Unlocking Project Success: New Ordinance from the Ministry of Environment and Climate Change Sets Criteria for Conservation Units – Insights from Demarest

On January 24, 2025, the Ministry of the Environment and Climate Change (MMA) introduced Normative Ordinance No. 1,298. This ordinance defines how to classify, approve, and monitor projects in conservation units. The MMA, along with the Protected Areas Department (DAP), oversees these approvals.

The goal of this ordinance is to simplify the process for issuing incentivized and infrastructure debentures. This aims to promote sustainable infrastructure projects and environmental recovery in various protected areas across Brazil. Projects eligible for these funding mechanisms include:

• Initiatives in public use areas, forest management, or native vegetation recovery.
• Expansion or modernization of necessary infrastructure.
• Projects led by legal entities categorized as Special Purpose Entities (SPVs), which must either manage public services related to sustainable forest management or hold authorization for establishing Private Natural Heritage Reserves (RPPNs).

Normative Ordinance No. 1,298 is groundbreaking. It is the first to create classifications for priority projects in forest management and conservation. It allows private reserves to attract investments, benefiting not only concession and permit projects but also those related to sustainable tourism.

Notably, the classification of projects in conservation units now doesn’t require prior approval from the ministry. Instead, this process begins with submitting the relevant documentation.

Monitoring and Compliance

To ensure projects stay on track, issuers must provide annual updates to the MMA within 30 days of project documentation submission. If changes occur in the project’s purpose or timeline, the issuer must inform the MMA to amend the project accordingly.

Impact Expectations

This ordinance is a major step towards restoring native vegetation, particularly in degraded areas. It came after the publication of Decree No. 11,964 in March 2024, which tasked sector ministries with defining additional conditions for priority projects. These new rules promise more efficiency and transparency in financing, enhancing conservation efforts across Brazil.

Classification Process

Here’s an overview of the steps to classify a project:

Step I – Filing

The issuer must submit essential documents via the digital protocol on the gov.br portal. Key documents include:

• An application form with details about the project and issuer.
• Registered articles of incorporation, showing the latest updates.
• Proof of registration and status with the CNPJ for involved entities.
• An executive summary revealing project purpose, expected benefits, timelines, and financial needs.

Step II – Certification

The MMA will confirm that all required documentation has been submitted by the issuer.

Step III – Adjusting Inconsistencies

If any inconsistencies are identified, the DAP will ask the issuer to correct these within a given timeframe. If not resolved, the case will be escalated to relevant federal bodies.

For more details on Normative Ordinance No. 128, check out the full text here.

Demarest’s various teams continue to watch for updates in this area and are ready to assist with any inquiries related to these developments.