Brazil will lead by example: COP30 and the Tropical Forest Forever Facility (TFFF).

The Tropical Forest Forever Facility is a self-sustaining financing model proposed by Brazil at COP28. It is expected that other countries will announce their contributions during COP30.

By Paula Wojcikiewicz Almeida and Mariana de Brito Mariani

President Lula announced a US$1 billion investment in the TFFF. In his speech, he stressed that "resources for conservation (of forests) are scarce" and that "there will be no possible solution for tropical forests without the active participation of those who live in them."

The TFFF is the newest instrument in a long list of international forest governance initiatives, which began with the Stockholm Conference in 1972, when 113 countries recognized the importance of coordinated action in monitoring and conserving forests. Increasingly ambitious, conservation targets are constantly being updated. In 2021, in Glasgow, the Leaders' Declaration on Forests and Land Use established a commitment to zero deforestation by 2030.

Major emitting countries also have ambitious legislation: with the Lacey Act, the United States prohibits the commercialization of plants that have been extracted in violation of any US law. In the United Kingdom, the Forest Risk Commodity Regulation aims to restrict the import of products from deforested areas. In China, the Forest Law obliges the State, as the owner of the forests, to adopt accountability and performance targets in relation to forest resources.

At the regional level, the European Union adopted the Anti-Deforestation Regulation, a market-based measure that seeks to impose due diligence obligations on traders to prevent commodities resulting from deforestation from being traded in the region. The regulation's effective date was changed to the end of 2025, however, and there are indications that a new request for postponement could change the effective date to the end of 2026.

Despite decades of commitments, deforestation persists, with the world having lost 28.3 million hectares of forest in 2023. In this context, the TFFF emerges as a promising innovative mechanism, with the underlying rationale of making conservation economically advantageous.

Presented by Brazil during COP28, the Fund seeks to financially reward countries that conserve their tropical forests through annual payments linked to satellite verification of forest hectare preservation. The initiative is organized into two arms: an investment fund, TFIF, which will mobilize public and private resources to finance payments to participating countries; and the Tropical Forest Facility, TFF, which will be responsible for managing the program—including coordinating the forest monitoring system and managing the rewards system.

The Fund adopts a self-sustaining model by providing, through the TFIF, for investment in fixed-income securities in the international market to generate returns exceeding the cost of capital. The objective is to create predictable and long-term incentives. Thus, public and private entities will invest in the Fund — which will manage the resources, allocating its capital to a portfolio of fixed-income assets, generating a financial return with an expected spread of 2.5 to 3% per year. The dividends will be used to pay off the senior debt and interest on the invested capital. Finally, payments will be made to the member states that have conserved their forests.

Each participating country may receive up to US$4 per hectare preserved, with proportional discounts in cases of deforestation: for each hectare deforested, up to 100 hectares will not be compensated. At least 20% of the resources must go directly to indigenous peoples and local communities. The expectation is that the TFFF will triple the current volume of non-reimbursable international financing for forests.

When announcing the billion-dollar contribution to the Fund, Lula said that Brazil would lead by example, being the first country to commit to the TFFF. The expectation is that other countries will announce their contributions during COP30. By adopting a self-sustaining financing model, the TFFF differentiates itself from existing climate finance initiatives, which are inexorably dependent on donations or are almost exclusively formed by government contributions.

However, doubts remain about the real participation of local communities in the Fund, both in its management and in receiving benefits. The nature of the investments made by the TFFF should also be carefully monitored to avoid environmentally irresponsible investments being made in the name of combating deforestation.

Originally posted 29/10/2025 at O Brasil vai liderar pelo exemplo: COP30 e o fundo das florestas tropicais.