Brazil eyes China as carbon credit buyer ahead of potential COP31 accord

illuminem summarises for you the essential news of the day, reviewed by our editorial team. Read the full piece on Carbon Credits or enjoy below:

🗞️ Driving the news: Brazil is exploring whether China could buy its Internationally Transferred Mitigation Outcomes under Article 6, with a delegation attending talks in Wuhan from 14 to 18 September alongside Chinese and EU officials
• Brazilian officials aim to announce a bilateral framework at COP31 in Antalya, running 9 to 20 November. China currently holds no official bilateral ITMO trading agreement with any country

🔭 The context: Brazil established its emissions trading system through Law No. 15,042 in December 2024 and opened a July consultation on international transfer rules, proposing a ceiling of 50 million tonnes of CO2-equivalent for outcomes generated between 2031 and 2035
• China's national ETS covered 3,378 companies in 2025, trading 865 million tonnes of allowances worth 57.66 billion yuan
• It now spans over 60% of the country's emissions after steel, cement and primary aluminium were added

🌍 Why it matters for the planet: Every credit Brazil sells to China is a cut it can no longer count toward its own target
• The Amazon forest projects most likely to be exported are also the ones Brazil needs to meet its Paris pledge
• If those reductions turn out to be overstated — and forest carbon is the hardest kind to measure — both countries end up claiming progress that never happened

⏭️ What's next: The deal has not been finalised, as well as rules, eligible projects and transfer conditions remain unagreed
• Brazil launched the Open Coalition for Regulated Carbon Markets at COP30, with China and the EU among participants
• The Wuhan meetings are expected to advance a work plan on market compatibility covering monitoring, reporting and verification

💬 One quote: "Both the coalition and the closer relationship with China can help scale up carbon markets and unlock investment flows for Brazil as it seeks to reindustrialize around new technologies" — Ana Paula Cavalcante, Brazil's deputy secretary.

📈 One stat: A proposed 50 million tonne CO2e ceiling on Brazilian international transfers for 2031–2035.

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