Carbon Credits Latin America: How Brazil and the Region's Carbon Markets Work and What to Watch

Latin America and the Caribbean produce roughly a quarter of the world's carbon credits. The region is home to nearly a quarter of active project developers globally. It hosted COP30 in Belém in November 2025. And it sits at the center of nearly every serious conversation about nature-based solutions, jurisdictional REDD+, and Article 6 implementation.

And yet — relative to that supply weight — Latin America is significantly underrepresented on the buy side, and almost invisible in the supply pool that matters most over the next 24 months: CORSIA-eligible credits with corresponding adjustments. Only 5 of the 44 active CORSIA Letters of Authorization globally come from the region. One programme in Guyana accounts for essentially all of it.

This is the central tension in the LATAM story right now. The region has the supply, the quality, and increasingly the compliance infrastructure. What it doesn't yet have is the authorization pipeline to convert that supply into the highest-value demand of the coming decade.

This article walks through how the region's carbon markets actually work — what makes them structurally distinct, how they break down country by country, why the CORSIA gap matters so much commercially, and what buyers, developers, and investors should be doing about it in 2026.

What makes Latin America's carbon market different

Before getting to the country-level detail or the commercial gaps, it's worth being precise about why Latin America behaves the way it does. Three structural features set the region apart from every other major carbon market geography — and each one shapes the rest of the story.

1. It is the world's largest nature-based supplier, with serious domestic demand.

Most regions are either supply-heavy or demand-heavy. Latin America is both. The Amazon, Cerrado, Chaco, Andes, mangroves, and Atlantic Forest collectively make the region the dominant source of REDD+, ARR, and other nature-based credits globally. At the same time, established compliance systems in Colombia, Mexico, and Chile — and the SBCE now launching in Brazil — create domestic demand from regional corporates. Crucially, the credits used for compliance are largely the same credits voluntary buyers procure. Supply and demand sit in the same pool.

2. The region has a long carbon market memory.

Latin America was deeply involved in the Kyoto-era Clean Development Mechanism (CDM). That history left institutional infrastructure that's still relevant — government bodies, registries, project developers, lawyers, and consultants who have been doing this work for two decades. Most regions are building from scratch. Latin America is updating from an existing baseline, which is sometimes a head start and sometimes a constraint.

3. Regional pride is a real commercial force. 

This is easy to underestimate from outside the region. Latin American corporates increasingly prefer to procure Latin American credits. LATAM Airlines has publicly committed to sourcing CORSIA credits from within the region. Two of the world's independent carbon standards — Cercarbono and BioCarbon — were developed in Colombia, and they are the only standards originating from the Global South. Regional supply, regional demand, and regional standards are converging in a way that has commercial implications for buyers everywhere.

"There are two carbon standards that came from Colombia, the rest of the carbon standards come from the global north. They are super proud of that. Latin American companies are trying to prioritize Latin American carbon credits — as a region, not at a country level. It's regional pride that we need to consider."  — Carmen Álvarez Campo, International Carbon Policy Lead at Sylvera.

Compliance systems across the region

That last point — supply and demand sitting in the same regional pool — only works because policy is actively connecting the two. Carbon pricing is now operating, in some form, in most of Latin America's major economies. The compliance landscape is a mix of carbon taxes (with credits accepted for compliance), emissions trading systems, and subnational instruments.

Three of these systems deserve closer attention, because they're not just policy line items — they shape how the rest of the regional market behaves. Colombia is the model. Brazil is the test case. Mexico and Chile are the contrast.

Colombia: the model the region was built on

Colombia's carbon tax allows companies to meet their obligations entirely with domestic carbon credits — originally up to 100%, currently capped at 50%, and likely heading toward 30% in coming years. That single design choice catalyzed the region's most sophisticated carbon market ecosystem.

Because credits accepted for compliance are the same Verra and Gold Standard credits voluntary buyers procure, the Colombian carbon tax drove genuine market development rather than parallel infrastructure. Project developers, intermediaries, consultancies, and academic capacity all scaled in response. South Pole's largest office outside its headquarters was in Colombia. The two carbon standards developed in the country — Cercarbono and BioCarbon — gained international recognition. And the Colombian model is now being studied and replicated. Chile is implementing a similar approach. Brazil is considering it. Singapore explicitly used Colombia as a reference when building its carbon hub strategy.

Sylvera data shows how Colombia has issued 92.6 million REDD+ credits across 69 projects and 22.1 million ARR credits across 64 projects — making it one of the most important supply countries on earth for nature-based credits. The compliance framework has helped build this supply ecosystem.

"The fact that they allowed for so many credits to be used for compliance — and these were credits that voluntary carbon market buyers also purchase — developed the sector a lot in the country. It serves as a model for other countries."  — Carmen Álvarez Campo

Brazil: SBCE and the country everyone is watching

If Colombia is the proven model, Brazil is the test of whether that model can scale to the largest economy in the region. Brazil's Sistema Brasileiro de Comércio de Emissões (SBCE) is the most consequential structural development in LATAM's carbon market in a decade. The institutional foundation is already in place — the provisional secretariat sits within the Ministry of Finance, and the Department of Market Instruments and REDD+ (Dimer) has been established to operationalize Article 6 participation.

Brazil's supply credentials are clearly significant: 148 REDD+ projects have issued 97.1 million credits, 91 hydropower projects have issued 42 million credits, and 82 landfill methane projects account for a further 77.6 million credits. Brazil, Colombia, and Peru combined have issued approximately 280 million REDD+ credits — the single largest project-type concentration in the global VCM.

But the details that matter most to buyers and developers are still unresolved: which credit types and vintages will be accepted, how the system will interact with the voluntary market, and how Article 6 corresponding adjustments will be treated. Brazil's Law 15.042 currently limits corresponding adjustments to nationally accredited methodologies, which raises real questions about scope and supply. Progress is likely to be gradual, and the implementation details will determine whether Brazil becomes a global compliance market or a domestic one with international export friction.

Mexico and Chile

While Brazil's framework is still taking shape, Mexico and Chile have been quietly operating compliance systems for years — each with a different signature. Mexico runs the region's most mature ETS, alongside a federal carbon tax and two subnational carbon taxes (Querétaro and Colima). The community is active and engaged, but the architecture has drawn criticism for the degree of overlap between instruments — clarity on how the systems interact remains a work in progress. 

Mexico’s domestic supply base is substantial: 481 IFM projects have issued 21 million credits, with a relatively high project quality across the board. 

Chile is the region's most consistent and predictable operator. The carbon tax is operational, the ETS is under development, and the policy approach is strategic and steady. For project developers and government counterparts, Chile is reliably trustworthy in a way some larger regional players are not.

Country-by-country: stars, new players, and markets in decline

Colombia, Brazil, Mexico, and Chile are the most visible compliance-led stories, but they're only four points on a much broader map. "Latin America" is shorthand for at least a dozen distinct markets at different stages of maturity — and not all of them are moving in the same direction. The framework below sorts the key players by trajectory.

The stars

• Colombia — the most developed market ecosystem in the region. Sophisticated demand, sophisticated supply, and the origin of two globally recognized standards. The carbon tax framework continues to drive innovation, and Colombian developers are increasingly exporting their expertise internationally.
• Brazil — the country everyone is watching. SBCE rollout, Dimer establishment, Amazon-scale supply, and the world's most scrutinized REDD+ portfolio. The details of how Brazil moves on Article 6 will shape regional and global markets.
• Chile — the region's most strategic and consistent policy mover. Active on Article 6.2 bilateral agreements. Reliable for both market participants and government counterparts.
• Mexico — active domestic market, ETS operational, but compliance architecture overlap creates uncertainty. The Mexico Carbon Forum is a major regional convening point.
• Peru — a pioneer on Article 6.2, among the first countries to operationalize bilateral agreements. The reference point for how host country authorization and corresponding adjustments work in practice. Peru's RENAMI framework uses independent A6 methodologies — a model worth studying.
• Guyana — currently the region's largest CORSIA-eligible supplier, almost entirely on the back of the Hess-CARICOM-backed ART TREES jurisdictional REDD+ issuance covering the country's full forest estate. Important as a supply source, but a single-programme outlier rather than a model of regional readiness.

The new players

• Paraguay — a relative newcomer making a strong, methodical entry. The country is approaching market development deliberately, with foundational regulatory work first — and is actively using carbon intelligence data to inform its strategy.
• Bolivia — historically one of Latin America's most vocal opponents of carbon markets. That is now changing. Bolivia is updating its regulatory framework and has become surprisingly active in Article 6.2 bilateral agreements. Starting from a blank page can be an advantage.
• Ecuador — constitutional provisions (Derechos de la Naturaleza) historically complicated market-based approaches, but the country is moving toward enabling frameworks for both voluntary and Article 6 participation. Growing project developer interest.
• Jamaica — developing a carbon markets regulatory framework that, if well-designed, could open Article 6 opportunities across the Caribbean.
• Dominican Republic — one to watch for a specific reason: it is widely expected to be the first country to pilot the sectoral crediting approach under Article 6.4, particularly for coal transition credits. If successful, a global proof of concept.

In decline

• Argentina — not a meaningful market participant. Institutional instability and economic volatility make regulatory consistency difficult to establish. Until the broader conditions change, significant activity is unlikely.
• Costa Rica — a long-time champion of nature-based ambition, but the current government has deprioritized carbon markets. The country's active role in shaping the regional space has diminished.

The CORSIA gap: LATAM's biggest commercial story

The framework above hints at something important. Guyana — a single country, with a single jurisdictional REDD+ programme — is the region's CORSIA story. That fact alone tells you almost everything about LATAM's commercial position in the most important demand pool of the next decade. It deserves a section of its own.

Of all carbon credits globally that meet CORSIA's technical requirements — the right standard, methodology, and vintage — only around 9% are fully eligible today. The difference is the corresponding adjustment: a host country authorization that ensures the underlying emission reduction is removed from the country's NDC accounting when the credit is sold internationally.

Latin America has roughly 25% of global supply. It should be the world's primary CORSIA supplier. It isn't. Only 5 of 44 active Letters of Authorization globally come from the region. And of the region's CORSIA-eligible supply, essentially all of it comes from a single Guyana programme — 24.96 million credits from one jurisdictional REDD+ issuance. Strip that out and LATAM's share of structural CORSIA readiness is close to zero.

The reason isn't project quality. Sylvera ratings consistently show LATAM projects above the global quality average. The reason is that the authorization process — the bridge between a high-quality credit and a CORSIA-eligible one — runs through a host country layer that the region has been slow to operationalize.

"Latin America is lagging behind on Article 6 and authorizations and corresponding adjustments — all of the things you need to play in the CORSIA market. There's big supply potential, but there's a limitation in terms of authorizations. It affects the utility of the carbon credits."  — Carmen Álvarez Campo

Three structural factors explain why the region has moved more slowly than its supply weight would suggest:

• Institutional memory and federal complexity. Latin America's deep CDM history and the federal systems of Brazil and Argentina make regulatory updating slower than regions starting from a blank page. Existing infrastructure has to be modernized, not built.
• Article 6 framework design is still evolving. Brazil's Law 15.042 limits corresponding adjustments to nationally accredited methodologies. Peru's RENAMI framework is more permissive but still being operationalized. The details determine how much LATAM supply can actually reach CORSIA.
• Sovereignty calculations. Authorization is partly a NDC trade-off: every credit authorized for international transfer is mitigation the host country can't count toward its own target. Countries are weighing credit export revenue against domestic climate ambition. That balance takes time to settle.

The commercial implication of those three factors is direct. Compliance demand is projected to overtake voluntary demand globally in 2027, with CORSIA Phase 1 compliance beginning in January 2028. Credits with corresponding adjustments will trade at premiums as supply tightens. LATAM developers and investors without LoA pathways secured will miss the premium window — even if their projects are technically among the best in the world.

The quality–price gap: why LATAM developers are leaving money on the table

The CORSIA gap is the buyer-facing version of the region's commercial story. There's a developer-facing version that runs in parallel — and it has the same root cause: the market can't yet fully see what it's looking at.

Sylvera's ratings data shows two things that should sit together but currently don't:

• LATAM has a higher proportion of high-quality projects than the global average.
• On average, each additional rating band delivers a 32% price premium.

Multiplied together, those two facts should mean LATAM developers are commanding consistent premiums on the global VCM. They aren't — at least not at the level the underlying data supports. Why?

Information asymmetry

In project types where LATAM dominates supply — REDD+ and ARR especially — quality variance is high. Without independent ratings making that variance legible, buyers can't easily distinguish a strong LATAM REDD+ project from a weaker one in the same registry, same methodology, same country. Price compresses toward the lower end.

Domestic compliance demand isn't yet quality-sensitive

Buyers under the Colombian carbon tax, Chilean ETS, and Mexican system have historically optimized for the cheapest credit that meets the technical eligibility criteria. That's natural for early-stage compliance markets, but it means LATAM developers selling primarily domestically haven't been forced to build the credibility infrastructure international premium buyers require.

The premium market is changing this

As compliance demand overtakes voluntary in 2027 and CCP, CORSIA, and SBTi standards converge into a de facto premium tier, the developers who can demonstrate both quality and eligibility will capture disproportionate value. The Colombian project development sector is already exporting this sophistication internationally — a leading indicator of where the regional opportunity sits.

A practical way to think about it: a project generating 500,000 credits annually at $10 per credit, moving up a single Sylvera rating band, could generate $1.5M+ in additional annual revenue. Quality investment is a commercial decision with a calculable return.

REDD+ and the jurisdictional shift

Both commercial gaps above — CORSIA authorization and the quality premium — converge most acutely in one project type: REDD+. Nature-based projects dominate LATAM supply, and within nature-based, REDD+ is the largest single category. 

Brazil (97.1M credits, 148 projects), Colombia (92.6M credits, 69 projects), and Peru (90.0M credits, 30 projects) together form the world's dominant REDD+ supply base — approximately 280 million credits combined.

The integrity story around REDD+ has been the dominant carbon market narrative of the past three years — baseline inflation, leakage concerns, overcrediting investigations. Latin American projects have been at the center of it.

Two structural shifts are reshaping how the region delivers REDD+ credibility — and both directly affect the value of credits already in buyers' portfolios.

Verra's VM0048

The first shift is at the methodology level. Verra's consolidated REDD methodology is now in active rollout, and VM0048 addresses many of the baseline credibility concerns raised in earlier methodologies. Projects across the region are transitioning. The methodology change matters for buyers: a project that has migrated to VM0048 carries different risk and credibility characteristics than one operating under the older approach.

Jurisdictional REDD+ (JREDD+)

The second shift is bigger and more structural. Rather than individual projects accounting for their own baselines, jurisdictional programmes set baselines at the state or country level. Sylvera has conducted pre-issuance assessments for jurisdictional programmes in Acre and Tocantins (Brazil) and Misiones (Argentina), and the region is the global testing ground for the approach.

The open question — and the one that matters most to existing buyers — is how individual REDD+ projects are accounted for inside jurisdictional programmes. "Nesting" is the term of art, and the answer determines whether existing project-level credits hold their value or face dilution as jurisdictional programmes scale. This is being worked out in real time, particularly in Brazil. Buyers holding portfolios of project-level LATAM REDD+ credits should be tracking the nesting conversation closely.

Why field data matters disproportionately in this region

Every claim above — REDD+ baseline integrity, VM0048's improvements, JREDD+ accounting, the ratings that distinguish high-quality projects from weaker ones — ultimately rests on a single technical question: how accurately do you know how much carbon is actually standing in the forest? Carbon accounting accuracy depends on biomass measurement, and that's where most of the world's data infrastructure falls short.

Most biomass datasets rely on allometric models with large uncertainties and infrequent field surveys. In a region where the dominant project types are nature-based and the dominant geographies are tropical forests, that measurement gap translates directly into ratings uncertainty.

Sylvera has invested in multi-scale lidar field data across five continents, including campaigns in Tambopata (Peru) and Chiquibul (Belize), and ongoing work in Brazil including independent assessment of forest carbon credits in the State of Acre. That field-validated grounding is what makes Sylvera's Ratings, Pre-Issuance Solution, and Biomass Atlas meaningful in a region where small measurement errors compound into large credit-quantity errors.

For developers operating in LATAM, the practical implication is that the difference between a credible biomass estimate and a contested one is increasingly the difference between a project that prices into the premium tier and one that doesn't. That technical reality sits underneath every commercial decision the next section discusses.

What to watch in the next 12 months

Everything to this point has been a diagnosis: what the region is, what's working, and what isn't. The next 12 months will determine which of those gaps narrow and which widen. Six concrete signals are worth tracking for anyone with LATAM exposure on the buy or sell side.

1. Brazil's SBCE design choices

Watch for credit type and vintage eligibility, voluntary-market interlinkages, and Article 6 treatment. Dimer's institutional pace matters as much as the legislative detail.

2. Article 6 LoA pipelines

Peru's pipeline progression, Chile's bilateral agreement activity, and Brazil's framework for international transfers are the three most important authorization streams to track.

3. The CORSIA Phase 1 supply ramp

LoA issuances accelerating in the second half of 2026 would signal regional readiness for January 2028. The opposite would mean LATAM ceding share to African and Asian competitors.

4. The jurisdictional / project-level nesting framework

Particularly in Brazil. The decisions made here will affect the value of every existing project-level REDD+ credit in the region.

5. Coal transition credits in the Dominican Republic

If the sectoral crediting pilot under Article 6.4 succeeds, it could open a new credit category with meaningful supply implications.

6. Political risk

Several countries in the region are going through political transitions, with right-of-centre governments now common across LATAM. Carbon market continuity isn't guaranteed in every jurisdiction. Project developers and investors should be modelling political risk explicitly into pricing.

"The political change the region is going through — most of the countries now with a right-wing party — can jeopardize carbon markets. They're driving a lot of demand. It's something to keep in mind."  — Carmen Álvarez Campo

Three actions for LATAM developers and investors

Watching is necessary; acting is what changes outcomes. The argument running through this article is that LATAM has the supply and the quality, but isn't yet capturing the commercial value its data supports. Three practical actions move that needle — and all three are feasible inside the next two issuance or procurement cycles.

1. Get independently rated before your next issuance cycle

Pre-Issuance assessments identify quality gaps while they can still be addressed. Rating after issuance is reactive. Rating before is investment-grade information that compounds across every credit sold.

2. Build your CORSIA and CCP eligibility path now

These are becoming pricing differentiators, not just compliance checkboxes. Engaging with host country authorization processes early — and aligning project documentation with CCP requirements — sets up the supply pathways that will matter most as Phase 1 compliance approaches.

3. Use market intelligence to set pricing expectations on actual transactions

Broker estimates compress price expectations. Independent transaction data shows what credits like yours are actually selling for, and where the quality-price relationship is heading. The data exists. It just needs to be in the room when commercial terms are negotiated.

How Sylvera supports the Latin American market

Each of those three actions — getting rated, securing eligibility pathways, anchoring pricing to real transaction data — depends on independent, verifiable data infrastructure. That's where Sylvera fits. The region's centrality to global carbon markets is reflected in the depth of Sylvera's coverage: Country Profiles for 16 LATAM countries (15 live, with Ecuador launching Q2 2026), Jurisdictional REDD+ Intel for the major host countries, multi-scale lidar field campaigns including Tambopata, Chiquibul, and ongoing work in Brazil, and 85% coverage of existing global REDD+ credits via Ratings. Specifically:

• Ratings: Independent quality assessments across carbon accounting, additionality, permanence, and co-benefits — covering 85% of existing REDD+ credits globally.
• Country Profiles: Risk, regulatory, Article 6 readiness, and supply context for 16 LATAM jurisdictions — already used by governments in the region (including Paraguay) to inform national strategy.
• Jurisdictional Intel: Pre-issuance assessments of jurisdictional REDD+ programmes, including Acre, Tocantins, and Misiones.
• Market Intelligence: Pricing, issuance, and retirement data with the CORSIA, CCP, and compliance-system tags that LATAM buyers and developers need for procurement and commercial decisions.
• Biomass Atlas: Field-validated biomass measurement infrastructure for forest carbon, with sub-10% project-area error rates for projects above 400ha.

To see how this applies to your portfolio or project pipeline, book a demo with the Sylvera team.

What’s next?

This article opened with a paradox: Latin America has roughly a quarter of global supply, above-average quality, and the institutional history to be the most consequential carbon market region in the world — yet sits with only 5 of 44 active CORSIA Letters of Authorization. Whether the region captures the role its fundamentals support, or cedes ground on Article 6 authorization to faster-moving competitors elsewhere, is the open question of 2026.

The region's structural strengths are real: dominant supply, high average quality, sophisticated compliance pioneers, and a genuine sense of regional cohesion that translates into commercial behavior. The region's structural weaknesses are also real: slow Article 6 framework development, federal complexity, and a quality-price gap that developers haven't yet fully captured. Both can be addressed. Neither resolves itself.

The buyers, developers, and investors who treat the next 24 months as preparation — building ratings infrastructure, securing authorization pathways, mapping country-level risk before the compliance demand wave hits — will be the ones holding the strongest positions when CORSIA Phase 1 begins in January 2028. The region's window to convert structural strength into commercial value is open. It won't stay open forever.

For country-level data, ratings, pricing, and Article 6 readiness intelligence across Latin America, request a Sylvera demo.