IFACC 2023 Market Report

Closing date: October 2021 Disbursed amount: No disbursements thus far. Partners: Sustainable Investment Management (SIM) , and Ecosecurities Overview: A system to promote the implementation of the Brazilian Forest Code using carbon finance to purchase Forest Reserve Credits (CRAs4) from landowners in the Amazon biome who conserve forests beyond the legal requirement. Structure and terms: The consortium raised a credit line of R$ 1 billion from international carbon traders to quickly promote the implementation of the Brazilian Forest Code through the acquisition of Forest Reserve Credits (CRAs – Cotas de Reserva Ambiental) from landowners in the Brazilian Amazon. Under the Brazilian Forest Code, landowners who conserve their forests beyond the legal requirement can sell CRAs associated with that surplus area. SIMFlor is entering into CRA agreements with landowners willing to conserve their forests for at least 30 years, and then monetize the carbon value of the avoided deforestation in the voluntary carbon markets to make payments to the landowners. Expected impact: Conservation of 500,000 ha of native vegetation, of which 100,000 hectares are of surplus legal reserves, and conservation of 300 MtCO2e of carbon stocks in these areas, of which 60 Mt CO2 is in areas of excess legal reserves. In addition, this mechanism has the potential to stimulate greater interest and scaling of the CRA mechanism in Brazil which could accelerate Forest Code compliance and Brazil’s path to zero deforestation. Scale opportunities: Launched in 2022 with R$ 1 billion, the program seeks to deploy R$ 3 billion in the coming years.2. SIMFLOR PROGRAM © Yurika Hidaka amazon 17 IFACC 2023 MARKET REPORT