- Brazil’s federal police have arrested people and seized assets linked to some of the country’s largest carbon credit projects.
- According to investigators, the group had been committing land theft and timber laundering in the Amazon for more than a decade and making millions of dollars in profits.
- The projects were exposed in late May in a year-long investigation published by Mongabay, which showed links between the REDD+ projects and an illegal timber scam.
- Authorities and experts hope the findings will raise the bar for projects in the country and convince lawmakers to create strict rules for Brazil’s carbon market, which is now under discussion.
On June 5, Brazilian Federal Police launched a raid against the proponents of some of the largest carbon credit projects in the Brazilian Amazon. The Greenwashing operation focuses on the Ricardo Stoppe group, which was cited in a Mongabay investigation in late May for its ties to an alleged illegal timber scam. In the country’s largest-ever investigation into the issue, authorities found that the group had set up projects in land-grabbed areas, earning 180 million reais ($34 million) from selling “rotten” carbon credits.
Stoppe owns five REDD+ projects in the Brazilian Amazon, covering 400,000 hectares (nearly 1 million acres), more than five times the size of New York City. REDD+ stands for reducing emissions from deforestation and forest degradation, and carbon credits are generated by protecting an area that could otherwise be deforested.
The federal police targeted the same three projects investigated by Mongabay: Fortaleza Ituxi, Unitor and Evergreen, located in the municipalities of Lábrea and Apuí, in the south of Amazonas state. Buyers of these credits include companies such as carbon credit broker Moss, Brazilian discount carrier GOL Airlines, food delivery app iFood, Itaú, one of the country’s largest banks, and international companies Toshiba, Spotify and Boeing.
Federal police reiterated Mongabay’s findings that the group not only used these areas to generate carbon credits, but also to issue fake documents to launder timber from illegally deforested areas.
In Brazil, all timber must be accompanied by a document called a DOF, the Forest Origin Document, also called a timber credit. Once the environmental authorities have approved a forest management plan, its owner can issue a certain number of DOFs, corresponding to the volume of trees that may be harvested from that area.
In Stoppe’s case, however, an analysis found that the forest management plans within its REDD+ projects did not capture all the timber possible, according to the Center for Climate Crime Analysis (CCCA). The nonprofit, a Netherlands-based organization founded by prosecutors and researchers that investigates emitters of climate-warming greenhouse gases, used satellite images to compare the amount of wood from Stoppe’s areas with the amount declared through the DOF system.
CCCA discovered mismatches equivalent to more than 4,200 truckloads of lumber. Mongabay’s investigation found evidence reviewed by experts that these discrepancies indicated that Stoppe’s projects could use the reserve credits to launder timber illegally taken from other areas.
According to federal police, the fake timber credits were likely used to launder timber extracted by Stoppe’s own group and by the Chaules Pozzebon group, considered one of the Amazon’s biggest deforesters and sentenced to 70 years in prison . Two men targeted by investigators are loggers: José Luiz Capelasso and Élcio Aparecido Moço. Authorities say the group is behind the illegal mining of more than 1 million cubic meters of timber, the equivalent of nearly 5,000 truckloads.
“They certainly used the paper to launder wood,” federal deputy Thiago Marrese Scarpellini, chief investigator of the Greenwashing Operation, told Mongabay by phone. “Near their logging companies is Kaxarari indigenous land, and that is where timber is always sourced.”
Federal police have issued 76 arrest and search warrants in the states of Rondônia, Amazonas, Mato Grosso, Paraná, Ceará and São Paulo. They seized two planes, luxury cars and various jewelry.
Moço and Capelasso were arrested, as were Stoppe’s son, Ricardo Villares Lot Stoppe, and Capelasso’s daughter, the forest engineer Poliana, who signed the likely fraudulent forest management plans used by the group. After two days on the run, Ricardo Stoppe turned himself in to the police on June 7.
In a statement to Mongabay, Grupo Ituxi, the company behind the projects, said it would make a public statement after gaining access to federal police investigation files.
Land grab 2.0
Federal police also say Stoppe’s group has seized more than 500,000 hectares (1.2 million acres) of public land in southern Amazonas – three times the size of the municipality of São Paulo.
“This is land grab 2.0,” Scarpellini said. He explained that traditional land grabbing – where forest is cleared to make way for pasture – is easier to identify because deforestation is quickly visible in satellite images. However, the combination of carbon projects, which conserved the forest, and illegal timber extraction from other places meant that the scam went undetected for years.
“In this case, the forest remains intact; no alert is generated in the systems that monitor this. They have no problems with the neighbors, because they are not going to confiscate private land, but only public land. So there are no complaints from local residents. How do you find out that they are committing these crimes?”
According to investigators, the seized public areas are valued at 820 million reais ($156 million). Police have seized 1.6 billion reais ($304 million) in assets and estimated environmental damage from the wood-washing fraud at 606 million reais ($115.2 million).
The investigators also discovered that the group had contacts at state offices, such as land reform agencies, who helped them obtain fraudulent documents to facilitate land grabbing. As part of the operation, eight officials were removed from office.
The REDD+ projects were developed by Brazilian company Carbonext and certified by Verra, one of the world’s largest voluntary carbon market registries and the most important for REDD+ initiatives. None of them are under investigation.
“I believe Verra is doing the certification incorrectly,” Scarpellini said. “But I don’t know if it’s their fault because it’s based in the United States, and I don’t know if there’s a land grab in the United States. But we have it here. And whether we are a promising market [for carbon credits] they will have to adapt to certain circumstances here.”
Under Verra’s rules, the projects were audited by auditors hired by the proponents, but these did not indicate any irregularities.
For Shigueo Watanabe Junior, a senior climate policy specialist at the Talanoa Institute, a Brazilian think tank focused on climate policy, the studies expose one of the gaps in the voluntary carbon credit market. “A REDD+ project in Congo must follow the same rules as a REDD+ project in the Amazon, even though all the circumstances and problems are different,” he said.
The matter came up during the discussion in Congress on the implementation of a regulated carbon market in Brazil. “We believe that the operation is not intended to undermine the carbon credit market, but rather to strengthen the way projects are documented so that this does not happen again,” Scarpellini said.
“I think this operation was excellent. It is a clear signal to everyone that the bar has been raised,” said Watanabe Junior.
Mongabay’s research was published as part of the Opaque carbon project, an alliance investigating the workings of the carbon market in Latin America and led by the Latin American Center for Investigative Journalism (CLIP).
The story has been updated with information that Ricardo Stoppe turned himself in to police on June 7.
Banner image: The Federal Police launched the Greenwashing operation against the proponents of some of the largest carbon credit projects in Brazil. Image courtesy of the Federal Police.
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