Carbon Market in Latin American Livestock

On June 23, 2025 , the Global Dairy Platform (GDP) , in partnership with the Inter-American Institute for Cooperation on Agriculture (IICA) , the Global Roundtable for Sustainable Beef (GRSB) , and the Pan-American Milk Federation (FEPALE) , held the event “Unlocking the Carbon Market Potential in the Livestock Sector in Latin America” in San José, Costa Rica . The main objective was to discuss how to integrate Latin American livestock systems into carbon markets, assessing their potential size, public policies, financing mechanisms, and monitoring technologies.

Importance of Carbon Markets

Global economic transformation

The implementation of the Paris Agreement is driving an estimated $275 trillion in capital reallocation by 2050, from emissions-intensive sectors to low-emission activities. This shift creates opportunities for livestock farming, which can reduce emissions per unit of food produced and transform pastures into carbon sinks.

Article 6 Mechanisms

Article 6 of the Paris Agreement opened the way for international carbon trading and recognized Nature-Based Solutions (NBS) , such as soil carbon sequestration. Experts have highlighted the need for a two-pronged approach: generating credits for those who reduce emissions and valuing producers who already operate with low impact.

Main Themes and Challenges

Producer centrality

The speakers emphasized that the transition must be built with producers . Policies should protect farmers who have already invested in sustainable practices and promote pre-competitive alignment between countries, sharing tools and knowledge.

Monitoring, Reporting and Verification (MRV)

Most Latin American livestock farming is extensive and pasture-based , making existing MRV methodologies unsuitable. High costs, a lack of regional protocols, and project complexity hinder producer participation. Development of digital platforms and IPCC Level 2/3 protocols is recommended to reduce costs and simplify data collection.

Funding gaps

Although livestock accounts for 30 to 40% of agricultural GDP in several countries, less than 2% of global climate finance goes to the sector. Investments of US$10 to 20 billion/year are needed to adapt systems and reduce emissions. Financing instruments , guarantees, concessional credit, and aggregation models have been identified as tools to unlock resources.

Case studies and regional initiatives

Hacienda San José silvopastoral project (Colombia)

• Pasture intensification can reduce emissions from 41.6 tCO₂e to 23 tCO₂e per ton of meat, allowing us to meet the 40% growth in demand by 2050.

• The project generates up to 4 carbon credits per hectare/year , which represents 4.8 MtCO₂e over 20 years.

• Revenue from carbon credits increases the return on investment from 3.5% to 6% (assuming US$20/tCO₂e).

• Use of soil probes and remote sensing for low-cost MRV.

• Forage grass Urochloa humidicola demonstrates high potential for carbon sequestration in soil.

GANSO Program (Colombia)

• Vertical integration of the meat chain, with traceability and carbon incentives.

• The GANSO Seal of Approval encompasses 56 sustainable practices across five pillars; including pasture management, animal welfare, and environmental conservation.

• Progress until 2025: 18 workshops , 229 farms served (32,424 ha) and 23 farms certified (15,000 ha).

• Uses Verra methodologies (VM0042 and VM0047) for integrated land management and reforestation.

Sustainability in regional livestock farming

• The region is home to around 400 million head of cattle , representing 28% of the world's herd .

• The sector accounts for 46% of agricultural GDP and supports 64.5% of the rural population .

• Uniform criteria for “sustainable livestock farming” and regional sustainability indicators are still lacking.

Policies and regulation

• Proposals include integrating livestock into NDCs , voluntary market regulation, and Article 6 safeguards and grievance mechanisms.

• Financial and non-financial incentives, redirection of perverse subsidies and risk mitigation tools (guarantees, insurance, concessional credit).

• Countries such as Colombia, Costa Rica, Mexico and Brazil have already adopted Nationally Appropriate Mitigation Actions ( N AMAs) or sustainable livestock programs, such as the ABC Program for pasture recovery in Brazil.

Market size and value

• Projections indicate that the carbon market for milk production in Latin America could generate 25 to 60 million tCO₂e in credits by 2030, equivalent to up to US$6 billion per year .

• For Argentina, the potential ranges from 0.8 to 3.2 million tCO₂e , corresponding to up to US$317 million .

Recommendations

1. Methodologies and MRV adapted to the region: invest in specific protocols for extensive systems and in low-cost digital platforms to simplify data collection.

2. Innovative financing instruments: promote guarantees, concessional credit, blended finance, and payment-for-performance programs to attract investors.

3. Producer-centered policies: protect pioneers and small producers, create aggregation models (cooperatives), and ensure equitable distribution of benefits.

4. Regional cooperation: develop a common roadmap by 2025 to harmonize MRV protocols, financing strategies, and replicable project models.

5. Positive narrative and co-benefits: Communicate that livestock farming is part of the climate solution, highlighting socioeconomic and environmental benefits to attract support and funding.

Conclusion

The meeting "Unlocking the Carbon Market Potential in the Livestock Sector in Latin America" signaled a turning point for the region's livestock sector. With an integrated vision that encompasses technological innovation, financing, public policies, and social inclusion, it is possible to transform production systems into climate solutions. Case studies such as the Hacienda San José project and initiatives like the GANSO program demonstrate that it is feasible to reduce emissions, increase productivity, and improve profitability through carbon credits. To achieve this, it will be essential to align national policies, build regional capacity, and ensure that producers are at the center of the process.