Written by Engr. Rolando de Barros Barreto, Minister of the Environment and Sustainable Development

The recent approval of the Credit Carbon Law in Paraguay is a milestone in our country’s sustainability policy. This normative seeks to incite the conservation of the environment, and economic development has the potential to impulse the nation’s growth and improve its production system.

Key Benefits of the Credit Carbon Law

Opportunity for development: Worldwide, the credit carbon represents an opportunity for Paraguay, which is rich in biodiversity and natural resources. This can translate into significant economic gains for the country.

Diversity of sectors: Credit Carbon Law encompasses a variety of sectors such as silviculture, agriculture, cattle, industries, wastes, energy, transportation, and use of products. It all allows a broad participation and diversification of incomes.

Double impact: Legislation does not contribute only to the conservation of the environment through reducing carbon dioxide emissions but also offers income opportunities to small, medium, and large producers, land owners and indigenous communities.

Respect for private property: The Credit Carbon Law has developed according to the principles of private property, free market, and national sovereignty, respecting the values enshrined in the National Constitution.

Transparent legal framework: The normative establishes a legal framework that guarantees legal security for Paraguay’s property and commercialization of credit carbon. Besides, it delimits the government’s intervention in activities related to carbon credits.

Application authority: The Ministry of Environment and Sustainable Development (MADES, by its acronym in Spanish) supervises the law, taking registry of the carbon credits generated in Paraguay and abroad to avoid duplication.

Attractive for investors: The legal security provided by the law makes Paraguay an attractive destination for investments in the credit carbon market, which can impulse the country’s economy.

General tax regime: It has not established a special tax regime for the transfer of carbon credits. It will apply the general tax regime, with the Value Added Tax (VAT) and the corresponding income tax.

Opportunities for several sectors: The Credit Carbon Law offers many opportunities for several sectors of the Paraguayan economy, promoting sustainable development and strengthening Paraguay’s position as a critical factor in sustainability policies in the region.

Impact on the conservation and sustainable development

This law will allow Paraguay to obtain funds from multinational enterprises and nations with environmental passives, adding economic value to our country’s natural resources. Besides, it will help conservation by strengthening protected wild areas and collaborating with indigenous communities to protect forests and cultures.

The obtained funds will promote the creation of employment and capacities, allowing Paraguay to continue its sustainable development.

This law puts Paraguay in a position of regional leadership in sustainability, contributing to climate action and valuing its natural capital, reducing the breach between the gas emission compensations and assuring funds to maintain the country’s natural resources.

The President of the Republic, Santiago Peña, leads this initiative that is emerging as one of the most advanced projects in the region in the field of sustainability.

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