Carbon with clear rules

Paraguay implements new legal framework for carbon credits.

By Tania Villagra

CMC supports the development of the Paraguayan carbon credit market in accordance with the new legal framework. Paraguay begins a new chapter in its climate strategy with the implementation of Decree No. 3369/25, which regulates Law No. 7190/23 "On Carbon Credits." This legislation establishes clear rules, provides legal certainty, and opens up a range of economic, social, and environmental opportunities for the country.

At the Carbon Market Coalition (CMC), we celebrate this milestone and position ourselves as a strategic player in the construction of the carbon market, coordinating the various stakeholders who wish to harness its potential and positioning Paraguay as a benchmark for sustainable development with its own identity.

This market not only impacts the capture, reduction, and elimination of greenhouse gases (GHGs), but also, through the implementation of projects, can benefit various sectors of the Paraguayan economy.

Through a legal framework that establishes a solid structure for the development of projects that generate measurable and verifiable carbon credits applicable to sectors such as energy, transportation, waste, industrial, forestry, and agriculture. Key points include:

- The identification of the parties involved in the different phases and operations carried out in the carbon market, such as: administrators of a carbon standard, project developer, project owner, and carbon credit purchaser (Art. 2 of the Law).

- A clear definition of credit ownership: the owner of the carbon credits generated by a project will be the project's owner, whether a natural person or legal entity, or a public, private, or mixed legal structure (Article 3 of the Law).

- The creation of a National Public Registry: which makes it possible to register projects, credits, transfers, certifications, and emissions traceability, ensuring transparency and avoiding double accounting (Art. 12 of the Law).

- Recognition of international standards: MADES may fully or partially approve the methodologies of Carbon Standard Administrators, taking into account environmental, social, and legal safeguards related to Paraguay (Art. 23 of the Regulatory Decree).

- Incentives for vulnerable stakeholders: projects owned by indigenous communities will be exempt from paying royalties (Art. 16 of the Law).

- The establishment of a technical oversight and supervision body: the Carbon Markets Directorate (DMC) is created within the Ministry of Environment and Sustainable Development (MADES), with functions of implementation, supervision, regulation, authorization of international transactions such as Internationally Transferable Mitigation Outcomes (ITMOs) and coordination with Nationally Determined Contributions (NDCs) (Art. 3 of the Law).

- The national counterpart: In the case of Project Developers, at least 50% of the workforce involved in each project must be Paraguayan, including technical professionals (Art. 8 of the Law).

The regulations open up significant opportunities for Paraguay, promote the participation of national companies, encourage the use of clean technologies, and stimulate investment in sectors with high potential to attract private capital.

How does CMC intervene in this process?

Our role is to help ensure that this legal framework translates into concrete benefits for Paraguay. To this end, we offer:

- Technical assistance and support for project developers, companies, cooperatives, and communities.

- Multisectoral coordination with public, private, financial and international cooperation organizations.

- Training and dissemination of good practices, approved methodologies and MRV (Measurement, Reporting and Verification).

- International visibility and positioning platforms for Paraguayan players participating in the market.

Paraguay is positioning itself as a forward-thinking regional leader, prepared to compete in global markets with transparency, integrity, and a commitment to climate change. At the Carbon Market Coalition (CMC), we reaffirm our commitment to supporting, strengthening, and consolidating this new climate ecosystem, where carbon ceases to be just a challenge and becomes a true opportunity to generate value for the country.

Because today, sustainability and economic profitability no longer compete; they go hand in hand.

About Tania Villagra.

She is the General Manager of the Carbon Market Coalition (CMC). She is a lawyer and notary public, graduated from the Catholic University of Our Lady of the Assumption (UCA). She is a PhD candidate in Law from the University of Salamanca (Spain).

He holds a Master's degree in Government and Public Management from the American University (Paraguay) and a Master's degree in Prevention and Repression of Money Laundering, Tax Fraud, and Compliance from the University of Santiago de Compostela (Spain).

She is a professor at the Faculty of Law and Social Sciences of the National University of Asunción (UNA) and at the Faculty of Management of the University for the Integration of the Americas (UNIDA). She has a specialization in climate change and disaster risk management, supported by a scholarship from the Organization of American States (OAS).

Author of various national and international publications.