Rainforest ablaze near the Trans-Amazonian Highway, in Labrea, Amazonas state, north-west Brazil. Reuters
Rainforest ablaze near the Trans-Amazonian Highway, in Labrea, Amazonas state, north-west Brazil. Reuters
Rainforest ablaze near the Trans-Amazonian Highway, in Labrea, Amazonas state, north-west Brazil. Reuters
Rainforest ablaze near the Trans-Amazonian Highway, in Labrea, Amazonas state, north-west Brazil. Reuters

Brazil's Amazon 'emitting carbon' after worst wildfires in almost 20 years


Gillian Duncan
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Brazil’s Amazon and Pantanal wetland regions have experienced their worst wildfires in almost two decades, according to the EU’s climate change monitoring service.

Tens of thousands of fires rage around the country, around half of them in the Amazon rainforest, which is threatening the area’s vast stores of carbon and sending more of the damaging greenhouse gas into the atmosphere. About 2.4 million hectares of forests, fields and pastures in the Amazon burned between June and August.

In total, there were more than 95,000 hot spots in the Amazon biome this year to September 18, according to data from Brazil’s National Institute for Space Research (Inpe). Carbon emissions from the fires in the country’s rainforest and wetland areas have consistently been above average, breaking both national and regional records and impacting the air quality across much of South America.

The Amazon is one of the world’s most important carbon sinks, said Lucas Ferrante, a biologist and researcher at both Sao Paulo University and the Federal University of Amazonas. “Now, it is emitting carbon,” he said. “We are at a turning point.”

The phenomenon was first noted in 2021, with emissions amounting to a billion tonnes of carbon dioxide a year, making the forest a source of CO2, mainly due to fires.

Cumulative emissions so far this year reached around 183 megatonnes as of September 19, following a similar path as the previous record set in 2007. September has accounted for 65 megatonnes of the total alone, due to emissions from the Amazon region, notably the states of Amazonas and Mato Grosso do Sul, where most of the Pantanal wetlands are located and the annual cumulative total estimated carbon emissions are the highest in the 22 years.

A swathe of forest razed by fire in Guajara-Mirim State Park, in Nova Mamora, north-west Brazil. EPA
A swathe of forest razed by fire in Guajara-Mirim State Park, in Nova Mamora, north-west Brazil. EPA

Although fires are common during the country’s dry season, this year’s anomalies are a red flag for experts. “The timing of the fires and how long it is lasting is what is worrying us,” said Ritaumaria Pereira, executive director at Imazon, a nonprofit focused on research and projects in the Amazon region. “Things have gotten out of control, and the name for that is climate change.”

Bolivia has also been battling record wildfires, with carbon emissions there standing at 76 megatonnes, exceeding the previous annual high of 73 megatonnes of carbon set in 2010. September has accounted for 32 megatonnes alone. Experts say the fires have been fuelled by extremely high, long-term drought, and other climatological factors that have likely to have contributed to the greatly increased scale of the fire emissions, smoke, and air quality impacts.

“The smoke transport has had an impact far beyond the vicinity of where the fires have been burning, even reaching across the Atlantic,” said Mark Parrington, senior Scientist at the Copernicus Atmosphere Monitoring Service.

“The scale of the smoke transport and air quality impacts are an indicator of the scale and intensity of the fires. It is imperative to keep monitoring these wildfires and their emissions to track their impact on air quality and the atmosphere.”

Climatologists have warned for decades that events like this year’s would come to pass. Droughts in the last two decades have become much more severe and much more common. The last year – the hottest on record globally – brought Brazil’s extremes to a new level.

“This was always something that we know would happen,” said Michael Coe, senior scientist and tropics programme director at Massachusetts-based research organisation the Woodwell Climate Research Centre. “But there’s a huge difference between knowing that it will happen and seeing it happen.”

A firefighter tackles a rainforest blaze in Apui, Amazonas state, north-west Brazil. Reuters
A firefighter tackles a rainforest blaze in Apui, Amazonas state, north-west Brazil. Reuters

When rainforests burn, what replaces them can’t replace the carbon storage and evaporative cooling that benefits the global climate. The Amazon is a critical part of the global climate system. Without it, modelling suggests that the Earth could warm another degree Celsius on top of the already dangerous 2.7ºC or so that’s already in store. Fossil-fuel burning, deforestation and other causes have lifted the global average temperature by about 1.3C since before industrialization.

Around 40 per cent of the fire spots in Brazil are in areas of primary, or undisturbed, vegetation. The rest are mostly in deforested areas. Deforestation is lower than it has been in years past, an indication of how primed the land is to burn due to hot, dry conditions.

Ibama says almost all of the fires have been caused by humans, whether deliberately or accidentally. Burning is common in Brazilian agriculture. Historically, Brazil encouraged it as a fast, cheap way to clear land and prepare soil for new planting. The government has banned the practice, although many farmers do not obey the rule.

President Luiz Inacio Lula da Silva this week announced 514 million reais ($95 million) to fund emergency measures, including more investigations and hiring specialized firefighters.

Firefighters in the Pantanal, the world's largest wetland, in Corumba, Mato Grosso do Sul state, central-west Brazil. Reuters
Firefighters in the Pantanal, the world's largest wetland, in Corumba, Mato Grosso do Sul state, central-west Brazil. Reuters

Last year, at the start of his third term in office, he returned to the international stage promising to bolster protections for the Amazon, shield tribal lands from resource extraction and spark a green transition of Brazil’s economy. Deforestation went down and a project establishing guidelines for developing sustainable fuels was approved, marking progress toward a cleaner-energy future.

However, the crisis in the Amazon may pose a challenge when he heads to the UN General Assembly in New York on Saturday. “Lula is trying to convince the world that Brazil is a climate leader. But there’s some disconnect there in the actual actions on the ground,” said Manoela Machado, a post-doctoral researcher at Woodwell Climate Research Centre, who studies drivers of fire risk in the Amazon.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Updated: September 23, 2024, 6:19 AM