The importance of CPR Verde for the future of agribusiness

In a decade marked by the proliferation of sustainable investments, the Green Rural Product Certificate (CPR) emerges as a potential source of financing for the Brazilian agricultural sector. It is an instrument that aims to raise financial resources to maintain agricultural operations and, at the same time, preserve biodiversity.

Recently, Law 8.929/94 (CPR Law) underwent several changes through Law 13.986/20 (Agro Law). Among them, the inclusion of item II in §2 of art. 1st, which allowed the issuance of CPRs “related to the conservation of native forests and respective biomes and the management of native forests within the scope of the public forest concession program, or obtained in other forestry activities that may be defined by the Power Executive as environmentally sustainable”, an operation recently regulated by Decree 10.828/21.

The CPR, in its original conception, allows rural producers to capture the resources or inputs necessary to operate their harvest in exchange for part of their production. What, then, would be the role of CPR Verde? In a country like Brazil, where, in some regions, rural producers are obliged to compulsorily preserve part of their total area as a legal reserve, CPR Verde appears as an instrument to remunerate this preservation and encourage the expansion of the preserved area in exchange for capital.

With the change, there is the possibility that rural producers can be remunerated for an activity that they already carry out in strict compliance with the law – maintenance and conservation of native forest – and receive an incentive to expand this activity, which will help to mitigate environmental damage many times over. attributed to rural production. Furthermore, the measure will contribute to improving the image of Brazilian agribusiness in the domestic and foreign markets, largely attributed to deforestation.

From a financing perspective, there is no shortage of interested parties in the application and dissemination of the instrument. Companies that, due to their activity, release harmful gases into the environment will be able to use a mechanism capable of guaranteeing the necessary carbon credits to compensate for the damage they cause.

This scenario gains more strength given the commitments recently made at COP 26, such as the pact to reduce methanol gas emissions by up to 30% by 2030 and the declaration to restore and protect the planet's forests – which includes the Brazilian Amazon –, with investments estimated at US$ 19,2 billion.

There are still issues to be overcome to popularize the title, such as knowing who will be responsible for certifying the instrument, the way in which commitments signed will be monitored, the role of government institutions in its validation and how the instrument market will be regulated. Brazilian carbon credit, among other issues.

Despite all these uncertainties, there is no impediment for anyone who already wants to take advantage of the changes implemented. Environmental conservation, through the use of harvest/product monitoring techniques known on the market, may be a condition or even a guarantee for the issuance of a traditional CPR.

It is worth remembering that, in 2021, the National Policy for Payments for Environmental Services (Law 14.119/21) was established, which reinforces a more sustainable approach to environmental issues. Those who see the changes implemented in the New Agro Law as an opportunity for new business are already at the forefront of taking advantage of the benefits provided by these legal innovations.

by Joao Reis e Luis Fernando Ticianeli Ferreira; partner and lawyer in the Litigation area at Machado Meyer Advogados