The promotion of agribusiness connected to environmentally sustainable development issues gains a new instrument with the regulation of Law 8,929/94 by Decree 10,828/21 published on October 4th of this year.

The Rural Product Note (“Cédula de Produto Rural” -CPR) is a credit instrument used by rural producers to enable the production and commercialization of their products. The CPR was instituted by Law 8,929/94, and Decree 10,828/21 regulates issuances for rural products obtained through activities of conservation and recovery of native forests and their biomes, which earned it the title of Green CPR.

According to article 2, subsections I to VII, of the decree, the issuance of Green CPRs is authorized, provided that these rural products are able to reduce greenhouse gas emissions, maintain or increase forest carbon stock, reduce deforestation and degradation of native vegetation, conserve biodiversity, water resources, soil, or provide other ecosystem benefits.

The decree puts into practice the regulation provided for in article 42 of Law 13,986/20, known as the Agro Law, which, in turn, amended article 1, paragraph 2, subsection I, of Law 8,929/94. The change included the list of activities through which rural products are obtained for the issuance of CPRs. The regulation is a way to encourage the preservation of the environment in rural areas and to value sustainable practices.

According to information on the federal government’s website “the instrument will allow companies interested in mitigating their greenhouse gas emissions to acquire the securities upon the commitment of the producer to maintain the conserved area. A Green CPR connects the company that wants to be environmentally sustainable with the rural producer. Thus, at the same time that rural producers finance their activities, there is a financial incentive to preserve rural areas.

The legislation provides for other modalities of CPR. However, while in Physical CPR’s the obligation is to deliver the product and in Financial CPR’s it is to pay the amount provided for in the security, in Green CPR’s the producer commits to environmental preservation in exchange for the financial resources it needs.

Those who conserve water resources, soil, and biodiversity and reduce greenhouse gas emissions, among other benefits stipulated in article 2 of the decree, may receive financial resources to make their production viable.

According to article 3 of Decree 10,828/21, this type of CPR must be certified by a third party, to indicate and specify the rural products that back it. This certification aims to ensure the objective of environmental preservation to which the issuer of the CPR has committed itself. Thus, it seems to us that the Green CPR market will also encourage the development of environmental preservation certification activities in rural areas to back the issuance of the security.

Considering that the decree has only four articles, the expectation is that soon new information and guidelines for issuing Green CPR’s will be published. However, despite the concise regulation, the provision for this credit security represents an advance in the promotion of agribusiness in line with environmental preservation in the rural environment.