The Federal Government enabled the issuing of “Green Rural Product Notes” by agriculture producers that conduct activities resulting in the conservation and restoration of ecosystems or reduction of greenhouse gas emissions. They seek to provide incentives for agriculture producers and companies targeting net-zero emissions.
The Federal Government, through Decree n.º 10.828/2021, enabled the issuing of “Green Rural Product Notes” (“CPR Verde”, in the Portuguese acronym), rural credit certificates (tradable bonds) issued by agriculture producers carrying activities that result in the conservation and restoration of ecosystems and reduction of greenhouse gas emissions.
According to the Ministry of Agriculture, Livestock and Supply (MAPA), the new financial instrument will provide incentives for producers to maintain the conservation of ecosystems to a higher degree, beyond the legal requirement, while contributing to the development of the carbon market, through which interested companies may achieve net-zero greenhouse gas emissions.
The CPR (provided by Law n.º 8.929/1994) is a bond that constitutes a promise of future delivery of agriculture products, which is issued by agriculture producers and producer associations and registered with financial institutions authorized to operate by the Central Bank of Brazil (BCB). Since the expansion of the CPR framework by Law n.º 13.986/2020 (see the 11th edition of the Regulatory Report), such agriculture products may include the result of activities related to the conservation and restoration of ecosystems (article 1, paragraph 2, item “II”).
The new decree enacted rules for that provision, defined as “CPR Verde” (Green CPR). So long as third-party certification of product indicators and specifications, related to the conservation and restoration of ecosystems, are provided (article 3), and other CPR requirements are met, Green CPR may be issued for activities related to native forests and their biomes that result in:
- Greenhouse gas emissions reduction;
- Forest’s carbon stock (sequestration) conservation or improvement;
- Deforestation and native vegetation degradation reduction;
- Biodiversity conservation;
- Water resources conservation;
- Soil conservation; or
- Other ecosystem benefits.
Furthermore, according to the Ministry of Economy, the new framework applies to forest concessionaires, as the Green CPR constitutes an instrument for the payment of environmental services, in line with Law n.º 12.651/2012.
