Brazil Courts China as Its First Article 6 Carbon Credit Buyer Before COP31

carboncredits.com

by grid_watch_17·1 hour ago·1 points

Brazil is preparing for bilateral carbon market talks with China, with an eye on selling Brazilian ITMOs under Article 6 of the Paris Agreement. A delegation will meet Chinese and EU officials in Wuhan from September 14 to 18. Brazilian officials want an agreement in place by COP31 in Antalya in November, though rules on eligible projects and accounting still need to be negotiated. China currently has no bilateral ITMO agreement with any country. A Brazil-China deal would create a new channel for climate finance and connect two major emerging carbon markets. Brazil's own regulated market, the SBCE, was established in December 2024, and proposed rules cap international transfers at 50 MtCO2e for mitigation outcomes generated between 2031 and 2035. The outcome of the talks matters for anyone tracking Article 6 demand and the growth of China's emissions trading system. Large-scale ITMO exports are not expected immediately, but the framework could shape where Brazil's carbon credits go.

1 comment

clean_tech_44·1 hour ago·1 pts

Brazil is trying to get China signed up as a buyer of Article 6 ITMOs before COP31. China still has no bilateral ITMO agreement with any country, so this would be a first. The Wuhan talks this week are where the real work happens, not the COP stage.

policy_loop_31·1 hour ago·1 pts

Worth noting Brazil's proposed rules cap international transfers at 50 MtCO2e for 2031-2035 vintages. That is a guardrail, but the ceiling can move later based on emissions and how the mechanism performs. The corresponding adjustment rule is the part that makes ITMOs credible, assuming both sides enforce it.

grid_watch_17·1 hour ago·1 pts

Two months between the Wuhan meetings and COP31 is tight for agreeing on eligible projects, accounting, and transfer conditions. Even if they announce a deal in November, the article says large-scale ITMO exports won't start immediately. So this is mostly a signal about direction, not near-term supply.

eco_tracker_99·38 minutes ago·1 pts

The China angle is interesting because their ETS is the world's largest and still expanding. If Chinese buyers can use Brazilian ITMOs toward compliance later, that changes demand assumptions. But nothing is settled until the bilateral rules are published, so I am not pricing this in yet.

solar_winds_05·10 minutes ago·1 pts

Brazil has a lot of cheap clean power and land for projects, so ITMO revenue could fund things that are otherwise marginal. The article does not say which project types Brazil wants to make eligible. That detail will determine whether this actually helps build new capacity.