Taxation on Decarbonization Credits under the constitutional framework introduced by the Brazilian Tax Reform

Arthur M. Ferreira Neto and Isadora Giacomini Ceretta

Chapter 14 in Frontiers in the Low-carbon Transition, 2026, pp 240-254 from Edward Elgar Publishing

Abstract: This chapter analyses the complexities surrounding the taxation of Decarbonization Credits (CBIOs), the central mechanism of Brazil's National Biofuels Policy (RenovaBio), established by Law No. 13,576/2017, in response to the international commitments made by the country under the Paris Agreement. Aiming to contribute to the debate surrounding the impact of taxation on transactions involving environmental assets, this study analyses the current tax regime applicable to CBIOs, its projected tax burden following the enactment of the Brazilian Tax Reform, and the potential impacts arising from Brazil's Carbon Market regulation (Law No. 15,042/2024). Finally, this chapter contends that the potential tax burden increase on CBIOs will undermine not only the efficacy of Brazil's primary decarbonisation policy, but also the very coherence of the Tax Reform, which enshrined environmental defence as a principle of the National Tax System.

Keywords: Decarbonisation Credits; Carbon Market; Environmental Taxation; Brazilian Tax Reform (search for similar items in EconPapers)
Date: 2026
ISBN: 9781049412115
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