emission-intensive sectors. This is the great challenge of public policy, where you set this limit (cap). Civil society must be very attentive to ensure these numbers are feasible, but not so high as to negatively impact the competitiveness of these sectors,”, he explains.

 

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The regulatory framework also sets key points to ensure legal security and increase the integrity of the Voluntary Carbon Market in Brazil. It defines clear rules on the ownership and taxation of credits, preventing double counting, and ensuring the rights of traditional communities, landowners, and indigenous peoples. It also includes a public project registry and grants states the freedom to create their own programs, while protecting the right to exclude private areas from public accounting. Lastly, it aligns Brazilian legislation to enable the commercial trading of credits in the global market.

Since the start of the debate on the creation of a regulated carbon market in Brazil, Ambipar has been actively involved, sharing its technical expertise with Parliament, the Federal Government, States, and civil society.

 

 

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“We will continue to work to strengthen this market in Brazil and ensure that the regulation meets the expected needs. By 2030, between 35% and 50% of emission reductions must come exclusively from Nature-Based Solutions. That’s why we are developing projects that promote emission reductions through forest conservation and emission sequestration through reforestation, and we are ready to supply the new Brazilian Regulated Market with carbon credits of high socio-environmental integrity,” Ribeiro concludes.

 

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Plínio Ribeiro
^{Head of Carbon Solutions
Ambipar Environment}

 

 

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Do you have any questions or would you like to discuss the topic further?

Our team has highly experienced technical professionals who are fully available to provide additional explanations.

 

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^{1) Carbon dioxide equivalent (CO2e) is a metric used to compare the emissions of various greenhouse gases based on their global warming potential relative to carbon dioxide (CO2). For example, the global warming potential of methane is 21 times greater than that of carbon dioxide (CO2). Therefore, we say that the CO2 equivalent of methane is 21.}

^{2) Griscom et al (2017), BCG analysis}

 

 

Written by Caio Gallego, our Intelligence Operations Manager and Leader of the Methodologies Working Group of the NbS Brazil Alliance, the Technical Note on REDD+ projects provides a comprehensive analysis of the challenges and opportunities in the carbon credits market, emphasizing the role of the APD approach in the conservation of private forests.

 

 

In contrast to Avoided Unplanned Deforestation (AUD), which aims to prevent illegal practices, APD applies to areas where vegetation removal is legally permitted, offering a financial alternative for preserving forests under pressure from economic activities.

The document highlights the importance of developing clear, locally adapted criteria to ensure the integrity of generated credits and to prevent projects from being questioned regarding their effectiveness and real contribution to reducing greenhouse gas emissions.

Additionally, it discusses how the APD strategy can align with efforts to combat deforestation, aiming to enhance both the robustness and integrity of the REDD+ mechanism.

To delve deeper into the approaches, impacts, and solutions for strengthening the carbon market, access the full Technical Note and discover how APD projects can drive forest conservation in Brazil.

 

or contact our team of specialists.

Confirming the quality of our projects and our commitment to climate, community and biodiversity, the Corridors For Life ARR Project has been validated and is now ready to generate carbon credits verified by the VCS and CCB standards.

 

Biofílica, in partnership with IPÊ – Instituto de Pesquisas Ecológicas, is proud to announce that the Corridors For Life ARR Project has reached another significant milestone by receiving VCS+CCB validation. This achievement not only validates the project’s commitment to restore degraded areas of Atlantic Forest biome, but also highlights its positive impact on the CCB tripod (climate, community and biodiversity).

The VCS+CCB validation confirms that the Corridors For Life ARR Project complies with the highest sustainability standards, assuring high quality carbon removal accounting, the promotion of social well-being and the protection of biodiversity. With a robust plan of activities, the project aims to restore 75k hectares over 20 years, to improve the lives of more than 600 people and contribute to the conservation of 215,000 hectares of native vegetation, including 28 vulnerable species and 3 critically endangered species in the Pontal do Paranapanema region.

 

 

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Project Highlights

 

The Corridors for Life ARR Project has the potential to remove 29 million tons of CO2e over 50 years by restoring 75,000 hectares of degraded areas in the Pontal do Paranapanema region. Thus, among the projects already validated by the VCS, it is currently the largest Brazilian ARR project in terms of annual emissions removal potential (baseline ex-ante of 514k tCO2e).

 

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As well as promoting environmental restoration, the project promotes environmental education activities, generates employment and income, and encourages the establishment of new forest seedling nurseries and restoration service companies, thus contributing to the sustainable development of local communities.

 

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VERRA’s validation of the project guarantees its compliance with the strict criteria of the certification standards, reinforcing its credibility and transparency.

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Main aspects recognized by the VCS + CCB Standards

 

The Corridors For Life ARR Project is fully capable of measuring tropical forest restoration carbon stocks, guaranteeing a methodologically sound approach.

 

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The carbon credits generated by the project are fundamental to enable large scale restoration activities of the degraded Permanent Preservation Areas (APP) and Legal Reserves (RL) in Pontal do Paranapanema, reinforcing the additionality of the project.

 

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The project has a low non-permanence risk of the carbon stocks removed by the project and effective mechanisms for mitigating future risks, demonstrating its commitment to long-term sustainability.

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The Corridors For Life ARR Project works in a transparent, equitable manner and guarantees the free, prior and informed consent of local communities, strengthening ties and promoting joint development.

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With a plan capable of making a significant contribution to the conservation of critically endangered species, the Corridors For Life ARR Project is eligible to receive the Gold Label for Biodiversity.

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This milestone represents a significant step forward against climate change, conservation of biodiversity and fair economic development, emphasizing Biofílica’s and IPÊ’s commitment to building a more sustainable future for all.

 

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Verra

VERRA, a non-profit organization, is responsible for VCS+CCB validation.

Operating the world’s leading carbon credit program, VERRA is committed to helping reduce greenhouse gas emissions, improve livelihoods and protect natural resources by working with the public and private sectors.

 

 

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For more information about the Corridors For Life ARR Project and its initiatives:

or contact our team of experts.

 

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About Ambipar Environment

Ambipar Environment aims to be the world’s best Nature-based Solutions (NBS) company, generating value for the environmental asset market, fighting climate change, protecting biodiversity and promoting well-being and social development.

We carry out projects that promote the reduction of emissions through forest conservation and the sequestration of emissions through reforestation.

We believe in Nature-Based Solutions as fundamental mechanisms for humanity to achieve the goals of the Paris Agreement and overcome the climate crisis. By 2030, between 35% and 50% of emissions reductions will have to come exclusively from Nature-Based Solutions.

 

Talk to Biofílica:
mkt.decarbon@ambipar.com / @biofilicabr

 

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About IPÊ

IPÊ – Instituto de Pesquisas Ecológicas is a Brazilian non-profit organization that works to conserve the country’s biodiversity through science, education and sustainable business. Founded in 1992, it is headquartered in Nazaré Paulista (São Paulo), where its education center, ESCAS – Escola Superior de Conservação Ambiental e Sustentabilidade, is also located. For IPÊ, biodiversity conservation is central to socio-economic transformation and tackling climate challenges.

Present in the Atlantic Forest, Amazon, Pantanal and Cerrado biomes, it carries out around 30 projects a year. The Institute has created a conservation model that is a benchmark in socio-environmental conservation, involving scientific research into species, environmental education, community involvement and mobilization, habitat and landscape conservation and support for the construction of public policies.

IPÊ is responsible for planting more than 7 million trees in the Atlantic Forest, contributes directly to the conservation of six species of fauna and carries out environmental education and training for an average of 15,000 people a year. The projects benefit more than 200 families with sustainable actions, knowledge about socio-environmental conservation and income generation. To develop its socio-environmental projects, the organization relies on partners from all sectors and works as an articulator on fronts that promote engagement and mutual strengthening between socio-environmental organizations, private initiative and government institutions.

 

To find out more:
^{ipe.org.br / @institutoipe} 

 

^{by Caio Gallego, NBS Intelligence Manager and Marcos Siqueira-Neto, ALM Specialist (Agricultural Land Management)}

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Planting and livestock raising are among humanity’s oldest activities. Agriculture allowed the emergence of cities, productive diversification, and commercial activities. Altering landscapes and utilizing natural resources, agriculture is the greatest human endeavor on Earth.

 

 

to provide feed, fiber, and bioenergy for the 10 billion people estimated to occupy the planet in 2050, and without increasing impacts on natural ecosystems, the rise of agricultural production must be made possible not only by increasing productivity, but also through recovery of degraded areas.

In this 2^nd technical positioning of Biofílica, we intend to address the importance of Brazilian agribusiness for socioeconomic development and its decisive role as a potential Nature-Based Solution. We also highlight the need to face the challenges of food and energy security against climate change, guaranteeing human health and well-being, while also helping to reduce environmental degradation.

 

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The growth of Brazilian agriculture and its environmental impacts

The success of Brazilian agriculture was due to the presence of areas with favorable environmental conditions, abundant water, and a mechanized production, combined with technological innovations and tropicalized management practices, resulting in both increased productivity and the expansion of production frontiers, especially in the Amazon and the Cerrado.

 

 

Family agribusiness, which accounts for 77% of rural properties, is important for supplying the domestic market and controlling food prices. Corporate agribusiness accounts for around 50% of the export basket, with emphasis on the soybean and sugar-alcohol complexes, cereals, meat, and forestry products.

The productive rise of Brazilian agriculture began in the 1960s, a period known as the “Green Revolution”. Its modernization was based on scientific research and technological innovations, with emphasis on the creation of the Brazilian Agricultural Research Corporation (Embrapa). However, this growth brought deep changes to the production model and rural landscape, and consequences for traditional farmers, such as:

• Need to adapt to the new production model
• Need for credit to purchase equipment and inputs
• Need for technical assistance for technological transition
• Dependence on technology and inputs external to the properties.

 

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Which also reflected in Brazilian territorial planning, such as:

• Unemployment in the countryside
• Rural exodus
• Increase in large estates
• Migratory movements
• Territorial occupation and the need for infrastructure.

 

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As for the environment, the biggest impacts caused by the growth of the agricultural sector are related to two factors:

1. intensive change in land use, which is one of the main vectors responsible for deforestation, and,
2. after conversion, degradation of cultivated areas and pastures, caused by inadequate management practices or lack thereof.

 

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These factors, added to the burning of plant residues, flooded rice production, the excessive use of fertilizers (especially nitrogen) and agrochemicals, in addition to enteric fermentation and the decomposition of animal waste are responsible for environmental degradation and increased greenhouse gas emissions (GHG), worsening climate change, of which feed back into impacts on production, such as changes in territorial zoning and agricultural suitability, increased desertification risk and extreme weather events.

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Regulatory actions for sustainable development in Brazilian agriculture

 

 

Historically, Brazilian agricultural policies have encouraged commodity production and deforestation focused exclusively on increasing production. However, more recently, international pressure, markets and civil society have been demanding that various sectors, including agribusiness, establish clear goals and implement effective actions to reduce environmental degradation, mitigate climate change, biodiversity losses, eradicate work analogous to slavery, and promote fair labor relations.

In addition to changing legislation to protect the environment, voluntary initiatives seek to reconcile environmental preservation and economic development to encourage responsible agricultural production, for example, the ‘Soy Moratorium‘. This initiative marks the companies’ commitment not to sell soy from deforested areas of the Legal Amazon. In 2020, the ‘Brazil Climate, Forests, and Agriculture Coalition‘ brought together representatives from agribusiness and other entities, and presented six measures to quickly reduce illegal deforestation in the Amazon, these being:

1. Intensify supervision
2. Suspend the CAR for areas in public forests
3. Designate areas for protection and sustainable use
4. Grant financing under socio-environmental criteria
5. Provide transparency in vegetation suppression authorization data
6. Suspend land regularization processes for properties with deforestation found after July 2008.

 

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Recently, the European Union published Regulation 2023/1115 – EU Deforestation-Free Regulation, imposing due diligence requirements on imports of agricultural products that may be associated with deforestation. In fact, this regulation worked as a catalyst to accelerate initiatives aimed at traceability of value chains, e.g., the ‘Soja na Linha’ initiative, which presents criteria for soy traceability. In livestock, the most recent initiative was the ‘Protocolo de Monitoramento Voluntário de Fornecedores de Gado no Cerrado‘, presenting the socio-environmental monitoring criteria for the purchase of products of bovine origin.

In this context, it becomes evident that the search for sustainable development in Brazilian agribusiness goes beyond responsible production, respect for land, labor, and environmental legislation. It is also influenced by regulatory frameworks, agreements, and guidelines on international markets, which has reputational consequences, including sanctions and embargoes. These factors affect both the demand and the prices of Brazilian agricultural products, directly impacting the income of rural producers.

 

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Agriculture as a Nature-Based Solution

As defined by the United Nations Environment Programme (UNEP), Nature-Based Solutions (NBS) are actions to conserve, restore or sustainably use of natural or modified ecosystems, which address social, economic, and environmental challenges, while time that provides human well-being, quality ecosystem services, climate resilience, and benefits for biodiversity.

Based on this definition, the NBS goes beyond environmental issues, and points to the need to promote actions to support rural populations, especially smallholders, women, and traditional populations in vulnerable situations, through the provision of credit and financing services, market access, land ownership, health, social services, education, training, knowledge, and environmentally appropriate and accessible productive technologies.

For Brazilian agriculture to be seen as an NBS, it is necessary to encourage changes in the approach to the current production model. This transformation must occur both on rural properties and in productive activities. This will only be possible through the involvement of public authorities, international organizations, universities, private sector, and civil society, especially rural producers, and environmentalists.

Changes to the production model initially occur in the administrative and financial management of rural properties and extends to its productive activities. Best management practices with a NBS bias operate in synergy with natural processes, enhancing ecosystem services. In addition to the benefits for production, improved soil health and the productive environment, these practices effectively promote the recovery of degraded, unproductive, or low-productivity areas. Some examples of best management practices are no-tillage, cover crops, crop rotation and diversification, rotational pasture management, agroforestry, among others.

Adoption of best management practices also guarantees a more resilient agricultural environment, both to financial and environmental risks, helping producers to adapt productive activity to increasingly varied climatic conditions, as well as directly contributing to the mitigation of climate change, through sequestration carbon in soil and vegetation and reducing GHG emissions into the atmosphere.

In this sense, the necessary actions for the transition from current production models to the sustainable development of Brazilian agriculture must occur through the adoption of best management practices with a NBS bias that provide i) socioeconomic benefits, such as increased productivity and agricultural profitability, with improved living conditions in rural communities and new sources of income; ii) adaptation and resilience of productive activities to climate risks, guaranteeing food and energy security and, iii) the reduction and removal of GHG emissions.

 

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Challenges and Perspectives

If, on the one hand, the sustainable development of agriculture is a potential SNB and can leverage the global sustainable development, on the other hand, given the size of the country, Brazilian agriculture is marked by the heterogeneity of production models that differ in terms of scale, production systems, use of production factors and inputs, and presents different technical and technological levels.

 

 

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In most cases, this discrepancy is related to regional diversity and the knowledge of rural producers, as well as their different capabilities to make investments in the property and in its productive activities. In general, the barriers that prevent the transition from the current production model to a sustainable approach in agriculture are related to:

1. producers’ resistance to adopting new models of property management and their productive activity (cultural barrier)
2. lack of knowledge of the impacts of the exhaustion of natural resources, loss of quality of ecosystem services and climate risks on production (institutional barrier)
3. lack of capacity and/or financial strategy to make improvements in productive activity (financial barrier)
4. lack of technical assistance and qualified labor force to implement sustainable production (technical barrier)

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Facing these challenges reinforces the synergy between agriculture and NBS through meticulous engagement of rural producers with the sustainable development of production. Thus, providing rural producers with knowledge, training, and technical assistance to adopt best management practices in the property and productive activity, demonstrating their benefits in productivity and profitability.

It is known that to make changes in management practices, it normally requires investments in equipment, infrastructure, inputs, and labor. Therefore, rural producers need access to credit lines with sustainability criteria that can be public (RenovAgro and Fundo Clima), private (green bonds) or mixed (blended financial), in addition to other financial incentives such as payments for environmental services and the carbon market.

Currently, in addition to the potential benefits to society and the environment, the adoption of best management practices with a NBS bias also makes it possible to implement projects to generate carbon credits, which can be certified in the Voluntary Carbon Market (VCM). The entry of the agricultural sector into the carbon market represents yet another paradigm shifts in history, directing real financial incentives towards the development of the sector towards sustainable production.

 

 

In this way, Brazilian agriculture can take a leading role in leveraging the Sustainable Development Goals, as it guarantees food security and improved nutrition (SDG2), becomes the largest supplier of biofuels, influencing the global energy matrix (SDG7), boosts the agro-industrial chain and responsible consumption (SDG 12), contributes to the empowerment of small farmers and women (SDG5), and contributes to the poverty eradication (SDG1). Furthermore, the sustainable intensification of agricultural production has a direct effect on forest conservation, reducing pressure on deforestation and mitigating climate change (SDG13).

Brazilian agriculture has a lot to gain by aligning itself with the principles of Nature-Based Solutions. However, for this to happen, it is essential to create, encourage and disseminate export policies, credits, and socio-environmental incentives, as well as markets for carbon credits, low carbon/net zero products, and fair trade. At the same time, agribusiness, both family and business, needs to adapt, transform, and commit to continuous improvement in the management of rural properties and their productive activities. These actions must aim to increase productivity, productive diversification, and financial benefits, advancing the sustainable development agenda, reducing environmental depletion, and increasing resilience to climate risk.

 

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For more:

^{Denny, D.M.T., Cerri, C.E.P., Cherubin, M.R., & Burnquist, H.L. (2023).
Carbon Farming: Nature-Based Solutions in Brazil.}

 

Research carried out by the journal Nature Communications shows that the world’s population prefers to adopt Nature-based Solutions in order to sequester Greenhouse Gases (GHG) from the atmosphere.

A Recent study published by the journal Nature Communications has revealed a worldwide trend regarding the public’s preferences for solutions to combat climate change. Carried out in 22 countries, both developed and developing, and covering various regions, the study highlights the urgency perceived by the population in tackling this global challenge. Among the countries analyzed, Brazil, the United States, China and Germany stand out.

The research presented five carbon sequestration techniques: reforestation; soil management; Direct Air Capture with Carbon Storage (DACCS); Enhanced Weathering (EWR); and Bioenergy with Carbon Capture and Storage (BEECS).

Among the tools evaluated for capturing CO2 in the atmosphere, Nature-based Solutions, such as reforestation and restoration of degraded areas (ARR), emerged as the most preferred by the public in all research groups.

These techniques not only capture carbon, but also offer additional benefits, such as the preservation of biodiversity, the socio-economic development of local communities and the strengthening of the resilience and adaptive capacity of natural ecosystems.

In addition, respondents said that another great advantage of Nature-based Solutions is that these techniques foster environmental education, resulting in individuals who were previously vectors of deforestation, such as some rural landowners, becoming engaged and understanding the importance of reforestation and the restoration of degraded areas for the improvement of local ecosystems and, consequently, becoming more deeply engaged in restoration activities.

 

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The survey also showed that, in countries with tropical forests, participants linked afforestation and reforestation efforts to prohibiting or discouraging deforestation, even though this practice reduces rather than removes carbon. In other words, several participants stressed the importance of multiple forest protection systems for mitigating climate change.

At Ambipar Environment, we share this vision and believe that conserving and restoring forests is the most appropriate way to overcome the global climate crisis. Trees are our oldest technology for playing a crucial role in carbon sequestration, acting as guardians of the climate balance. Through photosynthesis, they absorb carbon dioxide from the atmosphere, converting it into oxygen and storing the carbon in their biomass and in the soil.

This process, in addition to mitigating the effects of climate change by reducing the concentration of greenhouse gases, also contributes to maintaining biodiversity, the health of terrestrial ecosystems and the maintenance of the natural water cycle. Thus, preserving and expanding forests is fundamental to meeting global climate challenges.

That’s why we’re developing the Corridors for Life ARR Project with the Institute of Ecological Research – IPÊ, which aims not only to capture carbon, but also to restore ecosystems, conserve biodiversity and promote sustainable socio-economic development through job creation, training and empowerment of local communities.

 

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Results of the Corridors for Life ARR Project

 

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To date, the project has planted an impressive total of 2,688,986 seedlings of more than 100 species of trees native to the Atlantic Forest, covering 1,501 hectares of degraded areas and making a significant contribution to preserving biodiversity in one of the world’s most threatened biomes. In monitoring the project areas, 174 species of trees, 166 birds and 27 mammals have already been identified.

In the social sphere, all this work is responsible for fostering 10 community nurseries, 11 restoration service companies and two IPÊ teams, generating employment and income for 188 people, including 53 women and 54 young people, thus strengthening local economies. In addition, through training and community empowerment activities, the project indirectly benefits a further 492 people.

But the numbers go further. The Corridords for Life ARR Project has the potential to sequester an impressive 29 million tons of CO2e over 50 years by restoring 75,000 hectares of degraded and priority areas for landscape conservation in Pontal do Paranapanema, a region located in the far west of the state of São Paulo. In addition, the project promotes environmental education, research and scientific development activities and encourages the development of new local companies in the restoration chain, contributing to the sustainable development of communities.

Validated by Verra’s Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB) standards, the project guarantees its compliance with the strict criteria of the certification standards, reinforcing its credibility and transparency. By getting involved with the Corridords for Life ARR Project, you not only become part of a vital initiative to combat climate change, but also contribute to building a more sustainable and resilient future for all.

 

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Annie Groth
Head of Advocacy & Engagement
Ambipar Environment

Talk to our team and learn more about our NbS (Nature-based Solutions)
projects and find out how you too can make a difference in the fight against climate change.

^{by Caio Gallego, NBS Intelligence Manager at Biofílica Ambipar}

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Forest management in the Amazon plays a crucial role in environmental conservation and the fight against climate change, especially in the face of growing greenhouse gas (GHG) emissions resulting from the conversion of tropical forests. Sustainable Forest Management (SFM) represents an evolution from the predatory practices of the past to a more responsible and sustainable approach, allowing for the selective and low-impact extraction of timber, promoting forest regeneration and the preservation of biodiversity.

 

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There is a positive correlation between SFM and the Voluntary Carbon Market (VCM), since the former is a low-impact forest management activity and the latter aims to finance activities that promote the reduction or removal of GHG emissions through their practices. We can consider different aspects of this relationship, such as:

• Territorial governance
• Scale
• Time
• Financial return and
• Scientific research

For this reason, it is understood that associatingSFM with carbon projects is an initial step towards promoting territorial management and ensuring the financial stability and long-term vision necessary for the sustainable development of the Amazon. We will discuss the reasons for this below.

 

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Complementary Practices

Currently, the conversion of tropical forests to agricultural use accounts for a significant portion of Brazil’s Greenhouse Gas (GHG)¹ emissions. Therefore, forest management, management and conservation practices play a fundamental role in mitigating socio-environmental impacts and meeting Brazil’s targets in international agreements.

This begs the question: “How can logging be considered an ally in forest conservation strategies and the fight against climate change, given that it is one of the main contributors to degradation and GHG emissions?”. Through this Technical Positioning, we intend to address this question and begin a series of positionings that we will publish this year. Through this initiative, we aim to bring society closer to the challenges, dilemmas and opportunities that carbon project developers deal with on a daily basis.

This text will focus on Timber Forest Management, which consists of the selective extraction of native tree species for processing into different timber products. Although there are various approaches to forest management, such as the extraction of non-timber products, wildlife management, ecotourism, among others, Timber Forest Management is still the most important activity in the Amazon in economic terms², in terms of scale and technical-scientific knowledge.

The practice of timber management did not originate in the way we know it today. At the beginning of the 20th century, it was characterized by predatory exploitation of forest resources, but over the last few decades it has evolved into a more sustainable and responsible practice.

This development was spurred on in the early 1990s, especially due to the 1992 United Nations Conference in Rio de Janeiro, Eco-92, where a number of commitments related to forest management were established, resulting in the formulation of new national laws and policies. In the following years, the first certifications emerged – with the FSC (Forest Stewardship Council) standing out – and, with improved techniques for reducing impacts and a greater focus on social and biodiversity aspects, the practice came to be called Reduced Impact Forest Management, or Sustainable Forest Management (SFM).

Today, SFM is a practice aimed at the selective extraction of wood, using low-impact techniques that enable forest regeneration and the preservation of biodiversity. For those who are curious to understand SFM in more detail, we have listed some reading suggestions at the end of this text.

In parallel with the development of Timber Forest Management, the Voluntary Carbon Market (VCM) was also being developed. After the Kyoto Protocol came into force in 2005, the VCM thesis gained more strength due to the incentives for developing countries to generate carbon credits, paving the way for the emergence of various certification standards not linked to the Protocol, such as the Verified Carbon Standard (VCS) and the Gold Standard.

 

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I don’t intend to go into the details of the current design and structure of the VCM here. In this sense, for those interested in the subject, I list recommended reading at the end. It is worth noting that VCM has grown significantly in recent years, reaching the US$ 2 Billion mark in annual transactions in 2022³ and it is estimated that it could exceed US$ 50 Billion in the next decade⁴.

In this context, the forestry sector plays an important role, especially for the REDD+ modality (Reducing Emissions from Deforestation and Forest Degradation), which today represents around 32% of this market in value⁵ . REDD+ is a mechanism applied by governments or organizations that aims to remunerate results obtained by improving forest management in order to prevent deforestation and forest degradation, ensuring the maintenance of carbon stocks and biodiversity.

But what is the relationship between VCM and Timber Forest Management? This relationship can be approached from two opposing perspectives. On the one hand, predatory logging can threaten forest conservation and reduce the effectiveness of REDD+ strategies. On the other hand, Reduced Impact Forest Management, especially certified operations, can be an ally of conservation and essential for REDD+ strategies.

 

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Main factors that demonstrate the positive correlation between Sustainable Forest Management and Carbon Projects

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Territorial Governance:

As a popular saying goes, “What you don’t use, you lose”. One of the main factors resulting in land invasion and deforestation in the Amazon is the lack of territorial governance. Implementing and strengthening territorial management is a fundamental strategy for REDD+ Projects, through physical presence, environmental monitoring, patrolling and field operations. In this respect, MSF’s presence plays a key role through its annual large-scale operations. Both the REDD+ project and SFM ensure the maintenance of the business’s main assets: timber and carbon. They also implement stakeholder management, generating positive impacts and reducing the risk of social conflicts.

 

Scale and Time:

The environmental challenges we face today require large-scale solutions that will last over the long term. These are also fundamental principles of both the carbon market and SFM. In other words, to generate consistent positive climate impacts, carbon market initiatives need to be viable on a large scale and their benefits must be permanent. REDD+ projects, for example, must last at least 40 years. SFM is structured in a similar way, with cycles of at least 25 years for each Annual Production Unit (APU), allowing for the natural recovery of impacts in the logged area before the operation returns to the same area. This dynamic requires the structuring of a long-term operation in large territories. Therefore, there is nothing more logical than reconciling the two operations, reducing risks and making it easier to gain scale in the business.

 

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Financial Return:

Standing forest in Brazil is worth less than felled forest – this is a maxim that has been repeated for decades. Removing the forest generates immediate income through the sale of timber and the rapid implementation of extensive cattle ranching, in addition to the immediate appreciation of the land, which then becomes “productive”. In Brazil, there is still a lack of relevant economic incentives aligned with forest conservation that could reverse this logic. These should not only be limited to public incentive policies, such as Payments for Environmental Services (PES), but also to the use of market mechanisms, such as carbon credits, and the sustainable exploitation of natural resources such as wood, resins, medicines, tourism, among others. The addition of nature-based economic activities, also known as the Bioeconomy, tends to increase financial incentives and balance the cost-opportunity ratio compared to other conventional activities, such as extensive livestock farming and agriculture. In other words, growth and diversification in the generation of income from the sustainable exploitation of natural resources has a direct impact on the incentives to maintain these resources and, consequently, will lead to a reduction in deforestation, the main objective of the REDD+ mechanism.

 

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Scientific Research & Innovation:

Many consider the Amazon to be an open-air laboratory, full of untapped riches and with enormous potential to offer solutions to humanity’s challenges in the 21st century. Unfortunately, the exploitation of natural resources is still predominant in these regions and is based on the extraction of primary resources with a low level of processing and practically no technological use (such as wood, minerals, fruit and nuts), resulting in the destruction of undiscovered potential wealth. If we are to reverse this logic, we need to invest heavily in scientific research and innovation, accelerating biotechnology initiatives in tandem with valuing traditional knowledge. This approach is in line with the values promoted by REDD+ and SFM. Unfortunately, the existence of large territories under long-term, financially sound conservation management is the exception, not the practice in Brazil. Therefore, the consolidation of these initiatives has the potential to open doors to Research & Innovation, through incentive programs in partnership with local governments and the provision of adequate infrastructure.

 

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Impact of Activities

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Finally, I couldn’t fail to mention the impacts generated by ongoing logging operations in a native forest and how they can be reflected in REDD+ projects. Even certified SFM causes impacts, such as the construction of infrastructure, trails for machinery, the opening of clearings and the removal of high biomass trees.

However, it is possible to accurately measure the level of these impacts on carbon stocks and subsequently discount them in the REDD+ project’s emissions accounting. This can be done by reconciling operational field data with remote sensing techniques, avoiding questions regarding the integrity of the carbon project’s GHG emissions calculation. Other potential social and environmental impacts can be monitored and mitigated, which is why certifications that ensure quality control of operations are important. It is important to emphasize that this impact is substantially less than other common economic alternatives, such as conventional predatory logging, which often triggers serial degradation culminating in the establishment of cattle ranching.

 

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Future Prospects

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Undoubtedly, the solutions for sustainable economic development in the Amazon region must go far beyond the extraction of primary resources such as timber, and transitional economic incentive mechanisms such as the carbon market.

On a macro scale, land-use planning needs to take place, through land-title regularization, command and control over illegal activities, and the implementation of effective management of public lands. At the same time, adequate investment in knowledge generation is essential in order to sustain the process of technological transformation of production chains. Without these initiatives, we will never be able to move beyond extracting primary products with low added value, preventing growth in income generation and socio-economic development.

The establishment of SFM activities associated with carbon projects does not represent the definitive solution for the Amazon, but rather a fundamental initial stage to enable the consolidation of territorial governance with financial stability and a long-term vision, thus supporting the development of other initiatives with greater added value and ensuring the maintenance of environmental assets for generations to come.

 

 

 

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References and Suggested Reading:

• System for Estimating Greenhouse Gas Emissions and Removals – SEEG
• Approval of the bill for a Brazilian ETS in the Chamber of Deputies is a remarkable achievement – Positions – Biofílica Ambipar
• COP28 and the Voluntary Carbon Market – Positions – Biofílica Ambipar
• Brazilian Institute of Geography and Statistics (IBGE) – Plant extraction and forestry
• Bioeconomy Observatory (FGV) – Voluntary Carbon Market in Brazil: In reality and in practice
• Ecosystem Marketplace – State of the Voluntary Carbon Markets 2023
• World Bank: State and Trends of Carbon Pricing 2023
• Imazon – Guide to Community Forest Management
• FSC – Forest Management
• Instituto Floresta Tropical (IFT) – What is Reduced Impact Logging and Forest Management (RILFM)?
• Idesam – Forest Cities: Sustainable Forest Management [Video]

 

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Caio Gallego
NBS Intelligence Manager
Biofílica Ambipar

 

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^{[1] Around 48% of national emissions in 2022, according to data from the SEEG (System for Estimating Emissions and Removals of Greenhouse Gases).
[2] According to the IBGE, around 63% of extractive production in Brazil in 2022 was of timber origin.
[3] Ecosystem Marketplace, 2023: State of the Voluntary Carbon Markets 2023
[4] McKinsey, 2021: A blueprint for scaling voluntary carbon markets to meet the climate challenge
[5] Ecosystem Marketplace, 2023: State of the Voluntary Carbon Markets 2023}

 

Dear friends, partners, and clients,

 

As we wrap up another year of hard work, we want to share with you our joy and pride for everything we have achieved together. 2023 represented a unique moment to rethink key aspects of the voluntary carbon market, in which there was a true “separation of the wheat from the chaff” aimed at consolidating carbon projects with high socio-environmental integrity.

Resilience was the keyword for this year, but also represented a window of opportunity so that we can begin 2024 stronger and continue to join forces to improve the integrity, quality, trust and scale of Nature–Based Solutions. 

 

In Brazil, the three branches of government joined forces to strengthen the fight against climate change, and we have never been so close to establishing a Brazilian Emissions Trading System (ETS)

 

At the Legislative level, our Chamber of Deputies approved Bill No. 2,148/2015, which creates a Brazilian ETS. The advancement of this bill is a remarkable achievement for the decarbonization of the country’s economy and strengthens the voluntary market, as there will be interoperability between the two mechanisms. We have developed an analysis on the topic, which can be accessed through this link.

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Law No. 14,590/2023 was also sanctioned. It corrects a historic obstacle in the national legislation on Forestry Concessions, now allowing the development of carbon projects in those areas. Biofílica Ambipar has been actively working with the Ministry of the Environment and the Brazilian National Development Bank to assist in regulating the law, preparing feasibility models and scenarios aiming to substantially leverage forestry concessions in Brazil.

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At the Executive level, Biofílica Ambipar obtained a seat on the National Commission for REDD+ (Conaredd+), representing the private sector. Representing this chair means receiving recognition for the technical expertise and engagement of Biofílica Ambipar in the area of ​​Nature-Based Solutions. 

 

Globally, the main entities and stakeholders of the Voluntary Carbon Market (VCM) have joined forces to improve integrity, trust, and scale, reflecting a positive perspective regarding the future of this climate financing mechanism. 

 

At COP28, which took place in Dubai, we participated in several discussions and were able to interact with our international partners. We have seen global consensus on the importance of carbon markets for decarbonization and climate change mitigation. As an example, we cite the speech of the President of the European Union, Ursula von der Leyen, about the importance of these mechanisms and their connection with the protection of Biodiversity. We also developed a bulletin with news on the VCM during COP28, which can be accessed through this link.

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Additionally, in a historic announcement supported by the COP28 Presidency, the Science Based Targets Initiative (SBTi), the Voluntary Carbon Markets Initiative (VCMI), the Integrity Council for the Voluntary Market (ICVCM), GHG Protocol and the We Mean Business Coalition (WMB) announced that they will join forces to establish an integrity manual that provides scientifically based methodologies for the decarbonization of production processes and the use of voluntary carbon credits to offset residual emissions. We recommend the following video, released by the entities, explaining the urgency of financing forest conservation and restoration.

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On the supply side of the VCM, we watched the world’s largest certifiers, such as Verra, American Carbon Registry (ACR), Architecture for REDD+ Transactions (ART), Climate Action Reserve, Global Carbon Council and Gold Standard, announce that they will work together to establish common principles related to quantifying, verifying and maintaining carbon emissions reductions and removals in their respective methodologies. The partnership aims to ensure that each of these certifiers is aligned with the Core Carbon Principles (CCPs), a set of parameters developed to identify high-integrity voluntary carbon credits.

 

Besides the national and international advances in the VCM, we highlight the following market milestones in 2023

 

Verra, certifier of all Biofílica Ambipar projects, published a consolidated methodology for forest conservation projects involving unplanned deforestation (REDD+ AUD). The new methodology aims to harmonize project baselines, providing a greater environmental integrity of these carbon credits.

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After seven years, Ecosystem Marketplace updated its analysis of how companies that buy carbon credits work vs. those who do not use this strategy. The study, carried out with more than 7,000 companies, identified that, on average, companies that are part of the voluntary market invest three times more in emission reduction activities than companies that do not. In other words, the study combats the misunderstanding that companies that buy carbon credits do not have broad decarbonization strategies.

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The involvement of companies with the voluntary carbon market in 2023 was also notable, even in a challenging year. According to data from Verra, the volume of carbon credits from forest conservation projects (REDD+) retired in 2023 exceeded the volume retired in the same period of the previous year by 70%, reaching 46 million tCO2e. Total retirements at Verra, considering all types of projects, reached the level of 104 million tons, the same volume observed in the equivalent period of 2022.

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Internally, we maintained our focus on ensuring forest conservation and restoration projects of high quality and integrity. With a team of more than 70 people with a high technical level, we conducted 10 validations/verifictions, developed six new projects, consolidated intelligence in projects focused on sustainable soil management in agriculture and livestock and in Blue Carbon, and implemented new seals and co-benefits certifications. We also innovated the financing model in ecological restoration areas, through the investment of USD 60 million in the forest restoration of the Atlantic Forest Biome within the scope of the Corridors for Life ARR Project, in partnership with Astrazeneca. Finally, we are increasingly integrated into the Ambipar Group, taking advantage of all the synergy and thousands of customers around the world to provide decarbonization solutions. We could not be on a more powerful platform to achieve our mission.

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All our achievements were only possible due to the support and trust of our customers and partners, who believe in the need to significantly increase financing for forest conservation and the reforestation and restoration of degraded areas in Brazil. 

 

In 2024, keep counting on Biofílica Ambipar for a more sustainable future. 

On behalf of our entire team, I wish you an extraordinary and prosperous 2024.
With kind regards

Plínio Ribeiro
Co-founder and CEO of Biofílica Ambipar

 

 

 

🌳 IN A REMARKABLE ACHIEVEMENT, THE BRAZILIAN CHAMBER OF DEPUTIES APPROVED A BILL TO ESTABLISH A NATIONAL ETS.

 

In a year marked by the worsening of the global climate crisis, in which we experienced extreme temperatures, droughts in unprecedented places and tragic floods, yesterday, Brazil experienced a historic moment within its Chamber of Deputies when the deputies approved a bill proposal to establish an emissions trading system (ETS) for the country. There were 299 votes in favor of the 404 parliamentarians present. This means that 73.76% of the deputies voted in favor of this major step for the decarbonization of its industries.

Since the sanction of the National Climate Change Policy in 2009, there has been a legal provision in Brazil for the creation of a regulated carbon market. It’s been a long 14 years of waiting, a period in which we missed great opportunities to position ourselves at the forefront of the world as a leading country in creating innovative solutions that drive economic growth in a sustainable manner. It’s worth remembering that, in 2009, the European ETS, the first regulated market of its kind in the world, was only 3 years old and was still in its infancy. Today it trades more than 754 billion Euros in its primary and secondary markets, generating € 42 billion annually of taxes for the bloc’s countries.

 

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But why is having a regulated national carbon market so important for Brazil?

 

First, it is always important to highlight the differences between an ETS and the Voluntary Carbon Market. In an ETS, the State establishes a Greenhouse Gas (GHG) emission limit within the productive sector, enabling the eventual trading of deficits and surpluses of emissions between each other. On the other hand, the voluntary market is characterized by an environment in which people, companies and organizations neutralize their GHG emissions through purchases of carbon credits.

According to the proposed regulation, companies that emit more than 10 thousand tons of carbon dioxide equivalent – ​​CO2E¹ per year will be required to establish a plan to monitor their emissions, developing a periodic report, while companies above 25 thousand tons of CO2E per year, in addition to reporting and monitoring, they will need to reconcile their emissions through emissions licenses distributed free of charge or at a cost by the government. It is estimated that there are around 5,000 companies in Brazil that emit more than 25 thousand tons of CO2E. Thus, the Brazilian Regulated Market, when implemented, will be the largest carbon market in Latin America.

Secondly, by creating an emissions license trading system, in which it is possible to transact emissions quotas between companies that have exceeded their respective GHG limits with companies that have managed to decarbonize their production processes, we enable carbon pricing to encourage the competitiveness of the Brazilian industry and its innovation.

As in Brazil more than 50% of greenhouse gas emissions are the result of deforestation, forest degradation and land use change, the proposed law is in the right way establishing interoperability between voluntary and regulated markets, through the possibility for companies to offset part of their emissions through the acquisition of Verified Emissions Reduction or Removal Certificates – CRVE, which will be voluntary carbon credits converted for commercialization in the regulated market, after the definition, by the Brazilian State, of which certification bodies and methodologies currently available will be capable of acceptance in this new market.

 

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Other advances in the Brazilian voluntary carbon market in the proposal approved by the Chamber of Deputies:

 

• Legal certainty on points such as the ownership of credits, in which it was defined that, while the current status for voluntary carbon credit remains, when a carbon credit is transformed into a CRVE, it will be interpreted as a “market asset”)
• Free initiative (including at a state level) in the development of carbon projects
• Rules that prevent double counting of credits and increase the socio-environmental integrity of projects
• Update of tax legislation regarding credits
• Freedom for states to implement their own jurisdictional programs (under the responsibility of the public authorities) for carbon generation, while at the same time there is also the guarantee of the possibility for private properties to exercise their property rights by requesting the exclusion of their respective areas from such programs
• Environmentally appropriate waste disposal and recycling projects can generate carbon credits
• Guaranteeing appropriate benefit sharing for traditional communities and indigenous peoples, in which ARR initiatives will allocate to those communities at least 40% of the carbon credits generated, while REDD+ projects will allocate a minimum of 60%
• Guarantee that those settled in agrarian reform projects have the same rights and duties as indigenous peoples and traditional communities

 

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New additions to the emissions trading system included:

 

• An allocation of 85% of the resources raised by the regulated market to finance scientific research and technological development activities with the aim of promoting the decarbonization of productive activities
• Entry of motor vehicles as a source of regulated emissions
• Environmentally appropriate waste treatment and final disposal units will be considered based on their transversal potential for mitigating greenhouse gas emissions and will not be subject to the emission limits set out in the law when they are proven to adopt systems and technologies to neutralize such emissions.
• Double appeal level for possible application of fines for non-compliance with emissions reconciliation.

 

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Lastly, it is important to note that there are still several steps necessary to implement a Brazilian ETS. The proposal will now be sent back to the Federal Senate, which has already approved material that was used as the basis for the bill approved by the Chamber of Deputies. This should speed up the legislative process, but as highlighted, the bill has suffered several modifications that need to be discussed. Finally, if the bill is sanctioned, the proposed timeline of implementation is five years.

Biofílica Ambipar Environment will continue to share our technical expertise with the Brazilian parliament, the Federal government, civil society and, principally, our clients, to engage in their business decarbonization.

 

 

 

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^{[1] CO2E is a metric measure used to compare emissions of various greenhouse gases based on global warming potential relative to carbon dioxide (CO2). For example, the global warming potential of methane gas is 21 times greater than the potential of carbon dioxide (CO2). So, we say that the CO2 equivalent of methane is equal to 21.}