UPDATE: Rising political star in Brazil calls on Verra to speed up reviews

Adds comment from Verra.

Quantum Commodity Intelligence – A member of Brazil's Chamber of Deputies, the lower house of the country's National Congress, has publicly accused US-based registry Verra of deliberately stalling the review process for new carbon projects in the country and called on it to speed up matters.

Verified Carbon Standard (VCS) credit issuances in Brazil fell sharply last year and are on track to decline once again this year.

Several prominent developers have reportedly lost millions of dollars worth of sales as a result, sources said.

Amom Mandel, a 22-year old MP from Brazil's Amazonas state who has risen to prominence in the chamber by taking on new issues, is building a coalition including other deputies, the federal government and several of the country's largest developers, although they are for now choosing to remain anonymous.

"We got on board with the idea of submitting ourselves to Verra and other private institutions in order to set a standard for the current market. But we need it to be fair with the Brazilian market," he told Quantum in an interview.

"Otherwise, we are going to have the need to set a new standard or to submit ourselves to another institution," he added.

Verra, which on Monday issued a new framework for avoided unplanned deforestation – the dominant project type in Brazil – has acknowledged delays in approving new schemes due to an investment rush into carbon credits in 2020-2021, and has pledged to use technology to speed up reviews.

But Brazilian developers say this is still too slow and have enlisted the authorities to ask for quicker resolution.

Mandel told Quantum many in Brazil feel project reviews have been "deliberately" stalled in the last few months.

"Is it more than the delays because we think that Verra is deliberately delaying the approvals for the Brazilian projects and that's possibly related to their interests in other countries and companies around the world," he also said, adding that he expects Brazilian federal authorities to take up the issue soon.

Verra has 30 avoided deforestation (REDD+) projects already registered in Brazil and a further 70 in the development pipeline.

Crisis in Brazil

Several project developers have privately agreed with Mandel's points, but are not prepared to openly call for a change, amid persistent rumours in the country that new rival standards could be launched.

For example, in October, a Brazil-based standard called LuxCS launched its platform with a goal to issue its first 100,000 carbon credits before the end of the year.

"Don't quote me because I'm working very hard to be on Verra's good side," said one developer.

A second developer, who also preferred to remain anonymous, called the situation a "Verra crisis in Brazil".

"On the eve of COP28, an ideal space to restore its credibility, Verra/VCS will have a great challenge to overcome in Brazil," he said.

"Several Brazilian developers are unhappy with Verra's systematic delays, and the most radical are articulating an agreement within the national association of developers so that REDD+ projects will no longer be presented to Verra from 2024 onwards," he added.

The developer said the issues stemmed from delays in certifying projects and "frequent changes to the VM0015 methodology that generate instability in technical teams".

NBS Alliance, the main association of Brazilian developers, has stayed silent on the matter and a source close to the organisation said the initiative comes from individual actors.

Following a vote in the Senate, or upper house, last month, lawmakers from Brazil's Chamber of Deputies are now considering a bill that would establish a regulated carbon market in the country.

The Chamber will examine the text on Tuesday, a well placed source said.

Mandel is Brazil's youngest member of parliament and his home state of Amazonas in the Amazon region is where many REDD+ projects are under consideration.

A survey carried out by the Legisla Brasil Index has found Mandel to be one of 46 "most active" deputies in the country since his election in 2022.

"Verra understands the crucial role Brazil projects play in a successful REDD program. That is why Brazil is the only country for which Verra has placed a specific Country Representative: Bruno Brazil," said the registry in an emailed statement to Quantum.

"This role is a concrete demonstration that Verra is committed to developing better and greater engagement with local stakeholders by having a local person in the country – who better and more directly understands the domestic regulations and the socio-cultural situation of the country, and who speaks the national language," it said.

A study published this week in Global Change Biology finds that nature-based solutions could mitigate "nearly 80%"" of Brazil's net zero pledge and reduce 781 million tonnes of carbon dioxide a year on average in Brazil during the next 30 years.

"Eliminating both legal and illegal deforestation and promoting large-scale restoration have the potential to keep Brazil on a clear path to net zero GHG emissions by around 2040 without the need to deploy costly and not-yet mature negative emissions technologies," it concludes.