Since 2023, Brazil has been pushing a new idea to finance the conservation of global tropical forests: Instead of directly donating money to Indigenous and conservation groups, nations and investors would add billions of dollars to a fund, the profits of which would revert to the countries that are doing a good job of keeping forests standing.

The initiative — initially called the Tropical Forest Funds Forever and now rebranded as Tropical Forest Finance Facility (TFFF either way) — was presented at the COP28 climate summit, held in Dubai in 2023, with the goal of turning it into reality at COP30, to be held in Belém, Brazil, this November. Even though it received positive feedback overall, doubts remained about whether TFFF could lock in the initial required amount of $25 billion needed for its launch and reach the $125 billion to operate as designed.

In recent months, however, Brazilian diplomats have been making progress.

In late August, nations of the Amazon Cooperation Treaty Organization (ACTO) endorsed TFFF during a meeting in Colombia’s capital, Bogotá. The joint statement presented a chapter supporting and welcoming the initiative. It also encouraged “potential investor countries, multilateral organizations, development banks, climate funds, international cooperation agencies, philanthropy, and the private sector to announce ambitious and concrete contributions to the capitalization of the TFFF, in order to ensure its prompt operationalization.”

Brazil had already secured support from Norway, the U.K., Germany, the U.S., the UAE and France, as well as several nations with tropical forests, such as Colombia, the Democratic Republic of Congo, Ghana, Indonesia and Malaysia.

In July, TFFF got significant support from the BRICS group (originally formed by Brazil, Russia, India, China and South Africa and with six more nations incorporated since 2024), when they gathered in Rio de Janeiro for the bloc’s 17th summit. The nations jointly supported the TFFF.

“We encourage potential donor countries to announce ambitious contributions to ensure the fund’s capitalization and to put it in operation promptly,” the leaders declared in the official summit statement.

One day later, at the Leaders’ Framework Declaration on Climate Finance, BRICS representatives said the TFFF plan has the potential to be a “promising mixed finance instrument, capable of generating predictable and long-term financing flows for the conservation of standing forests.”

Although dividing opinions persist, the forest-conservation effort is seen by President Luiz Inácio Lula da Silva as Brazil’s most ambitious proposal for COP30. Brazil pitches it as a tool to provide tropical forest nations with “large-scale, predictable, and performance-based payments,” rewarding protectors of tropical biomes based on the extent of their preservation, as determined by satellite monitoring. It also helps bridge the gap for climate change financing, estimated at $1.3 trillion, a deal in the Paris Agreement where nations have been struggling to find common ground in previous climate summits.

In addition to the project’s expected forthcoming returns, the TFFF is particularly meaningful for Brazil this year: Since the beginning of 2025, the largest Amazonian nation has been engulfed in environmental alerts, which include soaring criminal fire-provoked deforestation in the Amazon and the persistence of a fossil fuel-oriented agenda.

Yet, persistent doubts seem to walk hand-in-hand with Brazil’s enthusiasm, raising questions about the project’s viability — and whether Brazil will offer at the COP anything beyond statements about the tropical forest’s future.

TFFF debuts in Belém: Is this it?

To be eligible for the TFFF, participating developing countries must have an annual deforestation rate of no more than 0.5% in their tropical forests. They also need to keep these statistics from increasing from one year to another. In the bid, nations must also present transparent plans for the use of the financial resources received — allocating them, primarily, to conservation and forest rehabilitation.

It is also mandatory that at least 20% of the funds be used in initiatives directly benefiting Indigenous peoples and traditional communities, which could eliminate financial gaps and ensure that TFFF-sourced money does not replace nations’ existing budget for national environmental policies.

Instead of being donation-based, the initiative will follow a “revenue-generation model,” serving as a low-risk investment. Even if its main objective is not offering high profitability, it is committed to pay investors back in the future with interest — 4-4.5% each year. This return rate is less than the 6-8% yearly return that the TFFF would receive from investing in debt bonds of developing countries. The profits generated from this difference in rates will be used to pay countries for tropical forest conservation. Supporters believe this investment structure to be the TFFF’s main attractive factor.

When the fund reaches its desired capitalization, it will later reward nations for the standing hectares of forest, according to data collected by satellite. The Brazilian government said that it has among its goals “ensuring transparency and efficiency in verifying forest cover” to determine the payments. “Forest Payments are currently expected to be around $4 per hectare [2.47 acres] of Eligible Forest, subject to annual adjustment for inflation, capped at 2% per year,” official documents show.

Similarly, it will impose certain penalties for each hectare (2.47 acres) deforested or degraded. It will not be a fixed fee, but rather a proportional quantity that should be deducted from the payment to create a punishment-to-reward ratio that encourages conservation.

“To strengthen the performance-based nature of the mechanism, payments will be subject to discounts proportional to forest loss and degraded forests. Specifically, for each hectare [2.47 acres] deforested, the payment will be reduced by the equivalent of 100 hectares [247 acres] (1:100 discount) for deforestation rates up to 0.3%, and by 200 hectares [494 acres] (1:200 discount) for deforestation rates between 0.3% and 0.5%. In the case of degraded forests by fire, a 1:35 discount will apply for each hectare affected. These ratios may be reviewed and refined over time to reflect improvements in scientific understanding and technical capacities,” said the newest TFFF concept note, published in August.

Biome conservation discussions under the TFFF have multiple financial nuances. In Brazil alone, environmental crises besetting forests and other transition ecosystems, such as the Cerrado savanna and Pantanal wetlands, could cost the country $320 billion every year, according to the World Bank.

Combined with recent deforestation spikes in the Amazon, these projections tend to turn proposed conservation efforts — even the more ambitious ones — into a largely awaited topic at global environmental summits, where leaders urgently call for answers and solutions.

Brazilian experts heard by Mongabay argue that the TFFF could be the starting point to take that road, as it differentiates itself from other projects by seeking to arouse the interest of countries and international markets through a combination of forest protection and future financial benefits.

Now, Brazil races against time to make it viable until the COP.

Leonardo Sobral, a forestry director at the Brazilian NGO Institute for Forest and Agricultural Management and Certification (Imaflora), said the event in Belém can be “vital” to launch a plan with “the potential to be a significant financial solution” in terms of international forest conservation.

“I believe the project will be able to be implemented starting next year,” he told Mongabay. “These next few months [until the event] will be crucial for the TFFF’s full development, and the COP will be a vital moment for countries, whether they are investors or forest owners, to understand the mechanism and support it.”

One of the project’s main challenges is keeping participants properly engaged throughout its development, since results — whether in terms of direct conservation or financial return — may not necessarily be immediate.

Regarding the strategies for maintaining partakers, investors and civil society committed to the cause, Sobral said the “permanent” characteristic of TFFF’s goals, as well as its “transparency,” could help avoid future setbacks.

“TFFF is being designed to be a permanent fund to support long-term tropical forest conservation, and it intends to be a simple and transparent mechanism, paying based on countries’ forest conservation performance and also discounts for deforested or degraded areas. The rules and monitoring methods are simple and clear.”

For Imaflora’s director, the project’s conservation-based structure can also produce additional benefits, such as driving nations to adopt their own “transparent and reliable system for monitoring forest cover,” through which they would be capable of submitting annual reports, providing residual gains to their local forest examination, Sobral said.

“Also, we must remember the TFFF will always be open to complaints and public comment — so that society can report whether there are technical violations [within its structure].”

China jumps in

In their Climate Finance declaration in July, BRICS members repeatedly spoke about developed nations’ “ambition and financing gaps,” encouraging the global community to “urgently” address these topics through discussions and new guidelines.

“While there is sufficient global capital to fill such investment gaps, persistent barriers exist and disproportionately affect developing countries’ access to affordable finance,” the statement said.

The speech came a few days after Brazilian sources told Reuters about China’s intention to contribute to the TFFF — a move that, according to analysts, could open the door for other emerging countries to embrace the initiative voluntarily.

Following the rumors, Brazil’s Finance Ministry confirmed that its minister, Fernando Haddad, discussed the TFFF with his Chinese counterpart, Lan Fo’an, at a meeting in July. Further details of the conversation have not been shared.

The interest correspondingly follows talks between the Lula administration and their Chinese partners held in Beijing earlier in May, when the Brazilian delegation said the two countries intend to “cooperate in combating climate change, biodiversity conservation, forest restoration, promotion of ecosystem services and the construction of innovative economic instruments,” said the Brazilian government.

According to Yuri Arraes Fonseca, a Brazilian lawyer and expert in environmental, social and governance (ESG), financial support from China could set a positive precedent regarding the development of the TFFF while also addressing some concerns about inequality raised recently by BRICS members.

“It’s important to note that developed nations’ actions [in environmental terms] failed to progress at the expected pace,” he told Mongabay. The existence of a new, voluntary work front, through a new investment fund, with the participation of a major power like China, is likely to attract the movement of other interested nations and streamline the environmental preservation process.”

For Fonseca, this should “also boost investment from other members of the global south.”

NGO slashes TFFF model as “unsustainable”

Despite its developments, TFFF has critics. In April, a report jointly produced by the international NGO Global Forest Coalition (GFC) and the Bolivia-based Fundación Solón called the TFFF a “false solution” to face forest loss, as it says the initiative inserts the international quest for conservation into a market-driven, profit-seeking dynamic — while saying its future results would be impossible to guarantee.

“The TFFF is informed by the logic of ‘green capitalism’, which assigns a monetary value to ecosystem services, purportedly to conserve them and prevent their deterioration and loss,” the report says. “According to this view, what is free is unlikely to be cared for, so if an ecosystem service is assigned a price, it can attract capital that wants to maintain and profit from that service.”

Speaking to Mongabay, authors Mary Louise Malig, a researcher and GFC’s policy director, and Pablo Solón, a socioenvironment expert and former Bolivian ambassador to the U.N., said they are skeptical about the outcomes projected by the TFFF, saying that there are still “many doubts” about its real effectiveness, especially in the long term.

“[TFFF] is based on market logic, as it puts a ‘price tag’ for standing trees,” said Malig. “This is a cruel way to look at a forest — as it does not look at its intrinsic value. You cannot replace and replant a forest in reality, as forests come with an entire biodiversity and its living elements with it.”.

The 16-page report dedicates a full chapter to discussing the TFFF’s reward projections. That number, according to the GFC experts, is also “concerning.”

“They [TFFF proponents] say they want to ‘correct a market failure.’ So… [is it adequate to put the price of] $4 for all that ecosystem provides? What is that price? Is there a scientific analysis that says that, with this $4, you can save the forest? Where do these numbers come from? It’s all part of a mathematical calculation, not science,” said Solón.

For the expert from Bolivia, the TFFF “wants to transform forests into assets.”

Speaking about its proposed solutions, the report states that tropical forests should be first recognized as “rights holders, and not as mere providers of ecosystem services for commodification through banking instruments.”

“The fate of tropical forests does not depend on government negotiations at COP30 — which, like previous climate summits, is co-opted by corporate interests. It depends on what we as members of civil society, Indigenous Peoples, and Local Communities do to foster and multiply territories free from wildfires, deforestation, and violence against living systems,” said GFC.

Banner image: Chinese President Xi Jinping visited Brazil in 2024 and signed deals with President Lula on transition minerals. Image courtesy of Ricardo Stuckert/PR.