Since 1850, over 145 ± 16 PgC (μ ± 1σ) has been emitted worldwide due to land-use change and deforestation. Besides industrial carbon capture and storage (CCS), storing carbon in forestry products and in regenerated forest has been recognized as a cost-effective carbon sequestration option, with an estimated worldwide sink potential of about 50–100 PgC (15–36 PgC from tropical forest alone). This paper proposes the expansion of a Brazilian integrated assessment model (MUSE-Brazil) by integrating a non-spatial biomass-growth model. The aim is to account for carbon sequestration potential from either reforestation or sugarcane expansion in abandoned agricultural lands. Modelling outputs suggest that Brazil has the potential to liberate up to 32.3 Mha of agricultural land by 2035, reaching 68.4 Mha by mid-century. If a sugarcane expansion policy is promoted, by 2050, the largest sequestration rates would come from above and below ground biomass pools; gradually releasing to the atmosphere around 1.6 PgC or 1.2% of the current Brazilian land carbon stock due to lower SOC carbon pools when turning agricultural lands into sugarcane crops. On the other hand, a reforestation-only scenario projects that by 2035 the baseline year carbon stock could be recovered and by 2050 the country’s carbon stock would have been increased by 3.2 PgC, reaching annual net sequestration rates of 0.1 PgC y−1, mainly supported by natural vegetation regeneration in the Cerrado biome.