Brazil Pushes to Expand Carbon Market Coalition with Emerging Economy Focus

Brazil’s Finance Ministry is leading efforts to broaden the Open Coalition for Carbon Markets beyond its current 11 members, with particular focus on attracting emerging economies developing emissions pricing frameworks. The coalition, launched at COP30 in Belém and co-led by Brazil, the European Union and China, represents jurisdictions accounting for approximately 42 percent of global emissions. Current members include Germany, Canada, Singapore, France, Norway, New Zealand, the United Kingdom and Turkey, with government sources indicating additional countries have expressed interest but lacked time to formalize participation before the upcoming Wuhan meeting.

A Brazilian delegation led by Cristina Reis, extraordinary secretary for carbon markets at the Finance Ministry, departed September 11 for the coalition’s second high-level meeting in Wuhan, China, scheduled for September 14-18. The gathering will approve a six-year work plan addressing convergence across carbon trading systems, covering emissions monitoring and measurement protocols, offset mechanisms, and broader market design elements. Technical observers include the Climate Club, Green Climate Fund, World Bank and International Emissions Trading Association.

The coalition’s roadmap envisions a three-phase approach: initial mapping of regulatory differences across jurisdictions, followed by alignment efforts, culminating in interoperability resembling linked systems. Ana Paula Cavalcante, undersecretary for regulation and methodologies, indicated the work plan explicitly outlines a pathway toward deeper integration of participating systems, though mutual recognition of carbon assets remains a long-term objective.

Brazil’s expansion strategy reflects an assessment that carbon markets require scale and jurisdictional convergence to fulfill their potential for mobilizing transition finance. The timing aligns with China’s ongoing expansion and reform of its emissions trading system while Brazil prepares to implement its own regulated carbon market under legislation approved in late 2024.

Parallel to coalition activities, Brazil is pursuing bilateral discussions with China on carbon market cooperation and climate-related investment, with officials targeting a memorandum of understanding announcement at COP31 in November. Reis confirmed Brazil will use the Wuhan meetings to assess Chinese interest in purchasing Internationally Transferred Mitigation Outcomes, carbon credits traded between countries under the Paris Agreement. Brazil is also evaluating private sector requests to accelerate the timeline for authorizing international carbon credit transactions, potentially advancing the schedule beyond the initial 2031-2035 verification period.