To be used as collateral, the credit must have an independent certification
The transition to a low-carbon economy will require an increasing amount of long-term financing. Owners Carbon credits They can use them as collateral for financing and loans, thus expanding their access to resource sources.
The secured operation could be project financing linked to decarbonisation, but also loans or financing of any other kind, or even raising funds on the capital market, such as issuing debt securities.
A carbon credit is a tradable asset that has economic value, representing a reduction in the emission of one ton of carbon dioxide (or its equivalent in other greenhouse gases). In order to be used as collateral, it must have independent certification regarding its origin in a project that has additional benefits in relation to the current environmental situation, the so-called additionality.
Law No. 15042 of 2024 also created two types of securities that can be traded on the market and that can also serve as securities: the Brazilian Emission Quota (CBE), which represents the right to emit one ton of carbon dioxide equivalent; and the Certification of Verification of Reduction or Elimination of Emissions (CRVE), which corresponds to a carbon credit that meets certain systematic requirements for establishment, measurement and recording in a central registry.
Carbon credits have an ephemeral life: they are created with the intention of being canceled to offset emissions. This does not prevent its use as security, but requires adequate contractual provisions. For example, the obligation to register the guarantee in the central registry of the Brazilian Greenhouse Gas Emissions Trading System (SCBE) or in another registry before disbursement, in order to prevent cancellation of the asset by the debtor while the guarantee is in effect.
Collateral replacement is common in project financing and its various stages are taken into account. Projects associated with the energy transition may expect to gradually replace the guarantee on carbon credits with guarantees on project assets and revenues, thus releasing carbon credits to offset emissions generated by the project itself in the operational phase.
This can be done now, by generating carbon credits on high-quality emission reduction projects through private certification.
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