Brazil's Soy Industry Sells Its Green Credentials as Moratorium Frays

Mato Grosso's Sustainability Pitch to the World

Brazil's Mato Grosso soybean industry is trying to change the global conversation about its environmental record. On a press tour organised by the Aprosoja-MT trade association, growers such as Simone Botan, a second-generation farmer near Lucas do Rio Verde, argued that Brazilian producers are not the climate villains they are often portrayed as. Botan farms corn and soybeans on roughly 4,450 acres of her 7,660-acre property; the rest is preserved forest, and she says sustainability is a central focus.

The industry has a strong case on paper. Under Brazil's 2012 Forest Code, farmers in the Amazon biome can cultivate only 20% of their land and must keep 80% as native vegetation, while farms elsewhere must preserve 20% to 35%. Producers also need licences before clearing additional land, and IBAMA, the federal environmental agency, monitors compliance by satellite. 'Brazilian environmental policy is stricter than what we have here in the U.S.,' said Justin Kirchoff, CEO of Summit Agricultural Group.

Yet the record on the ground is more complicated. IBAMA's budget was cut by 30% between 2019 and 2022 under former President Jair Bolsonaro, and fines for illegal deforestation fell 42%, according to agency data. University of Wisconsin researcher Holly Gibbs estimates that almost a quarter of soy farms larger than 62 acres in the Amazon have been deforested illegally since 2008. Now the collapse of the voluntary soy moratorium, after major traders withdrew in January, threatens the progress that Brazil's sustainability message has been built on. The next test will come later this year, when the European Union's deforestation regulation begins to apply to large operators importing soy and other commodities.

Why the Soy Moratorium's Collapse Could Undo the Gains

The data behind the reputation gap

Industry-level data gives some support to the Brazilian argument. Agri-Footprint data shows Brazilian soybeans carry an average carbon footprint more than five times larger than U.S. beans, but the gap is driven largely by assumptions about land-use change over the past 20 years. When those assumptions are excluded, Brazilian beans show a footprint comparable to U.S. beans, and by some methodologies they look cleaner. That means demonstrated progress on deforestation is not just an environmental issue but a competitive one: if Brazil can prove its land is not being cleared for soy, its products become more attractive under carbon-focused procurement.

Why the soy moratorium mattered so much

The 2006 soy moratorium was one of the most effective tools Mato Grosso had. A 2017 University of Kansas study found deforestation in the state was five times lower between 2007 and 2014 than in the previous seven years, with the rate of forest-to-soy conversion falling from 9.4% to 3.9%. That progress is now at risk. In January, ABIOVE, whose members include ADM, Bunge, Amaggi, Cargill, Cofco, JBS and Louis Dreyfus Co., announced it would withdraw from the agreement after Mato Grosso ended a tax incentive for participants. A preliminary IPAM study estimates the move could raise deforestation by 30% by 2045. The traders say they will police their own supply chains, but University of Wisconsin researcher Lisa Rausch warns that individual monitoring without common standards sends a 'messier signal' and could be diluted to the point of having virtually no effect.

Enforcement gaps and the EU's role

The Forest Code is not being fully enforced. IBAMA head Rodrigo Agostinho has admitted the agency does not have enough people, and Rausch says many offenders still operate with impunity, using neighbouring properties to launder soy from embargoed land while contesting fines in slow courts. President Luiz Inácio Lula da Silva has pledged to end Amazon deforestation by 2030, and deforestation has fallen to its lowest level since 2014 since he took office, but Mato Grosso's own implementation gaps remain. That makes the EU deforestation regulation the most immediate external pressure. Brazil sends only about 15% of its soybean exports to the EU, but more than 50% of its soybean meal exports went to Europe in 2025, according to S&P Global. The EU rules require stringent traceability for soy, coffee, beef and other commodities, and StoneX analyst Raphael Bulascoschi said the regulation is a 'very concerning topic' for Brazilian producers over the long term.

What Buyers and Producers Should Watch in Brazil

• EU buyers should verify that Brazilian suppliers can document farm-level traceability before the deforestation regulation applies to large operators at the end of the year; more than 50% of Brazil's soybean meal exports went to Europe in 2025, so non-compliant shipments could face real disruption.
• Brazilian producers should treat the ABIOVE withdrawal as a signal to build individual compliance records — IBAMA fines fell 42% between 2019 and 2022, but satellite monitoring and AI-based enforcement are being expanded, and inspectors are focusing on priority areas.
• Traders that left the moratorium should publish the specific evidence they will accept for deforestation-free soy; otherwise, as Lisa Rausch notes, differing proof standards could dilute the commitment to nearly nothing.
• Investors and analysts should track whether deforestation levels break from recent lows and compare them to IPAM's preliminary estimate of a possible 30% increase by 2045, as well as the pace of IBAMA enforcement fines.