Brazil’s ETS is the country’s regulated carbon market. This guide covers everything your company needs to know: how it works, who must comply, the implementation timeline, penalties, MRV (measurement, reporting, and verification), and how to automate compliance with AI.
Brazil’s ETS is the country’s regulated carbon market, created by Law No. 15,042/2024. It covers installations that emit more than 10,000 tCO2e per year and requires companies to monitor, report, and verify their greenhouse gas emissions. With it, Brazil joins the growing number of jurisdictions that put a price on carbon.
Under Ordinance SEMC/MF No. 3,199/2026, MRV obligations start in three phases. Phase 1 (monitoring plan in 2027): aluminium, integrated iron and steel mills, cement, oil and gas exploration and production, eight chemical products (such as ammonia, ethylene and nitric acid), iron ore and bauxite mining, pulp and paper, and glass. Phase 2 (by 2029): ceramics, semi-integrated steel mills, other chemicals, food and beverages, other minerals, oil refining and the power sector. Phase 3 (by 2031): waterway, rail and road transport. Installations above 10,000 tCO2e per year must monitor and report; above 25,000 tCO2e per year, they must also surrender allowances.
Phases set by law: regulation (12 months, extendable by 12); one year to set up reporting; two years of monitoring plans and emission reports only; first allowance allocation and market start; then full implementation. Ordinance SEMC/MF No. 3,199, published on 29 October 2026, set the MRV calendar: in the first year of each phase, operators submit a monitoring plan; in the second, they monitor emissions; from the third, they submit a verified report on the previous year every year. The cap and allowance allocation will come with the National Allocation Plan, expected to apply from 2030.
MRV is the backbone of Brazil’s ETS. Measurement requires complete GHG inventories that follow the GHG Protocol and ISO 14064. Reporting requires periodic submissions to the regulator. Verification requires an independent audit. With Carbonova, the MRV cycle is automated: specialised AI agents collect data, build auditable inventories, and prepare reports, cutting the manual effort involved.
Non-compliance with Brazil’s ETS can lead to significant fines, operational restrictions, and reputational damage. Beyond direct penalties, non-compliant companies face barriers in public tenders, harder access to green finance, and the risk of exclusion from international supply chains that require climate compliance.
CarbonOS supports Brazil’s ETS end to end: automatic data ingestion via APIs, a continuous GHG inventory, real-time regulatory monitoring, cap-and-trade scenario simulation, audit-ready reports aligned with ISSB and CSRD, and an integrated Trading Desk for allowances and carbon credits. Book a demo to see how AI can prepare your company for Brazil’s ETS.
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