The Latin American (LatAm) environmental commodities market is expanding rapidly, fueled by the growth of carbon credits, energy attribute certificates (EACs), and renewable fuels. As countries develop compliance and voluntary carbon markets, new opportunities arise for trading, investment, and sustainability initiatives. Regulatory shifts, corporate climate commitments, and the expansion of emissions trading systems (ETS) are driving demand, positioning LatAm as a key player in the global environmental and renewables market.
This overview will enable organizations to understand the fundamentals in the LatAm market, and how they should think about the role this market can play in their overall decarbonization strategy.
Key Environmental Commodities in Latin America
Carbon Credits
Carbon markets in LatAm are expanding rapidly, with voluntary and compliance-driven mechanisms gaining traction. Policies across Latin America are increasingly transforming voluntary carbon markets into compliance mechanisms. Mexico’s state-level carbon tax scheme, implemented in 2022, was an early step toward a hybrid model, allowing companies to use certain offset credits for compliance. In Brazil, the evolving CBIO system under the RenovaBio program supports biofuel-related carbon credits, while the country is also in the process of establishing a national cap-and-trade system—signaling a shift toward a more regulated emissions market. These examples illustrate a spectrum of carbon policy maturity in the region, from nascent trading frameworks to more established tax-based mechanisms, underscoring the region’s gradual pivot toward formalized carbon regulation. Companies operating in LatAm can leverage these credits to meet their climate goals while supporting global decarbonization efforts.
Energy Attribute Certificates
Latin America is rich in renewable energy resources, particularly wind, solar, and hydroelectric power. The growth of international renewable energy certificates (I-RECs) in the region allows organizations to certify their use of clean energy and demonstrate leadership in sustainability. With expanding renewable capacity, LatAm provides an attractive market for corporations looking to secure EACs and transition to 100% renewable energy sourcing.
Renewable Fuels, Biomethane, and Biogas Initiatives
Latin America is emerging as a hub for renewable fuels, biomethane, and biogas projects that contribute to decarbonization and circular economy strategies. Waste-to-energy initiatives, landfill gas recovery, and anaerobic digestion projects help capture methane emissions while generating renewable energy sources. These initiatives align with corporate sustainability commitments by reducing greenhouse gas emissions and supporting energy transition efforts. Companies can engage in this market by investing in bioenergy projects or purchasing-related environmental commodities.
Natural Capital Markets
With its extensive ecosystems, LatAm offers unique opportunities in nature-based solutions and natural capital investments. Conservation initiatives, sustainable agriculture, and ecosystem restoration efforts generate environmental assets that can be traded or used to fulfill corporate sustainability goals. These markets are evolving, presenting an untapped potential for companies focused on nature-based solutions.
Opportunities for Companies Operating in Latin America
Businesses operating in or sourcing from LatAm can take advantage of environmental commodities to drive sustainability and compliance strategies. Key opportunities include:
- Carbon Procurement Strategies: Purchasing carbon credits to offset operational emissions and reduce scope 3 emissions.
- Corporate Renewable Energy Procurement: Securing EACs to meet scope 2 emissions targets.
- Supply Chain Sustainability: Investing in sustainable land-use projects to help reduce scope 3 supply chain emissions.
- Regulatory Compliance: Engaging in emerging compliance carbon markets across LatAm.
A Strategic Partner
At 3Degrees, we support organizations across Latin America in navigating emerging environmental commodity markets – from carbon credits to energy attribute certificates and renewable fuels. Our experts craft tailored strategies that align with evolving regulatory landscapes, unlock value from both voluntary and compliance mechanisms, and accelerate progress toward climate and sustainability goals. If you’re interested in learning more about how your organization can include LatAm in your emissions reduction initiatives, please reach out.
