Brazil has significant potential in the carbon credit market due to its vast size and diverse biomes. According to BloombergNEF, Brazil could become the world’s largest country in carbon reduction, offsetting an equivalent cumulative total of 30.5 billion metric tons of carbon dioxide by 2050 through avoided deforestation, reforestation, and sustainable agriculture (Millard andAmat 2024). As the first Brazilian certifier in this market, LuxCS is uniquely positio ned t o benefit from the region’s developments. Brazil has made significant strides in the carbon market. In 2021, the Green Rural Product Note (CPR Verde) was established by Presidential Decree, providing an alternative for rural producers to obtain resources from financial institutions, backed by the carbon stock of their property. This means landholders demonstrating more carbon abatement activities on their land are eligible to receive more credit. This potenti ally r educes climate transition risk for the national agribusiness sector, while allowing the sector to embrace the opportunities (Sintropica 2021). In the Brazilian Congress, several proposals were under discussion in the early 2020s to establish a regulated carbon market. Previously, there was a carbon market regulation bill draft that suggested 20% of the total credits for emission offsetting must come from the voluntary market, creating a positive outlook for v oluntary p rojects (see Brazilian Senate Bill No. 412/2022). However, when the bill was forwarded to the Chamber of Deputies, it was replaced by another bill (Bill No. 182/2024), enacted as Law 15.042/2024. The recently enacted Law 15.042/2024 establishes comprehensive interoperability between Brazil's voluntary andregulated carbon markets. This integration mechanism operates through the accreditation of methodologies by the governing body of the Brazilian Gr eenhouse Ga s Emissions Trading System (SBCE), provided they comply with either the law’s stipulated requirements or future regulations issued by the SBCE. Consequently, any voluntary market credits certified underthese approved standards become eligible for submission and conversion within Brazil’scompliance market, creating synergistic acceleration across both market segments whilemaintaining rigorous environmental integrity standards. This legisla tive f ramework positions Brazil at the forefront of carbon market innovation by bridging voluntary action with regulated climate obligations. Climate Foresight: Transforming the Voluntary Carbon Markets, by Roger Spitz & James Balzer 24 © Disruptive Futures Institute, March 2025

Climate Foresight 2025