Brazil & Southern Cone - July 2026

According to data from environmental monitoring platform MapBiomas, deforestation in Brazil has been decreasing every year since the government of President Luiz Inácio Lula da Silva took office at the start of 2023. This could well be claimed as a victory for the environmental protection goals of the Lula administration. However, there are still major risks that could undermine these green goals, with a raft of potentially harmful legislation making progress in congress, as well as the continued support from authorities for controversial infrastructure projects that environmental groups have long warned could increase deforestation.   

MapBiomas, which is run by NGOs, academics, and private companies, released a report on 27 May showing that Brazil’s total deforested area in 2025 stood at 984,794 hectares (ha). This marks a 20.6% decrease compared to the 1.24m ha of land deforested in 2024. Last year was also the first in the past six years that the country’s annual deforested area fell blow 1m ha. From 2019-2022, during the presidency of far-right former president Jair Bolsonaro (2019-2023), annual deforestation in Brazil climbed from 1.22m ha in 2019 to 2.12m ha in 2022. But in 2023, the first year of the current Lula presidency, the figure dropped to 1.84m ha, before continuing to drop again in 2024 and 2025.

The country’s major biomes registered annual deforestation decreases in 2025. Brazil’s largest biome, the Amazon rainforest, registered a total deforested area of 289,478 ha, down 23.5% compared to 2024, while the woodland-savannahs of the Cerrado, the country’s second largest biome, registered 540,614 ha, down 16.9%. Meanwhile, annual deforestation in the semi-arid shrublands of the Caatinga last year totalled 128,947 ha (-25.9%); the Mata Atlântica rainforest registered 12,912 ha (-4.7%); the Pantanal wetlands registered 12,260 ha (-48.4%); and deforestation in the Pampas grasslands stood at 583 ha (-33.8%).

In its annual report, MapBiomas reiterated the long-running concerns of environmental groups over the pressure exerted by the agricultural sector on Brazil’s natural biomes. The report highlighted that over 97% of the loss of natural vegetation in the past seven years has been attributed to agriculture, with farmers often seeking to clear woodlands to expand the area used for cattle grazing or crop cultivation. In recent years, the biome that has registered the highest areas of deforestation has been the Cerrado, which spans large swathes of land in the centre of the country. Central-western states such as Mato Grosso and Goiás are also known to be major agricultural producers, with Mato Grosso often ranking as Brazil’s top producer of export crops such as soybeans.

Politicians with ties to the powerful agribusiness lobby have recently backed a raft of proposals in congress that have faced criticism from environmentalists. On 20 May the lower chamber passed several bills, including measures that could restrict the regulatory capacity of environmental oversight agencies. For example, the bill registered as PL 2564/2025 proposed limiting the authority of the federal environmental regulator (Ibama) to file injunctions against possible perpetrators of environmental infractions. Ibama currently has the right to order injunctions or restrictions on individuals or companies suspected of violating environmental protection rules if satellite imagery shows possible evidence of an infraction. However, if the bill is approved by the senate and is promulgated into law, Ibama will be allowed to file an injunction on the basis of evidence gathered by satellites only if the suspected party is given prior notice or warning.

Observatório do Clima (OC), a national network of environmental organisations, published a press release on 21 May to criticise lawmakers who backed the legislation, stating that the bills “demonstrate that there are no limits to the rural lobby’s profit-driven greed”. The statement condemned “the lawmakers’ utter disregard for the environmental commitments Brazil has made, such as achieving zero deforestation by 2030 and meeting other climate goals”. The federal government also expressed its concern over the bills.

On 20 May a government statement cited the environment minister, João Paulo Capobianco, as warning that the bills represent an “unimaginable step backward” for the country’s environmental laws, although most of his comments were milder and more conciliatory than the OC statement. He praised the agribusiness sector’s efforts to refine its production methods and develop more sustainable practices with lower carbon emissions, but he said that the bills could threaten the progress and economic activity of the sector.

However, it was not only developments in the legislature but also in the judiciary that have brought about potential environmental setbacks. On 21 May the supreme court (STF) ruled to uphold a law that reduced the size of the Jamanxim national park, a natural conservation area that had stood in the way of a controversial railway project known as ‘Ferrogrão’. The railway would connect the farming powerhouse states of central Brazil to northern ports in the state of Pará, but it would likely tear through hundreds of kilometres of Amazon rainforest, a biome which contains legally protected nature reserves including Jamanxim. In 2017 centre-right former president Michel Temer (2016-2019) promulgated a law to shrink the size of Jamanxim, which would partly facilitate the passage of the railway, but the left-wing Partido Socialismo e Liberdade (PSOL) petitioned the STF to strike down the law on the grounds that its passage did not follow the proper constitutional process.

The 2017 law did not emerge from a regular bill but was the result of a special type of decree known as a ‘medida provisória’ (MP) that Temer signed in 2016. An MP is a temporary measure that takes immediate effect but can be permanently enshrined into law with the approval of congress. PSOL argued that changes to the size of a natural conservation area should not be enacted by decree, but the STF ultimately ruled in favour of the law, with the presiding judge of the case, STF justice Alexandre de Moraes, declaring that there was no irregularity in the approval of the legislation to shrink Jamanxim.

At the time of writing, the Ferrogrão railway project has not yet received permits from the relevant regulatory authorities, but the Lula government has expressed support for the project. The environmental credentials of President Lula have also been undermined by his support for another controversial infrastructure project – the repaving of the BR-319 highway. On 27 May Lula announced that the federal government would provide R$381m (US$73m) to the project. The highway connects the northern states of Rondônia and Amazonas, but some sections of the road have fallen into disrepair and multiple governments in recent decades have sought to repave these sections.

To assuage the concerns of environmental groups that have long warned that the repaving of the road could increase deforestation risks, Lula said that the government will implement environmental safeguard measures such as monitoring the surrounding area and setting up conservation buffer zones on either side of the highway. OC released a statement on 27 May which praised the Lula government’s intentions to enact environmental protection measures but expressed concern over a potential “disconnect between the start of construction and the actual implementation of forest protection measures”. The OC statement highlighted that it would not be until 2028 that the measures are expected to be fully implemented, by which time the middle section of the road could already be fully paved and “real estate speculation and land grabbing” could also be underway in areas surrounding the highway.  

Environmental measures

President Lula signed various decrees on 10 June to facilitate environmental protection actions, such as a decree to simplify the processes for transferring funds to the state and municipal authorities in charge of forest fire responses. He also signed a decree to update guidelines on sustainable tourism activities in natural conservation areas. Aside from the decrees, Lula also announced more funding and international donations for environmental protection initiatives.

Trade tensions  

On 15 July the Office of the US Trade Representative (USTR) announced the application of 25% tariffs on many Brazilian goods, due to claims of unfair trade practices. The tariffs come from a USTR investigation into Brazil’s trade practices which was launched in July last year. The USTR flagged up concerns over digital services as well as agricultural products and timber – Brazilian exports which the US claims could be produced from materials extracted from illegally deforested land. However, the government of President Lula has rejected the claims that Brazil was failing to effectively prevent illegal deforestation.