Donor-funded forest carbon trading scheme for multinational giants has not yet produced a single sale

The Lowering Emissions by Accelerating Forest Finance (LEAF) Coalition was established a few months after the end of Trump I with an ambition to rapidly facilitate forest carbon trade deals between tropical country governments and private firms as a way of raising billions of dollars to slow deforestation. Its founding members included the governments of Norway, the United Kingdom, and the United States, and a group of multinational companies led by Amazon.

Norway, which has over several years been building up an international architecture for trade in tropical forest carbon credits, has been the main driver behind LEAF. The United Kingdom, an active forest donor, gave significant financial backing to the initiative. The engagement of President Biden’s Climate Envoy John Kerry added diplomatic weight, though the US support was largely symbolic. LEAF was launched on Earth Day, April 22, 2021 with an expectation of triggering carbon deals by the end of the year, but this did not happen.

Then came the aid cuts of 2025. Neither the US nor the UK government now confirms to Development Today whether they are still on board.

Asked if the United States is still engaged in the LEAF Coalition, a State Department spokesperson says: “The State Department is working to reorient foreign assistance programming after decades of mismanagement and misaligned priorities in the delivery of foreign assistance, as directed by President Trump’s Executive Order on Reevaluating and Realigning United States Foreign Aid … While the Department has acted swiftly, and finished a comprehensive review of all of its existing awards, this process remains ongoing.”

This spring, the UK government announced it would cut 40 per cent of its aid budget to finance a corresponding increase in military spending. The UK Spending Review, concluded on June, 11 2025, specified which programmes would be cut but did not mention LEAF. A spokesperson at the UK Department for Energy Security and Net Zero could not confirm the current status of the government’s commitment to the LEAF Coalition.

Donor commitments to LEAF

The Norwegian Climate Ministry’s original target was for the first deals under LEAF to be signed with tropical forest countries by the end of 2021, sending a signal to the market of a new way to mobilise capital to incentivise forest protection. As of today, none has materialised, and the ministry now estimates that the first transaction might not occur before 2027.

Norway is by far the most invested in the LEAF Coalition. Back in 2018, three years before LEAF was established, Norway financed the creation of two key bodies – Emergent, a New York-based charity, which would facilitate the sale of carbon credits to the private sector, and the Architecture for REDD+ Transactions (ART), a new tropical forest carbon certifier based in Arkansas that aimed to have the market’s highest standard on environmental integrity and social safeguards. For several years, Norway was the sole financier of both.

When LEAF came into being in 2021, it was agreed that Emergent would act as the coalition’s broker, facilitating deals between tropical government credit sellers and corporate buyers. Moreover, LEAF would only deal in credits approved by ART.

The aid-financed Norwegian International Climate Forest Initiative (NICFI) has spent a total of NOK 45 billion since 2008. Out of this, NICFI provided NOK 85 million for the establishment of ART and almost NOK 100 million (2016-2021) for the establishment of Emergent via grants to the Environmental Defense Fund. In addition, NICFI has put up NOK 2.3 billion for the LEAF “floor price guarantee,” a de-risking mechanism that ensures that, in case corporate buyers do not step up, host governments will still receive ten dollars per tonne for verified emission reductions.

During 2023 and 2024, NICFI disbursed NOK 600 million to Emergent in connection with this price guarantee. A spokesperson at NICFI says these funds have been disbursed “in advance to Emergent to cover payments for credits that Norway is planning to purchase under the LEAF Coalition.”  A project description on the Norad website states: “Emergent will puchase credits from tropical forest host jurisdictions and seek to sell these credits to private-sector buyers. If Emergent cannot find such buyers for all the credits, Emergent will utilize the grant under this agreement to pay for, and retire, those credits.”

The United Kingdom joined the LEAF Coalition, “because it has the potential to unlock unprecedented levels of finance and accelerate international efforts to protect forests,” a government spokesperson said at the time. The UK commitment to LEAF was GBP 200 million, including GBP 175 million for the floor price guarantee mechanism and GBP 25 million in technical assistance to support forest countries to meet the eligibility criteria, carbon integrity requirements and social safeguards associated with LEAF.

The US investment in LEAF was a USD 3.4 million grant to Emergent, equivalent to 1 per cent of Norway’s contribution. As of 2024, according to the State Department, the government was working with Congress on a second grant to support LEAF’s price guarantee facility.

In early March of this year, US funding to Emergent was suspended as part of the general 90-day freeze on all foreign development assistance announced by the White House. Emergent informed Development Today at the time that since the United States was providing significantly less funding than the United Kingdom and Norway, both Emergent and the LEAF Coalition would “continue to operate as normal.” Shortly after, Emergent was told the US suspension had been lifted.

Norway had hoped that additional countries would soon join the initiative. To date, only one more has.

In March 2022, the government of Korea expressed its intention to join the LEAF Coalition, becoming the fourth donor member. The following year, a KRW 1.4 billion (USD 1 million) grant agreement was signed for the period 2023-2026, according to which funds are to be divided as follows: 10 per cent allocated to the Seoul-based international organisation Asian Forest Cooperation Organization (AFoCO); 15 per cent to Emergent for operating costs; and 75 per cent to the price guarantee facility. It specifies that the grant is to be focused on countries in the Asian region. The funds come out of the Korean aid budget.

The other part of the LEAF Coalition consists of a group of over 30 multinational corporations, including Amazon, Volkswagen, H&M, GSK, Airbnb, BlackRock, Walmart, Bayer, BCG, and Nestlé. To be members of LEAF, they must abide by a set of buyers’ criteria aimed at ensuring that purchases of ART-certified credits are in addition to, and not a substitute for, the companies’ own emission reduction targets. A few years ago, Equinor showed interest in LEAF, but since fossil fuel companies are not eligible, the idea was dropped.

No transactions yet

In this complex carbon trading architecture, Emergent’s role is to enter into Emissions Reductions Purchase Agreements (ERPAs), both with forest governments and with LEAF Coalition corporate buyers. According to the LEAF website, “this enables Emergent to offer credits from one forest nation to multiple buyers via a single contract, whilst buyers, through their single contract with Emergent, can purchase credits from a range of forest governments.”

However, the key reason for the absence of LEAF transactions lies not with Emergent, but with ART. No deals can be closed unless ART has verified that a country has reduced deforestation, and it has issued carbon credits that a government can then sell.

Currently, 26 jurisdictions - countries or provinces within countries – have initiated processes for applying for credits, but so far ART has issued credits to only one: Guyana. In this case, the government in Georgetown did not sell the credits to a LEAF corporate buyer. Instead, in a record USD 750 million deal, Guyana sold them to the US company Hess Oil, which is actively exploring for oil and gas off the Guyanese coast.

Costa Rica, one of the first countries to express interest in having forest carbon credits certified through ART back in December 2020, is expected to become the second country to cross the finish line. But its application has languished. ART’s verification process started in July 2023 and is still not complete.

ART has come under fire from indigenous organisations. They say that ART’s carbon standard does not sufficiently ensure that their rights are respected when credits are issued for huge jurisdictional areas that overlap with their lands. In the case of the credits issued by ART to the government of Guyana, the Amerindian People’s Association has argued that indigenous communities were not properly consulted prior to the sale of carbon credits to Hess Oil. In the case of Costa Rica, the Mesoamerican Alliance of People and Forests (AMPB) has criticised ART’s verification process.

ART is currently reviewing its carbon standard. Commenting on the critique from indigenous organisations, the Norwegian Climate Ministry praises ART’s “commitment to regular, periodic reviews of the standard, which are subject to thorough and public consultation.” A ministry spokesperson said: “From our point of view, this is an important component to ensure that [it] remains a standard of high integrity. Feedback from Indigenous Peoples’ Organisations and NGOs can strengthen the standard, ensuring continuous improvement.”

Asked to comment on the absence of any LEAF contracts yet, the spokesperson said: “The first transactions will take time … We expect transactions to happen within the next two years.”

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Update/correction: This article originally stated that Norway’s financial commitment to LEAF is over NOK 3 billion. The figure has been adjusted down based on new information.