Brazil has established a working group to examine the competitiveness of regulated entities under the country’s emerging emissions trading system, including carbon border adjustment mechanisms and leakage risk, through a new federal resolution, according to Carbon Pulse. For companies likely to be regulated by the SBCE and for investors in Brazilian carbon assets, the significance is direct: cost exposure, trade protection and the use of system revenues are now formal design questions with a dedicated institutional channel, rather than open political issues.
A Resolution With Dates, Legal Basis and a Fixed Clock
Resolution CTCP/SBCE No. 5 was signed on 14 October 2026 and published in an extra edition of the Diário Oficial da União on 15 October, creating the Thematic Working Group on Competitiveness Aspects of the Brazilian GHG Emissions Trading System, known as GTT Competitividade, according to Atlas Público. The act comes from the presidency of the CTCP/SBCE, the system’s permanent technical advisory committee, based on a Plenary deliberation of 28 September 2026.
The legal grounding is explicit. The published text anchors the group in Article 9, item IV of Law 15.042 of 11 December 2024, the law that created the SBCE, and in Article 2, item II, point “e” of Decree 12.768 of 5 December 2025. The preamble also cites Resolution CTCP/SBCE No. 1 of 11 May 2026.
The group’s lifespan is bounded. It will last up to one year from its first meeting, with one possible extension for an equal period if the Plenary so decides.
The Mandate Runs From Leakage to Revenue Recycling
Article 2 of the resolution lists 14 topics the group may analyze and on which it may propose recommendations. The first is regulatory and competitiveness risks faced by SBCE-regulated sectors and their domestic and exporting supply chains. The second is the risk of industrial production and associated emissions shifting to jurisdictions without equivalent carbon pricing, covering production, trade and investment decisions.
The list continues with the economic impacts of the SBCE on output, prices, employment, investment, productivity, trade and international positioning, plus the assessment of substitute goods that the system does not regulate. The group is also tasked with developing competitiveness indicators and metrics.
Two items carry direct trade policy weight. One covers measures to equalize the carbon costs of goods produced by SBCE-regulated sectors against imports from jurisdictions without equivalent pricing. Another directs the group to study the impact of international carbon pricing instruments, including border carbon adjustment mechanisms adopted by other jurisdictions, with comparative regulatory, economic and operational analysis.
The remaining mandates address interoperability with regulated carbon markets in other jurisdictions, decarbonization costs and pathways, financial instruments for decarbonization, and alternatives for allocating and recycling SBCE revenues as a competitiveness and decarbonization tool. The group recommends; it does not decide.
Coordination Sits Inside the Finance Ministry
Coordination falls to the Subsecretariat of Regulation and Methodologies of the Extraordinary Secretariat of the Carbon Market at the Ministry of Finance, which will convene meetings, define the work plan and forward reports and recommendations to the CTCP/SBCE Plenary, according to Atlas Público. The committee’s Executive Secretariat provides technical and administrative support.
Membership is open to CTCP/SBCE bodies and entities that express interest. Each may appoint one titular representative and one alternate, who must hold technical knowledge or professional experience in areas such as carbon markets, industrial competitiveness and foreign trade. Nominations must reach the Executive Secretariat within 10 days of publication, through an electronic form. Meeting quorum is an absolute majority of participants.
Why It Matters Before the System Is Fully Operational
The resolution signals where the contested design questions will be processed. Cost equalization against imports is the domestic counterpart of a border adjustment instrument, and its presence on the mandate means a Brazilian mechanism of that kind is now an analyzable option, not an excluded one. Revenue recycling is likewise framed as a competitiveness tool, which matters for regulated sectors weighing how allowance costs might be offset.
For exporters, the comparative study of foreign border mechanisms creates a channel to feed evidence about external carbon costs into SBCE design. For investors, the interoperability mandate indicates that linkage with other regulated markets is on the analytical agenda, though the resolution commits to nothing beyond study.
What to Watch
The immediate markers are procedural. The 10-day nomination window will show which committee bodies engage, and the date of the first meeting will start the one-year clock. The substantive test comes later: whether the group’s reports put concrete recommendations on cost equalization, revenue recycling and interoperability before the Plenary within that timeframe. Until then, the resolution establishes a process and a mandate, not a policy outcome.
