Key Impact Points:
- Federal prosecutors argue the $180M deal violates Indigenous rights and Brazilian law on carbon credit pre-sales.
- The project, backed by Amazon and the LEAF Coalition, was one of the world’s first state-level carbon credit schemes.
- Para, host of COP30, faces mounting scrutiny over consultation and transparency with traditional communities.
Brazil’s Landmark Carbon Credit Deal Faces Legal Challenge
Federal prosecutors in Brazil have filed a lawsuit seeking to annul a $180 million carbon offset deal signed in 2023 by the state of Para. The agreement, part of the LEAF Coalition initiative, was designed to conserve the Amazon rainforest through the sale of jurisdictional carbon credits to corporations and governments.
High-Profile Buyers, High Stakes
Among the buyers were Amazon.com Inc. and at least five other companies that had agreed to purchase up to 12 million credits at $15 each. The deal aimed to prevent deforestation through 2026, with funds supporting conservation efforts across Para.
The LEAF Coalition — co-founded by Amazon, the U.S., and the U.K. in 2021 — seeks to scale credible forest protection efforts by backing jurisdictional (state- or national-level) carbon markets.
Prosecutors Cite Legal and Human Rights Concerns
In their filing, prosecutors claim the state failed to meet legal obligations:
“The state government had failed to inform and consult traditional communities that would be impacted by the deal,” the lawsuit states.
They also argue that Brazilian law does not allow for the pre-sale of carbon credits and accuse the state of hastily approving the plan under pressure from the upcoming COP30 climate summit, which will be hosted in Para.
Prosecutors say the move “generated considerable pressure on Indigenous peoples and traditional communities in Para.”
Para Responds to Allegations
The Para state government dismissed the accusations, stating it is organizing 47 consultations with potentially impacted communities and emphasized:
“Any sales will only be finalized when emission reductions are verified and credits are formally issued.”
Participation in the consultations is not mandatory, the government added.
Implications for Global Carbon Markets
The Para initiative was seen as a flagship for jurisdictional carbon markets — a model praised for addressing credibility issues in smaller, private projects. If halted, the lawsuit could cast doubt on similar government-led schemes and shake confidence in carbon markets globally.
Emergent, the nonprofit coordinating the LEAF Coalition, did not immediately respond to requests for comment.
Follow SDG News on LinkedIn
