Argentina’s Senate approved a bill late on Thursday that creates a national regulatory framework for carbon markets, after months of political dispute over who owns carbon credits and what rights provincial governments and landowners hold, according to Carbon Pulse. The chamber backed the text by 60 votes to 2, as reported by Carbon Herald. For developers, buyers and investors, the vote is the first formal step towards a legal basis for selling Argentine credits abroad, though the bill still has to pass the lower house.

What the Senate approved

The vote is a half-sanction (media sancion), which means the bill now moves to the Chamber of Deputies, according to Infocampo. The text creates a national registry for green projects and gives them fiscal protection, according to EconoJournal. Only the Santa Cruz senators Jose Maria Carambia and Natalia Gadano voted against, the same report says.

The chamber merged three earlier proposals into one text. They were presented by Senator Flavia Royon of Salta, by the Misiones senators Sonia Rojas Decut and Carlos Arce, and by Senator Jorge Capitanich of Chaco, according to EconoJournal.

The ownership dispute behind the vote

The political fight in the months before the vote centred on carbon credit ownership and on the rights of provinces and landowners, according to Carbon Pulse. Infocampo lists the aim of establishing clearly who holds title to carbon credits among the points highlighted in its coverage of the vote, according to Infocampo.

For developers, title is the first question in any project finance discussion. Until the final law is in force, it is not possible to say how the framework will treat claims by provinces and private landowners over the same credits. The sources available do not set out the final wording on that point, so project teams should read the enacted text before relying on it.

A framework for export, not a compliance market

Royon described the limits of the bill during the session. In her words, it does not create a mandatory compliance market in Argentina and does not intervene in voluntary markets. It does allow credits generated in the country to be sold in international regulated markets, or under mechanisms such as Article 6 of the Paris Agreement and CORSIA, which need authorisation from the country and are worth much more, according to EconoJournal.

That design points to demand outside Argentina. The senator also said the bill aims to prevent the same tonne of carbon dioxide from being counted twice. Under her description, this requires prior authorisation from Argentina and a corresponding adjustment in the accounting of the mitigation results, according to EconoJournal.

For buyers, authorisation and corresponding adjustments are the features that separate credits usable in compliance-type schemes from those that are not. They also add a state approval step that developers will need to plan for.

Fiscal stability extended to 30 years

The most concrete change made in the Senate floor vote concerns taxes. Article 14 of the original text set 10 years of fiscal stability for green projects from the moment they are entered in the National Emissions Reduction Registry (ReNaRe). The governing bloc extended that to 30 years, according to EconoJournal.

The text says fiscal stability covers all national taxes, defined as direct taxes, fees and tax contributions for which the registered beneficiaries are the taxpayers, according to the same report. The Peronist senators backed other changes proposed by La Libertad Avanza but rejected the extension to 30 years, and the opposition bloc’s own amendments to several articles were rejected by the governing bloc, according to EconoJournal.

A 30-year window is long relative to the life of most carbon projects. For investors, it reduces one layer of tax uncertainty, but it applies only to national taxes as described, and only after registration.

How big is the export opportunity?

Estimates of the prize vary by source. EconoJournal says the regulation could open a potential market of up to US$ 3900 million from the sale and export of carbon credits, according to EconoJournal. Carbon Herald’s headline frames the vote as opening the door to billions in potential exports, according to Carbon Herald. Minister Federico Sturzenegger cited a lower export estimate after the vote, according to Infocampo.

These are projections attached to a bill that has cleared only one chamber, and none of the sources shows the assumptions behind them. Readers should treat them as political and industry framing, not as a forecast of issuance.

Sturzenegger, the minister for deregulation and state transformation, said the benefit comes from freeing provinces and private actors to operate in a market from which the state had excluded them, according to Infocampo.

Which projects could qualify

The projects covered include reforestation, forest conservation, soil restoration and carbon dioxide storage and capture in oil and gas projects, among others, according to EconoJournal. The inclusion of oil and gas capture alongside nature-based activities is notable, since buyers apply different quality screens to each.

Infocampo notes that Rojas Decut’s province, Misiones, has strong potential because of its developed forestry industry, according to Infocampo. Capitanich framed the purpose differently, as becoming environmental creditors so that those who raise greenhouse gas emissions pay compensation, the same report says.

What to watch

The next step is the Chamber of Deputies. Royon argued that the bill needs to move quickly there because Argentina is falling behind by lacking a framework that lets its credits be sold in regulated markets or through mechanisms that pay better values, according to Infocampo.

Three points will decide how useful the law is in practice:

  • Whether the lower house keeps the 30-year fiscal stability clause and the ownership provisions unchanged.
  • How the authorisation process and the accounting adjustments work under the implementing rules.
  • How provinces and landowners are treated in the registry once the final text is known.

Until the law is final, buyers should treat Argentine credits as a pipeline to monitor rather than a supply to contract.