In return, concessionaires would be allowed to trade carbon credits tied to the growth of trees in these public lands. They could also use the carbon sequestered by the reforestation of native species to offset greenhouse gas emissions generated by other parts of their businesses.

The model is similar to one being developed by the federal government, which plans to publish calls for proposals in early 2025 for companies and organizations interested in restoring degraded areas. In the federal case, the targeted areas are in the Amazon’s “deforestation arc,” spanning the states of Acre, Amazonas, Mato Grosso, Pará, and Rondônia.

In São Paulo, the initial phase involves 60 conservation units across the state, including parks and ecological stations—covering approximately 40,000 hectares—that could be granted for reforestation projects. Among these units are the Campos do Jordão, Caverna do Diabo, Ilhabela, and Serra do Mar state parks.

On Wednesday (17), members of the state’s Investment Partnership Program (PPI), coordinated by the Secretariat for Partnerships and Investments, approved the inclusion of the project to grant conservation areas for native vegetation restoration and conservation projects. These services would be tied to the right to trade carbon credits. The inclusion in the PPI paves the way for an initial market consultation before launching a formal call for proposals. Future contracts could last up to 40 years.

“Early next year, we’ll likely launch a PMI [Request for Expressions of Interest] to hear from investors and assess their appetite for specific areas,” said Natália Resende, São Paulo’s secretary for Environment, Infrastructure, and Logistics.

“All areas are important, but we’re trying to gauge market interest to start with a successful case, so we have an example to showcase. That’s why this dialogue with the market is so important,” she explained.

“From what we’re hearing from investors, the revenue companies could generate through the carbon market would already make these projects attractive, without the state needing to provide sponsored concessions—in other words, without financial compensation from the state,” she added.

On December 12, President Lula signed Law 15,042, establishing the rules for Brazil’s regulated carbon market.

In addition to concessions, São Paulo is also advancing an initiative launched this year called Finaclima. This mechanism aims to attract private and multilateral funding for environmental projects that are not necessarily tied to carbon credit operations.

The state is ending the year with 10,391.39 hectares under reforestation, compared to 6,585.98 hectares in 2023. According to the government, this increase is due to more areas being covered by environmental recovery commitments, strengthened compensation measures, and enhanced enforcement, among other initiatives.

Whether in federal areas of the Amazon or Atlantic Forest zones, the risk of fire threatens not only parts of these biomes but also restoration projects linked to carbon.

Ms. Resende said this is a topic under discussion at the Secretariat. “The concessionaire will have some obligations, and the state might also have responsibilities, such as creating firebreaks, which we’re already doing,” she said, referring to strips of land cleared of vegetation to prevent the spread of wildfires.

Luís Fernando Guedes Pinto, executive director of the SOS Mata Atlântica Foundation, said that granting concessions for reforestation is a viable approach, though not the only one. He noted that São Paulo already has well-established experiences in granting areas for tourism.

In the context of carbon, concessions in São Paulo could offer an advantage to investors. “The cost of generating carbon credits tends to be much lower than in private areas and lower compared to heavily degraded areas. With legal certainty, this could attract many companies,” he said.