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An overview of how Brazil’s forest-based carbon projects are shaping global climate action and the challenges ahead.
July 10, 2025 | By Gabriel Reis
July 10, 2025
By Gabriel Reis
As global demand for high-integrity, nature-based solutions accelerates, Brazil’s forest carbon initiatives are gaining traction as a climate-positive investment frontier. Trailing only Russia in forest cover and with a rapidly expanding portfolio of carbon projects, the country is uniquely positioned to deliver scalable and verifiable climate benefits while generating sustainable value for rural areas.
Nature-based solutions (NBS) are broadly recognized as the most cost-effective pathway to climate mitigation. Within this ecosystem, forest carbon offsets stand out for their potential to deliver measurable emissions removals alongside several biodiversity and community driven co-benefits. Tropical forest nations, such as Brazil, are central to these efforts, offering both sizable forest cover and the institutional depth needed to scale impact.
Brazil’s active forest carbon engagement currently covers 3.4 million hectares (ha) and is heavily concentrated in the states that house the Brazilian Amazon, reflecting its vital role in the country’s climate mitigation strategy. As of early 2025, over 3.0 million ha of the Brazilian Amazon alone are committed to active forest-based carbon projects. An additional 7.8 million ha of REDD+ and other avoided deforestation projects are currently under development in that biome, representing areas that could eventually be incorporated into the active carbon project total, pending successful implementation[1].
The state of Pará has emerged as the clear leader in terms of regional area commitment, with approximately 1.3 million ha enrolled in active carbon-focused forest initiatives. This is nearly 50% higher than Rondônia, the next most active state in that list.
Beyond the Amazon, land managers in other biomes are beginning to engage. The Brazilian Midwest (i.e., Mato Grosso, Mato Grosso do Sul and Goiás) has a modest aggregated area of 235 thousand ha of active forest-based carbon projects, primarily under REDD+ protocols. Although critically important for climate and biodiversity, this area is dwarfed by the Midwest’s position as the nation’s deforestation hotspot, with a combined deforested area of 43 million ha from 1985 through 2023 [2]. That contrast emphasizes the potential for carbon finance to support ecological restoration and sustainable use of land in the region.
Deforestation is also not the only issue faced by the country on that front, as other challenges like a complex land tenure system and policy uncertainty are commonplace across many states in Brazil and could potentially exert a limiting effect on the expansion rate of forest carbon projects. This is particularly important for projects backed by foreign investors, who are often either hesitant to invest or have to resort to convoluted investment structures to enable capital allocation into timberlands in Brazil. Still, the climate and financial benefits of forest-based carbon projects established in the region are attractive, driving interest from well beyond the pulp and paper industry to invest into the country’s forestlands.
While Brazil has seen a steady expansion in carbon forestry, issuance volumes have grown at a much slower and linear pace. In the last decade, forestland areas now committed to active carbon projects grew at an annual rate of 19%, while their corresponding credit issuances grew at a much slower 7%, reaching a total of 81 million forest-based carbon credits by the end of 2024.
A range of internal and external challenges is contributing to this scenario. Forest-based carbon protocols often require multiple years of monitoring before credits can be verified and issued. Delays in project validation, frequent methodology changes, and limited capacity among developers and registries lead to issuance delays. This underscores the urgent need to strengthen the country’s carbon market infrastructure through more streamlined and efficient crediting systems that can reliably translate area commitments into verified offsets.
But rather than a setback, this should be perceived as a call to action. Strengthening Brazil’s carbon market infrastructure through improvements in monitoring, reporting and verification (MRV) efficiency and material policy developments will be key to unlocking the full potential of Brazil’s carbon offset industry. Ongoing initiatives like the discussions around the upcoming Brazilian Emissions Trading System hint at a combined national effort toward a stronger framework, potentially leading to a more fluid and reliable flow of carbon credit issuances.
Looking ahead, Brazil’s vast landscapes, proven technical capacity, and growing roster of carbon project developers create a strong synergy for the scaling up of the forest carbon initiatives.
The country’s combined efforts on climate-positive actions, which are beneficial for both rural communities and biodiversity, have the potential to position the country as the global benchmark for nature-based solutions for mitigating climate change.
[1] Accounting for credits issued with Verra, American Carbon Registry and Gold Standard by the end of 2024.
[2] Source: MapBiomas