On July 14th, 2021, the National Bank for Economic and Social Development (BNDES) and the Energy Research Company (EPE) signed a Technical Cooperation Agreement to study the feasibility of an instrument for transferring financial resources from oil and gas companies to the preservation and restaurantion of Brazilian forests, through the issuance carbon credits. With such initiative, companies in the oil and gas sectors will have opportunities to offset their greenhouse gas emissions.
The agreement also aims at supporting the development of a set of instruments to increase the reliability and efficiency of the voluntary carbon market in Brazil. Although they focus on the oil and gas and forestry sectors, the proposals to be built may have consequences and benefits for other sectors, especially those related to water, biodiversity, erosion control and microclimate balance.
According to an EPE survey, the oil and gas sector is the third largest source of gross emissions of greenhouse gases in Brazil, behind only activities involving changes in the use of land, forests and agriculture. One of the great challenges of this industry is to reduce emissions along the production and consumption chain. Most of the expected emission reductions will come from investments in its own production units, such as energy efficiency and the injection of carbon dioxide (CO2) into the wells.
The offsetting of emissions with carbon credits will have a complementary role, especially in the short term, with benefits for the conservation and restoration of forests, and the consequent reduction in the emission of greenhouse gases, favoring the achievement of the commitments agreed by Brazil in the Paris Agreement.
The Technical Cooperation Agreement is available here, in Portuguese.
NBCC signed an MOU with EPE in 2019.
Source: Vieira Rezende Advogados
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