Case Name: IBAMA vs. Madeira Nova Aliança (Timber deposit in Placas and climate damage)

Summary

This is a Public Civil Action, with a request for urgent relief, filed by IBAMA against Madeireira Nova Aliança Ltda., seeking compensation for environmental and climate damages caused by the storage of timber without an environmental license. This Public Civil Action is part of a set of 9 actions filed by IBAMA with the same grounds, but against different defendants, to challenge illegal timber storage and climate damage. The plaintiff alleges that the storage of timber without proven origin is associated with illegal deforestation and predatory exploitation in the Amazon biome and on indigenous land. Thus, it seeks compensation for associated environmental damages, including (i) damage caused to flora and fauna, (ii) soil erosion, and (iii) contribution to global warming. Regarding climate damage, it claims that the illegal conduct not only removed carbon sinks from the forest but also caused the release of carbon into the atmosphere. The author seeks to have determined (i) an obligation to restore vegetation in an area equivalent to that estimated by IBAMA, based on the volume of seized logs, totaling 30.46 hectares, and (ii) an obligation to pay for climate damage based on the Social Cost of Carbon (SCC). Based on the polluter-pays principle, the author argues that the negative climate externality represents an external social cost that was not internalized by the illegal vegetation suppression activity. The author maintains that climate damage can be identified on an individual scale by multiplying the estimated GHG emissions from the activity by the SCC. In this specific case, IBAMA uses the Amazon Fund methodology to estimate emissions based on the area of the Amazon biome considered deforested. The author expressly mentions environmental justice and argues that accountability for climate damage consists of legally affirming the correction of the distortion of environmental burdens and benefits. The author requests, as an urgent measure: (i) suspension of financing, tax incentives, and access to credit lines for the offender, (ii) freezing of assets in the estimated amount for the obligation to restore vegetation and the obligation to pay for climate damage, and (iii) a court order to halt the illegal polluting activity. The author further asserts the need for reversal of the burden of proof and, definitively, requests that the defendant be ordered to restore an area equivalent to the deforested area and to pay the amount corresponding to the social cost of carbon emissions.

The court issued a preliminary injunction partially granting the request for an injunction regarding the freezing of the defendant company's assets, the suspension of the defendant's participation in financing programs, and the suspension or loss of tax incentives or benefits, given the strong evidence of damage and the duty to repair it (probability of the right) and the risk to the useful outcome of the process (guaranteeing reparation). However, at this time, the court considered the use of the Social Cost of Carbon (SCC) for the purpose of ordering the freezing of assets unfeasible due to a lack of technical support, and the requested amount appeared, at first glance, disproportionate.

IBAMA filed an interlocutory appeal (1005432-51.2019.4.01.0000) requesting the inclusion of the value related to the Social Cost of Carbon (CSC) in the declaration of asset unavailability, considering the soundness of the methodology used as a reference for its quantification. It argues that to fully compensate for the environmental damage caused, it is necessary to include the social cost of carbon, which is classified as "residual damage" or "permanent damage". The appeal is awaiting judgment.

In its defense, the defendant alleged the initial complaint was flawed, the court lacked jurisdiction (it should have been the court of the location of the damage), the need for a necessary passive joint litigation with the State of Pará, and the absence of a causal link to hold it liable for the environmental damage.

IBAMA submitted a rebuttal contesting the points raised in the defense, and attached Technical Information No. 10/2019-COREC/CGBIO/DBFLO, which explains how the calculation is made to arrive at the amount of compensation sought regarding the application of the Social Cost of Carbon (CSC).

In October 2024, a judgment was issued partially upholding the claims, ordering the defendant company to (i) submit a Degraded Area Recovery Project (PRAD); (ii) pay material damages in the amount of R$ 327,201.32; (iii) suspend the Rural Environmental Registry (CAR) of the area until the damage is fully recovered; and (iv) maintain the suspension of participation in financing lines. In short, the judgment confirmed the preliminary injunction, without, however, addressing the claims regarding payment of compensation related to the social cost of carbon.In December 2025, a decision was issued on the Motion for Clarification, finding that the judgment was silent on the Social Cost of Carbon (SCC) in its operative part, accepting the motion with modifying effects and applying CNJ Resolution 433/2021, establishing the defendant company's obligation to pay compensation for the SCC, with the amount to be determined in the judgment enforcement phase, observing, as a minimum parameter, the value of US$ 5.00 (five US dollars) per ton of CO2 equivalent (tCO2e); and expressly confirming the preliminary injunctions previously granted.The case has entered the sentence enforcement phase.

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Main norms mobilized

• Article 225 of the Federal Constitution (CRFB/88)
• National Environment Policy Act - PNMA (Federal Law 6.938/1981)

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