The Executive Branch enacted the Decree that regulates the Carbon Credits Law, seeking to boost the carbon credits market in Paraguay.
On February 18, 2025, the Executive Branch published Decree 3369/2025 (the “Decree”), which regulates Law 7190/2023 on Carbon Credits (the “Law”), enacted on October 12, 2023.
The purpose of the Decree is to regulate the Law, set the competences of the Ministry of Environment and Sustainable Development (“Mades”), and establish clear rules for the operation of the Carbon Credits Registry (the “Registry”).
Regulated Issues
- Directorate of Carbon Markets (“DMC”)
The Decree creates the DMC, dependent of Mades, which will be in charge of implementing, supervising, and regulating the carbon market in Paraguay. The DMC will also be in charge of keeping the Registry and the Internationally Transferable Mitigation Outcomes (“ITMOs”) updated to generate transparent and traceable information.
- Registry
The Registry must register the data of projects that implement mitigation measures to obtain carbon credits. It will be public, of free access, and permanently updated.
- Approval of methodologies
By resolution, Mades may approve all or part of the methodologies used by the carbon standards. Once a methodology is approved, Mades shall recognize and register the projects developed under approved methodologies.
- Additionality
Additionality will be recognized for projects that have been validated under methodologies approved by Mades.
- Non-Objection Certificate
The issuance of a ‘non-objection certificate’ is foreseen, which will certify that there is no double counting of carbon credit projects, allowing access of these projects to Article 6 of the Paris Agreement for the subsequent obtaining of the letter of authorization for the transfer of ITMOs. The non-objection certificate must be issued before the registration of the project in the Registry; this aims to ensure that projects have certainty that they will be recognized by Mades before implementation.
- Letter of Authorization
The issuance of a ‘letter of authorization’ is also foreseen, which allows the transfer of ITMOs abroad and certifies that there will be no double counting of ITMOs.
Mades will issue letters of authorization provided that the process of transferring ITMOs does not jeopardize compliance with Paraguay's Nationally Determined Contributions (“NDC”).
- Determination of withholdings
Carbon credit holders shall withhold and abstain from transferring a percentage of such credits generated from the same project. The withholding may not be less than 3% or more than 10%; the percentage is to be determined by Mades according to Article 10 of the Law. This withholding obligation will only apply to the transfer of ITMOs in the regulated or compliance markets, but not to the transfer of carbon credits in the voluntary market.
- Fee for transfer, registration, and modifications
For the transfer of ITMOs, the fee to be paid to Mades will be 0.08 minimum daily wages (equivalent to approx. USD 1.08 at current exchange rates) for the first transfer of each unit, quantified in tons of CO2 equivalent. For all other procedures, the fees range from 1 to 300 minimum daily wages.
In addition, the following fees apply for:
- Registrations: i) 300 minimum daily wages for developers, ii) 150 minimum daily wages per project, iii) 20 minimum daily wages per notification of emissions, and iv) 300 minimum daily wages for certificates of non-objection, letters of authorization, and other instruments.
- Modifications: (i) 300 minimum daily wages for fundamental changes to the project, and (ii) 10 minimum daily wages for certificates of no objection, letters of authorization, and other instruments.
Carbon projects whose owners are indigenous communities will be exempt from the payment of fees.
- Penalties
Violations of the Law and the Decree will be subject to administrative summary proceedings pursuant to Law 6715/2021.
Next steps and opportunities
Mades will regulate other aspects, such as the operation of the Registry.
It is foreseen that the Law and the Decree, which will be complemented with additional regulation from Mades, will create a solid and predictable regulatory framework that will provide legal certainty for investments in the carbon credit market in Paraguay. Paraguay expects to boost the growth of the market and position the country as a relevant player in the global transition to a low-carbon economy, also providing new sources of income to productive activity in Paraguay.
For more information regarding the Decree, the Law, or other issues related to carbon credit projects, please contact Rodolfo Vouga Z. (rgvouga@vouga.com.py), Rodrigo Fernandez (rfernandez@vouga.com.py) or Diego Marecos (dmarecos@vouga.com.py).
Useful links
Article: https://www.vouga.com.py/paraguay-pionero-en-la-regulacion-de-creditos-de-carbono/
Law: https://www.bacn.gov.py/leyes-paraguayas/11986/ley-n-7190-de-los-creditos-de-carbono
Decree: https://decretos.presidencia.gov.py/api/norma/download/67b4980836ed821d050478ef
