On 29 October 2026, Argentina’s Senate approved a bill establishing a national regulatory framework for carbon markets, opening the way for its consideration by the Chamber of Deputies. The legislation seeks to provide legal certainty for carbon credits, facilitate their participation in international markets and attract investment into projects that reduce or remove greenhouse gas emissions. Its significance extends beyond the development of a new environmental market, however, because it addresses the legal recognition of environmental outcomes as economic assets, the authority of private certification systems and the relationship between climate commitments and commercial transactions.
The proposal represents an important development in Argentina’s environmental legislation, particularly for a country with substantial opportunities in forestry, agriculture and land management, but where the absence of a comprehensive national framework has complicated participation in certain international carbon market mechanisms. At the same time, the legislation raises questions about environmental integrity, regulatory accountability and the increasingly important role of digital technologies in determining which environmental outcomes acquire legal and economic value.
The legislation creates a framework for the ownership, registration and commercialisation of carbon credits generated by projects developed in Argentina. Its principal objective is to facilitate the participation of Argentine projects in domestic and international carbon markets while promoting environmental integrity, transparency and compliance with the country’s international climate commitments.
Importantly, the bill does not establish a mandatory emissions trading system comparable to the European Union Emissions Trading System. It does not impose emissions caps on regulated sectors or require companies to surrender allowances corresponding to their emissions. Instead, it concentrates on the recognition and commercialisation of carbon credits generated through mitigation activities, including projects involving forestry, agriculture, energy and waste management. This distinction is important because the creation of a market for credits does not necessarily establish a corresponding obligation to reduce emissions. Its environmental contribution depends on the characteristics of the projects generating those credits and on the purposes for which they are subsequently used.
One of the bill’s most significant innovations is its express recognition of carbon credits as intangible assets with independent economic and legal value, distinguishable from the land, natural resources or activities from which they originate. A carbon credit is defined as an instrument issued under a recognised certification standard, representing one metric tonne of carbon dioxide equivalent avoided, reduced or removed relative to an established baseline.
The legislation also distinguishes between registered ownership and the underlying economic rights associated with the credit. Registered ownership is determined by the relevant certification registry, while economic ownership depends on the applicable property rights and contractual arrangements. This distinction seeks to accommodate the participation of landowners, project developers, investors and other actors in carbon projects. It also recognises that those developing a project may not necessarily own the land or natural resources involved.
However, the recognition of carbon credits as independent intangible assets introduces legal questions concerning their transferability, use as collateral, treatment in insolvency proceedings and the consequences of subsequent changes to their certification status. The legal existence of the asset may be established through certification and registration, but its underlying environmental validity remains dependent on scientific and technical assessments that can subsequently change.
Argentina’s constitutional framework gives provinces original ownership of the natural resources within their territories, while the federal government retains responsibilities concerning minimum environmental protection standards and international climate commitments. The bill attempts to accommodate this distribution of powers by recognising the possibility of provincial and Buenos Aires City jurisdictional mitigation programmes, including initiatives involving REDD+, agriculture, land use, waste management and energy.
It also addresses the relationship between jurisdictional programmes and individual projects, recognising rights concerning participation, exclusion and the allocation of mitigation outcomes. These provisions have considerable practical importance because jurisdictional programmes may generate credits from environmental results achieved across extensive territories, while individual landowners or developers may also undertake projects within those areas.
The difficulty is that environmental outcomes are not always attributable exclusively to a particular property or economic activity. Reductions in deforestation, for example, may result from interactions between provincial regulations, public enforcement, private conservation initiatives and community land management. Consequently, the allocation of carbon credits cannot always be resolved through conventional property rights or contractual arrangements. It may also require mechanisms for determining the contribution of public policies and collective environmental management to the results being commercialised.
The legislation establishes the National Emissions Reduction Registry, ReNaRe, as a public digital platform for recording carbon projects and providing traceability. Registration is principally declarative rather than constituting a general administrative authorisation to trade credits. The framework also provides for interoperability with provincial registries, seeking to prevent double counting and unnecessary administrative duplication.
The bill incorporates requirements concerning additionality, permanence, environmental and social safeguards, and monitoring, reporting and verification, commonly known as MRV. Certification may be undertaken through recognised standards administered by public or private organisations, including foreign entities. These standards determine the methodologies through which environmental outcomes are quantified, verified and certified. The reliance on certification standards reflects the operation of international voluntary carbon markets, where private organisations have developed much of the technical infrastructure supporting credit generation. Nevertheless, it also places considerable importance on the rules governing the recognition, independence and supervision of those standards, particularly because certification decisions provide the foundation for the subsequent legal and commercial recognition of credits.
Another important component concerns the relationship between domestic carbon projects and Article 6 of the Paris Agreement. The bill distinguishes between Mitigation Contributions, which do not require corresponding adjustments and may contribute to Argentina’s national climate commitments, and Transferable Mitigation Outcome Units, which may be authorised for international use under the relevant mechanisms.
Carbon credits may generally be traded domestically or internationally without prior government authorisation. However, transfers intended for use towards another country’s nationally determined contribution, or under international mechanisms requiring authorisation and corresponding adjustments, are subject to approval by the Argentine authorities.
The legislation also establishes that such authorisations must remain compatible with Argentina’s nationally determined contribution, or NDC. This distinction is central to international carbon accounting. When a mitigation outcome is authorised for use by another country, Argentina must apply the relevant corresponding adjustment to prevent the same result from being counted towards both countries’ climate commitments. The framework consequently recognises that international transfers involve more than private commercial transactions, because they can affect the mitigation outcomes available for demonstrating compliance with national climate objectives.
The bill also seeks to integrate carbon credits into financial markets. Credits may be used as underlying assets, sources of repayment or collateral for financial instruments, including securities, investment funds, trusts and derivatives, subject to the applicable legal framework and oversight by Argentina’s National Securities Commission where public offering rules apply.
The Senate-approved framework also provides for fiscal incentives, including thirty years of stability concerning national taxation for qualifying registered projects, a zero rate of export duties on carbon credits and provisions concerning the tax treatment of international transactions. These measures are intended to encourage investment and increase the attractiveness of Argentine credits in international markets. They may also facilitate financing for projects that require substantial initial investment before generating certified mitigation outcomes.
The combined effect is to create a legal framework through which environmental results can be transformed into commercially transferable assets and subsequently incorporated into broader financial arrangements. It is precisely this relationship between environmental performance, legal recognition and financial value that raises the most significant questions about the proposed regulatory framework.
The bill addresses several sources of legal uncertainty surrounding carbon credits, but commercial certainty and environmental integrity are not interchangeable. A carbon credit does not simply represent an objectively observable quantity of carbon. It represents a claim that a particular intervention has produced an environmental result relative to an alternative scenario. For example, a forest may store substantial quantities of carbon without necessarily generating tradable credits. The creation of credits requires demonstrating that a particular activity has avoided emissions or produced removals that would not otherwise have occurred. That assessment depends on the construction of a baseline, the application of a methodology and the verification of the resulting estimate. The credit therefore incorporates assumptions about causation, additionality and future environmental conditions. Those assumptions may be scientifically justified, but they are not necessarily beyond dispute.
The law does not merely recognise a pre-existing environmental commodity. It establishes the institutional conditions under which a particular interpretation of environmental performance becomes a tradable asset. This distinction has important regulatory consequences.
A credit may be correctly registered, legally transferred and incorporated into a financial instrument while the environmental result supporting its issuance remains uncertain or subsequently proves inaccurate. Registration and transaction traceability can prevent certain forms of double counting, but they cannot independently establish whether the certified reduction or removal actually occurred.
The bill recognises fundamental integrity principles, but leaves much of their operational application to certification standards. Although public authorities retain supervisory functions, the framework does not establish a comparably detailed system of methodological oversight, corrective measures and specific administrative sanctions. This creates the possibility that the legal framework will provide stronger guarantees concerning the circulation of credits than concerning the environmental evidence supporting their existence. The consequences become particularly important when credits are incorporated into financial instruments, because uncertainty about environmental validity may subsequently affect asset valuation, contractual obligations and financial exposure.
Private certification systems play an established role in carbon markets and can contribute technical expertise, methodological development and access to international buyers. Nevertheless, their role becomes more complex when national legislation uses their certification decisions as the foundation for recognising legally transferable assets.
Certification bodies are not merely providing information to public authorities. Their methodologies can determine which activities qualify, how environmental benefits are calculated and how many credits a project can generate. These decisions can significantly influence the distribution of economic benefits between landowners, project developers, investors and public authorities. This produces a form of regulatory authority that operates through technical standards rather than conventional legislation.
The distinction between public regulation and private certification therefore becomes less straightforward. The State establishes the legal framework, but private entities may exercise substantial influence over the conditions through which economic rights arise. An effective regulatory system must address not only the independence of verifiers but also the quality of methodologies, the treatment of uncertainty, conflicts of interest and the consequences of incorrect certification.
The absence of sufficiently developed mechanisms for dealing with reversals is particularly relevant for forestry and agricultural projects. Carbon stored in vegetation or soils may return to the atmosphere through fires, droughts, deforestation or changes in land management. A credit representing such storage cannot necessarily be treated as equivalent to one representing a permanent reduction in industrial emissions. The legal framework must therefore account for differences in environmental permanence rather than relying exclusively on a common unit of measurement.
The increasing use of digital technologies introduces another dimension that receives insufficient attention in the legislation. Carbon markets increasingly depend on satellite imagery, remote sensing, environmental sensors, automated data processing and artificial intelligence to quantify and verify environmental outcomes. These technologies can improve monitoring, reduce transaction costs and facilitate the participation of projects that would otherwise face substantial technical barriers. However, their significance is not limited to operational efficiency.
Artificial intelligence can influence how environmental conditions are classified, how historical trends are interpreted, how baselines are established and how future emissions or removals are estimated. In some circumstances, algorithmic systems may contribute directly to determining how many credits a project is entitled to generate.
Consider a forestry project where machine learning models estimate carbon stocks using satellite observations, vegetation classifications and historical environmental data. The resulting assessment may depend on assumptions concerning biomass, degradation, ecological conditions and the expected development of the land in the absence of the project. Different models, datasets or methodological choices may generate significantly different estimates of the same environmental outcome. Similar concerns arise in agricultural carbon projects, particularly where models developed using data from one geographical region are applied to soils, climates or production systems with different characteristics.
The problem is not limited to isolated computational mistakes. An error embedded in a widely used algorithmic methodology may affect thousands of credits simultaneously, giving systematic inaccuracies the appearance of independently verified environmental results. When those results become the basis for issuing credits, technical decisions acquire legal and economic consequences. This represents a significant transformation in environmental governance.
Digital technologies are no longer necessarily confined to observing environmental conditions or assisting administrative decisions. They increasingly participate in the infrastructure through which environmental outcomes are established, certified and recognised as economically valuable.
The distinction between using artificial intelligence as a regulatory tool and allowing it to become part of the infrastructure through which regulatory authority is exercised becomes increasingly difficult to maintain. For that reason, effective oversight requires attention to the provenance and quality of data, methodological transparency, model validation, uncertainty assessment, independent auditing and mechanisms for reviewing disputed results. It also requires a clearer allocation of responsibility.
If credits are incorrectly issued because an automated model systematically overestimates carbon removals, responsibility cannot necessarily be resolved by identifying the registered owner or project developer. The roles of technology providers, certification bodies, independent verifiers and public authorities may all require examination. The relevant question is not whether artificial intelligence should be used in carbon markets, but how its contribution to legally consequential environmental assessments should be governed.
Other provisions illustrate the importance of integrating commercial regulation with broader environmental governance. The bill’s treatment of corresponding adjustments contains a significant technical difficulty. It refers to applying adjustments to Argentina’s national greenhouse gas inventory, whereas the accounting rules established under Article 6 of the Paris Agreement distinguish the inventory from the adjusted emissions balance used to assess progress towards the NDC. Corresponding adjustments do not alter the national inventory itself. They modify the accounting balance reflecting internationally transferred mitigation outcomes. This distinction is fundamental to the integrity of international climate accounting and should be reflected accurately in domestic legislation.
The relationship between international transfers and national climate commitments also requires careful consideration. Authorising the international use of a mitigation outcome may generate revenue for an Argentine project, but it also affects the results Argentina can count towards its own climate objectives. Consequently, such authorisations should be understood as decisions concerning national climate policy, rather than merely as administrative procedures facilitating international commerce.
Federalism introduces another difficulty, particularly concerning jurisdictional forestry programmes and the respective rights of provincial governments, landowners and Indigenous communities. The allocation of credits generated through territorially extensive programmes cannot necessarily be reduced to individual property rights, especially when the environmental outcomes depend partly on collective management and public conservation policies. The recognition of commercial rights must therefore remain compatible with existing territorial rights, environmental obligations and appropriate arrangements for participation and benefit sharing.
There is also a broader concern about the relationship between carbon credits and direct emissions reductions. A company may acquire credits while continuing to operate emissions-intensive activities. Although carbon markets can contribute to financing mitigation elsewhere, the acquisition of credits does not automatically establish that the purchaser has reduced its own environmental impact. This distinction is increasingly reflected in comparative regulation. Directive (EU) 2024/825, for example, addresses misleading environmental claims based on carbon offsetting, distinguishing actual reductions in a product’s climate impact from compensation through external projects.
From the comparison point of view, Brazil’s Law 15.042/2024 provides an important regional one. It establishes the Brazilian Greenhouse Gas Emissions Trading System while also addressing carbon credits, institutional oversight, ownership and territorial rights. Unlike the Argentine proposal, the Brazilian framework incorporates a regulated emissions trading system alongside provisions concerning voluntary credits and their potential recognition within the regulated market. It also develops more detailed rules concerning certain categories of land and the rights of Indigenous peoples and traditional communities.
The European Union’s Regulation 2024/3012 provides a different but equally relevant comparison. Its certification framework for permanent carbon removals, carbon farming and carbon storage in products establishes requirements concerning quantification, additionality, sustainability, monitoring, verification and responsibility for reversals. It also addresses the use of remote sensing and modelling while requiring environmental outcomes to be quantified through scientifically robust methodologies that account for uncertainty. Rather than assuming that certification automatically guarantees integrity, the European approach incorporates specific requirements for certification schemes and their supervision.
Neither system eliminates uncertainty, nor should their different objectives be overlooked. However, both illustrate the importance of treating the integrity of environmental outcomes as a regulatory concern in its own right, rather than merely as a technical matter delegated to certification providers.
Argentina’s proposed legislation establishes important foundations for the development of carbon markets. The recognition of credits as intangible assets, the creation of a national registry, the regulation of international transfers and the possibility of integrating credits into financial markets may all facilitate investment and improve participation in international climate finance. However, these provisions also reveal a broader tension between the legal construction of environmental assets and the governance of the scientific and technological processes through which those assets are created.
The legal framework can establish ownership, facilitate transactions and provide financial certainty. It cannot, through those mechanisms alone, guarantee that the environmental results represented by the credits are genuine, additional or sufficiently permanent. This becomes increasingly important as artificial intelligence and other digital technologies assume greater roles in producing the evidence supporting environmental certification.
The traditional distinction between environmental regulation and technical verification becomes less convincing when algorithmic systems and private methodologies participate directly in determining which environmental outcomes acquire legal and economic value. The development of carbon markets therefore requires more than the regulation of transactions. It requires institutions capable of supervising the production of environmental evidence, evaluating the reliability of certification methodologies and allocating responsibility when recognised results subsequently prove incorrect.
The central legal question is no longer simply who owns a carbon credit, but also who has the authority to determine that the credit exists, which evidence is sufficient to justify that determination and who bears responsibility when the evidence proves unreliable. Argentina’s proposed legislation brings these questions into focus, but their significance extends well beyond the country.
As carbon markets become increasingly digital, the credibility of environmental assets will depend not only on their legal recognition and commercial transferability, but also on the transparency, reliability and accountability of the scientific and technological infrastructure supporting them. A carbon credit may acquire economic value because the law recognises it. Its environmental value, however, depends on whether the processes through which that recognition occurs can be trusted.
As Europe begins 2026, the continent finds itself at a crossroads in the governance of sustainability, technology and industry. Policymakers across the European Union and the United Kingdom are increasingly embracing deregulatory reforms, promoted as necessary to enhance competitiveness, stimulate investment and ease administrative burdens on business. Yet these reforms, when examined together, reveal a structural shift away from the sustainability frameworks that have shaped corporate accountability, environmental protection and long term innovation strategies over the past decade. This shift is more than a matter of regulatory calibration, reflecting a political economy in which deregulation is treated as an end rather than a means.
