# Will Brazil's regulated carbon market let pig iron and steel exporters reduce CBAM costs?

Canonical: https://senseible.earth/answers/brazil-carbon-market-sbce-cbam-deduction

Only once a carbon price is actually paid. Brazil's law creating its emissions trading system phases it in over several years, starting with reporting before any allowance cost. Until a producer pays for its emissions, there is nothing for the EU declarant to deduct.

## How the deduction works

Article 9 of the CBAM Regulation lets the declarant deduct the carbon price effectively paid in the country of origin for the embedded emissions, after free allocation and any rebate.

## What to do now

- Start the monitoring and reporting the Brazilian system will require; it matches what CBAM needs.
- Keep fuel, reductant and production records per installation.
- When a price applies, keep proof of payment and the share attributable to exported goods.

## What Senseible does here

Senseible reads coal, coke, gas and electricity invoices and production records into a dated, fingerprinted record per site, so the direct emissions behind each tonne can be traced to the documents. Emissions factors outside India are entered from the official source and labelled.

- [South Africa carbon tax deduction](https://senseible.earth/answers/south-africa-carbon-tax-cbam-deduction-steel)
- [Charcoal pig iron and CBAM](https://senseible.earth/answers/charcoal-pig-iron-minas-gerais-cbam-zero)
- [Brazilian pig iron buyer data](https://senseible.earth/answers/brazil-merchant-pig-iron-exporter-buyer-data)

Sources: [CBAM Regulation (EU) 2023/956, consolidated](https://eur-lex.europa.eu/eli/reg/2023/956/2025-10-20), [European Commission, CBAM legislation and guidance](https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-legislation-and-guidance_en), [UNFCCC, national inventory and NDC documents](https://unfccc.int)

Last reviewed 2026-10-21.