Controversy Looms Over $180 Million Amazon Carbon Offset Scheme

Brazilian prosecutors are challenging a $180 million carbon offset scheme by the state of Para and a coalition of corporations and governments, citing lack of consultation with communities and legal violations. The initiative, part of the LEAF Coalition, aims to preserve the Amazon rainforest by selling carbon credits.

Brazilian prosecutors are seeking to invalidate a $180 million carbon offset agreement involving the conservation of the Amazon rainforest. The state of Para signed the deal last year with a coalition of major corporations and foreign governments. This legal action could impact the carbon credit market, which is under scrutiny for addressing fraud concerns.

Amazon.com Inc and several other companies had committed to buying credits through the LEAF Coalition, an initiative founded in 2021 by an assortment of firms and governments. Para aimed to sell up to 12 million credits, each valued at $15, representing carbon storage in trees that the project planned to preserve through 2026.

Prosecutors argue that Para's state government failed to adequately consult with traditional communities impacted by the deal and claim that Brazilian law prohibits pre-sales of carbon credits. Meanwhile, Para's government plans consultations with the affected communities before finalizing any sales, ensuring emission reductions are verified and credits formally issued.

(With inputs from agencies.)