The Approval of the MERCOSUR – EU Agreement Strengthens Efforts to Curb Deforestation
Brazil
The approval of the MERCOSUR – EU agreement strengthens efforts to curb deforestation by linking trade expansion to compliance with environmental legislation. According to the Brazilian government, the 50% reduction in deforestation in the Amazon Biome and the 32.3% reduction in the Cerrado Biome over the past three years have helped to speed up the agreement. The agreement predicts the use of official data to monitor supply chains and prevent exports linked to forest loss. (Ministry of the Environment and Climate Change)
The ISS Neutral Program of the City of Rio de Janeiro, an initiative that encourages companies to neutralize their greenhouse gas emissions through the purchase of certified carbon credits, has already neutralized more than 240 tonnes of CO₂ equivalent since its launch. In the third round alone, 10 companies offset 122.9 tonnes, receiving approximately US$ 632,000 in tax credits. The initiative promotes emissions offsetting through certified carbon credits and is part of the city’s strategy to consolidate Rio de Janeiro as a hub for green investments. (City Hall of Rio de Janeiro)
In 2025, the Pantanal Biome had the smallest year-on-year increase in native vegetation loss since 2001, which reached 291.21 km², according to satellite monitoring by the Pantanal Deforestation Monitoring Program (Prodes Pantanal). This represents a 65.4% drop when compared to 2024. Most of the affected area was in the State of Mato Grosso do Sul, especially in Corumbá and Porto Murtinho. (National Institute for Space Research)
2nd Eco Invest auction allocates US$ 18.6 million to the restoration of the Atlantic Forest. Funds from the federal program will be applied to the productive restoration of approximately 4 thousand hectares of degraded pastures, using sustainable agricultural practices, socio-environmental safeguards and monitoring of greenhouse gas emissions. (National Treasury; Ministry of Finance)
The Brazilian Development Bank approved financing of US$ 176.6 million for Inpasa Agroindustrial S/A to build a corn ethanol plant in Luís Eduardo Magalhães, in the State of Bahia. Funded through the Climate Fund and the Finem credit line, the facility will have the capacity to process up to 1 million tonnes of corn per year and produce 498 million liters of ethanol, in addition to co-products such as DDGs, vegetable oil and power generation. Full operations are expected to begin in 2027. (BNDES)
The Government of the State of Rio Grande do Sul authorized the operation of a biomethane production unit in São Leopoldo city, using landfill biogas to expand renewable energy supply and contribute to greenhouse gas (GHG) emissions reduction. (Fepam; Government of Rio Grande do Sul)
Survey conducted by the Brazilian Financial and Capital Markets Association with 265 institutions shows that, although 86% of the market assigns high relevance to ESG, only 18% have fully implemented practices. Around 67% of institutions are still at early stages of maturity, concentrated in the “distant” and “initiated” profiles, with a limited focus on internal actions and little integration of ESG into business strategy. The main challenge identified is the lack of standardization and a shared understanding about sustainability, which increases the risk of greenwashing and makes it difficult to compare products and institutions. (ANBIMA)
Gerdau has joined B3’s 2026 portfolio of the Carbon Efficient Index (ICO2). The company is the only steel producer included in the index. (Gerdau)
Aon, a global insurance brokerage and risk management advisory firm (also active in rural and forestry insurance), has structured and presented in Brazil a policy proposal under which part of the premium can be paid with certified carbon credits, linking the insurance sector to both voluntary and regulated carbon markets. “The possibility of using carbon credits to pay insurance premiums is a concrete step toward a more integrated, efficient market aligned with climate challenges,” said Mateus Angelo, Head of Strategy and Broking in Brazil. (Aon Brasil)
Federal Court has suspended the environmental licenses for Solatio’s green hydrogen plant in Parnaíba, State of Piauí, following a request by Brazil’s Federal Prosecutor’s Office. The case cites serious licensing gaps, including the lack of a water-use permit and missing authorization from the National Electric Energy Agency for the project’s planned power demand. The ruling orders an immediate halt to work (revisar, checar inglês) until the company proves water availability compliance and the project’s technical feasibility. (Federal Prosecutor’s Office – Piauí)
The Government of Pará reported a 67% drop in wildfire hotspots in 2025, from 55,298 records in 2024 to 18,011 in 2025. The State Secretariat for Environment, Climate and Sustainability also cited a 91% reduction in burned areas (from 24,278 km² to 2,079 km²) and credited prevention and enforcement actions and the State Program for the Prevention and Combat of Wildfires and Forest Fires. (INPE)
The Public Prosecutor’s Office of the State of Alagoas filed a public civil action against the Utinga Leão mill seeking to halt the burning of sugarcane crops in Pilar, near a residential condominium, citing air pollution, soil degradation, biodiversity impacts, and public health risks. The prosecutor’s office says an inspection report from the Municipal Environment Secretariat found the practice unlawful and that technical requirements were not followed, including timing and minimum safety buffers. A court granted urgent relief ordering an immediate suspension of burning; the report cites a fine of US$ 9,310 per incident, capped at US$ 931,000 for noncompliance. (Public Prosecutor’s Office of the State of Alagoas)
Brazil’s National Agency of Petroleum, Natural Gas and Biofuels said that Petrobras has not yet explained the causes of a drilling-fluid leak near the Amazon River mouth in early January, and that drilling can only resume after the company submits a detailed incident report with root causes and mitigation actions for the agency’s review. Petrobras stated the drilling fluid is biodegradable, that the loss was contained and isolated, and that operations remain in safe condition. (ANP; Petrobras)
Research suggests that decades of deforestation have already reduced rainfall in the southern part of the Amazon Biome, because forest loss weakens the moisture “recycling” that helps form clouds and precipitation. Using data from 1980 to 2019, the authors estimate an 8% to 11% drop in annual rainfall in parts of the southern basin, increasing the risk of droughts, fires, and impacts on farming; the study also argues some climate models may underestimate this effect. (Nature Communications)
The Brazilian Institute of the Environment and Renewable Natural Resources, dismantled an illegal timber processing, storage and transport scheme in the State of Pará, targeting Altamira (Castelo dos Sonhos district) and Uruará. The crackdown led to over US$ 2.79 million in fines, seizure of thousands of cubic meters of timber, shutdowns of irregular facilities and demolition of clandestine structures, with indications the wood may have come from Indigenous lands and protected areas. In a joint operation with the Federal Highway Police, trucks were also intercepted on the Trans-Amazonian Highway (BR-230) carrying timber without the required environmental documentation. (Ibama)
The 12th panel of Brazil’s Federal Regional Court for the 1st Region ordered a cattle rancher to pay US$ 95.83 thousand in damages for the illegal clearing of 983 hectares of native vegetation in Alta Floresta, State of Mato Grosso, which happened between 2002 and 2006. The ruling held that collective moral damages are presumed (in re ipsa) in violations of the constitutional right to an ecologically balanced environment and also suspended the defendant’s access to tax incentives and public credit lines, to prevent public resources from financing conduct linked to environmental wrongdoing. (TRF-1)
According to Brazil’s Minister of the Environment and Climate Change, Marina Silva, the trade agreement between Mercosur and the EU is “balanced” and aligned with current environmental, social and economic challenges, reaffirming sustainability and climate commitments. She highlights a 50% drop in deforestation in the Amazon Biome and a 32.3% decline in the Cerrado Biome over the past three years, and notes that the deal includes provisions to provide information on deforestation and compliance with environmental law by exporting countries, while promoting bioeconomy products and sustainable goods. (MMA)
Latin America
NTT DATA and Carbon Real announced a partnership to speed up carbon credit certification in Latin America using “near-real-time” data. Their idea is to combine on-the-ground sensor measurements that track greenhouse gas exchanges with satellite information, to make credits in the voluntary market clearer and more trustworthy. The approach can be applied to conservation, agriculture, livestock, wetlands and mangroves, and the companies say the process could drop from several years to about 20 months, with an ambition to reduce it further. (NTT DATA; Carbon Real)
Uruguay will have five experts participating in the preparation of the Seventh Assessment Report (AR7) organized by the Intergovernmental Panel on Climate Change, the world’s leading scientific assessment on climate change. The representatives are involved across the panel’s three Working Groups: physical science, impacts and adaptation, and mitigation, strengthening the country’s contribution to evidence-based climate policymaking at the international level. (Uruguay’s Ministry of Environment)
The governor of Argentina’s Chubut province, Ignacio Torres, confirmed that the forest fire in the Puerto Patriada region has been contained following an unprecedented operation involving wildfire brigades, volunteer firefighters, and aerial support from several provinces. Rainfall helped containment efforts, but the government emphasized the decisive role of field teams. The areas of Epuyén and El Hoyo remain under monitoring, with no new active hotspots. (Government of Chubut)
According to Uruguay’s National Water Directorate, 49% of the country’s territory remains under below-normal hydrological conditions, particularly in the Santa Lucía River basin, the Atlantic watershed, and the Laguna Merín basin, a situation that has persisted for up to five months. For January and February 2026, projections indicate a 70% probability that low river flows will persist, with a gradual improvement possible only from March onward, without ruling out the continuation of the water deficit. (Dinagua; Ministry of Environment)
The Peruvian Ministry of the Environment published a draft set of guidelines for the design and operation of biodiversity credits, opening a public consultation on the topic. The proposal establishes principles, technical criteria, and safeguards to ensure environmental integrity, measurable outcomes, and benefit-sharing, while promoting innovative environmental financing mechanisms, in line with Target 19 of the Kunming–Montreal Global Biodiversity Framework. (Minam; Government of Peru)
The Ministry of Environment carried out an operation in the La Salvia–Los Quemados district, in the Dominican Republic, in the Monseñor Nouel province, to recover and protect conservation areas along the banks of the Yuna River. The action included the removal of illegal structures and fences, formal notifications to occupants, and strengthened enforcement of Law 64-00, with support from SENPA (National Environmental Protection Service) to prevent new illegal occupations. (Ministry of Environment)
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