Federal prosecutors in Brazil have filed a lawsuit to cancel a $180 million carbon credit agreement between the state of Pará and an international climate finance coalition, alleging that the deal was rushed through without consulting local Indigenous and traditional communities.
The legal action, submitted this week, targets a 2024 pact signed by Pará—which covers nearly a quarter of Brazil’s Amazon region—with the LEAF Coalition. This group includes public funding from the U.S., U.K., Norway, and South Korea, alongside corporations such as Amazon and Bayer. The deal involves selling so-called REDD+ credits, which represent avoided deforestation and are meant to offset emissions.
Under the agreement, Pará committed to sell future credits at $15 per metric ton, a landmark price for a Brazilian state. But prosecutors argue that selling credits not yet generated is illegal under national law and that the state failed to secure “free, prior, and informed consent” from affected communities—a legal requirement.
“This is a premature sale that has created real problems,” said federal prosecutor Felipe de Moura Palha. “Communities are being pressured to adopt a system they don’t fully understand, without time to deliberate according to their own customs.”
The lawsuit also objects to a clause requiring Pará to compensate buyers if the deal is later voided, potentially leaving taxpayers or communities liable. Prosecutors believe the state rushed the deal to showcase climate action ahead of the COP30 summit, scheduled for November 2025 in Belém.
Indigenous leaders have voiced strong opposition. “They are selling our air, our lives, without consulting us,” said Alessandra Korap, a Munduruku leader. She questioned whether funds would reach the communities, noting ongoing crises like drought, fires, and illegal mining.
If the court sides with prosecutors, the agreement could be voided, and Pará could face 200 million reais ($35 million) in collective damages for marketing assets tied to traditional territories without proper dialogue.