Brazilian prosecutors are seeking to annul a $180 million carbon offset scheme supporting conservation of the Amazon rainforest, which the state of Para signed last year with a coalition of major corporations and foreign governments, according to a lawsuit filed on Tuesday.
The case could be a blow to the government of Para, which is hosting this year’s United Nations climate summit, known as COP30, as well as the wider carbon credit market, which has looked to government programs as a way to address concerns about fraud and abuse.
Amazon.com Inc 
AMZN and at least five other companies had agreed to purchase the credits through the LEAF Coalition forest conservation initiative, which the e-commerce giant helped to found in 2021 with a group of other firms and governments, including the United States and United Kingdom.
The state of Para had aimed to sell up to 12 million credits at $15 each, representing the value of carbon stored in trees that the project would save from deforestation through 2026.
In the filing, prosecutors argued that the state government had failed to inform and consult traditional communities that would be impacted by the deal. They also said Brazilian law does not allow for the pre-sale of carbon credits.
Prosecutors accused the state of rushing to approve the plan “before COP30, which has generated considerable pressure on Indigenous peoples and traditional communities in Para.”
The government of Para dismissed the allegations by prosecutors, saying that it is planning 47 consultations with communities that may be affected by the project, none of which are obligated to participate.
The state government also said in a statement that any sales will only be finalized when emission reductions are verified and credits are formally issued.
Emergent, a non-profit group that coordinates the LEAF Coalition, did not immediately reply to requests for comment.
The Para state project was one of the world’s first “jurisdictional” carbon credit schemes, covering a whole state or country in order to address concerns about the impact and credibility of projects that rely on private landowners.
