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Agribusiness Environmental and Sustainability 14/01/2021

On 14 / 01 /2021, Federal Law No. 14.119 / 2021 was enacted, establishing the National Policy of Payment for Environmental Services (“PNPSA”). Besides defining the concepts and objectives for implementing the policy, the law also creates the Federal Program of Payment for Environmental Services (“PFPSA”).


The new legislation provides the following possibilities of payment for environmental services: (i) direct remuneration, monetary or not, (ii) the provision of social improvements to rural and urban communities, (iii) compensation linked to a certificate  for the reduction of emissions from deforestation and degradation, (iv) green bonds, (v) lending and (vi) the Environmental Reserve Quota (CRA) set out in the Forest Code (Federal Law No. 12,651 / 2012).


According to the new law, payment for environmental services is the voluntary transaction through which a payer of environmental services transfers financial resources or other form of remuneration to a provider of these services, under the agreed conditions. The payer for environmental services can be the government, a civil society organization or a private agent, a natural or legal person, national or international.


As to the Federal Payment for Environmental Services Program (“PFPSA”) created regarding the payment of these services by the Union, the law sets forth that the contracting of payment for environmental services under the PFPSA prioritizes the services provided by traditional communities, indigenous people, family farmers and rural family entrepreneurs , observing the ecological importance of the area.



The new law indicates the areas that can be the subject of PFPSA, such as integral protection conservation units, extractive reserves and sustainable development reserves, as well as indigenous lands, quilombola territories and other areas legitimately occupied by traditional population, upon previous consultation.



Concerning private properties, those located in rural areas registered in the Rural Environmental Registry (CAR), properties located in the urban area that are in compliance with the master plan, the Private Reserves of Natural Heritage and the areas of buffer zones and ecological corridors covered by native vegetation are are eligible to provide environmental services. The Law also rules aspects related to the eligibility of Permanent Preservation Areas, Legal Reserve areas and others under administrative limitation by the terms of environmental legislation.


The application of public funds for the payment for environmental services is prohibited when dealing with individuals and companies in noncompliance with terms of conduct adjustment or commitments signed with the competent public agencies under Law No. 7.347/1985 (Public Civil Action Law) and also when involves seized areas by the public agencies of the National Environment System.



In the sanctioned version of the Law, the provisions dealing with the institution of the National Register of Payment for Environmental Services (CNPSA), the internal governance of the PFPSA and the way of accounting for tax incentives related to the payment for environmental services were vetoed by the President of the Republic. Such vetoes are yet to be discussed by the legislative branch.



The Federal Law No. 14.119/2021 can be accessed in the following link.