The Brazilian Carbon Market (MBRE) is a joint initiative by BM&F and the Brazilian Ministry of Development, Industry and Foreign Trade (MDIC), whose main objective is to develop an efficient trading system for environmental certificates aligned with the principles underlying the Kyoto Protocol. More precisely, the BM&F/MDIC initiative aspires to lay the foundation for a solid and active carbon market in Brazil, which can become a benchmark for participants of this market around the world.



BM&F Carbon Facility

Launched in mid-September 2005, the first stage of the Brazilian Carbon Market was the implementation of the BM&F Carbon Facility, which hosts the registration of projects validated by Designated Operational Entities (UN-recognized certifying agencies) according to the Clean Development Mechanism (CDM) criteria. The aim of these projects is to generate Certified Emission Reductions (carbon credits). Furthermore, the BM&F Carbon Facility also hosts the registration of the so-called project idea notes, which are partially structured GHG emission reduction proposals which hope to obtain the future condition of validated projects within the scope of the CDM.

Participants who have registered their CDM projects and project idea notes in the BM&F Carbon Facility system find it to be an extremely powerful promotional tool and an attractive alternative for interested parties wishing to provide funding or trade the carbon credits associated with these projects. In this regard, the BM&F Carbon Facility is also open to expression of interest registrations, whereby foreign investors intending to purchase carbon credits can register their interest at the Exchange by describing the characteristics of the project-based activities they seek.



BM&F Carbon Credit Auction System

The second stage of the organization of the Brazilian Carbon Market entails the development and setup of a Web-based electronic trading platform for carbon credit auctions. With its launch provisioned for 2007, this system will enable the trading of carbon credits generated by the CDM projects. A specific forward market environment will also be implemented for trading carbon credits which are still in the process of generation and certification.

Carbon credit auctions will be scheduled by BM&F in accordance with the demand from the CDM project applicants, and they will be accessible via the Internet by all qualified participants of the global carbon market. These Web-based auctions will follow the international procedures of this market and will always focus on meeting the needs of the participants.

By way of its electronic trading platform for carbon credits, BM&F intends to offer the participants an attractive, reliable, cost-effective trading environment which will enable them to close deals at competitive prices.