Plant-for-the-Planet welcomes TFFF Concept Note 3: Germany should now invest

Plant-for-the-Planet welcomes improvements to the Tropical Forest Forever Facility and calls on the German government to invest and closely scrutinize its implementation.

Deforestation globally is rising. WRI reported skyrocketing forest loss in 2024, with millions of high-integrity tropical forests lost due to deforestation and forest fires. We need fair, fast, and full protection of our forests.

The Tropical Forest Forever Facility is increasingly looking like it might meaningfully contribute to just that. Concept Note 3, published on Thursday 21 of August, shows small but meaningful improvements on key issues.

Key Improvements We Welcome

• Stronger penalties for degradation: The penalty for forest degradation was increased from $100 per hectare to $140 (page 9).
• Clearer Investment Criteria: The investment criteria have been updated and now explicitly exclude investments in assets such as “coal, peat, oil and gas” (page 10). However, a detailed investment policy has not yet been published. 
• Tackling Leakage: Potential leakage (negative impacts on other ecosystems that might arise from the protection of tropical forests) into other forest ecosystems is addressed through the introduction of a payment suspension penalty. However, details for this system are still required. (Incompleteness risk – page 31)
• Strengthening IPLC rights: In Concept Note 2, tropical forest countries (TFCs), were encouraged to direct 20% forest payouts towards IPLC. The new version makes this mandatory through a new mechanism: the IPLC Dedicated Financial Allocation (IPLC-DFA). TFCs will be provided a grace period of one year to put governance structures in place and guarantee that IPLCs receive their share, or they risk losing their entire payout the following year. In addition, every TFC must have a robust grievance and redress mechanism that meets TFFF’s standards—without it, no payouts will be made (page 44). This falls short of the direct access mechanisms for IPLC that we and many others called for, but is a step in the right direction.
• Continuous improvement mechanism: A clear and detailed process for continuous improvement through periodic technical reviews and ratcheting was introduced. This sets out concrete timelines, expert committees, and a principle of only strengthening (not weakening) criteria (page 30). 

Improvements still required on key issues

On one key issue we saw less progress than hoped: forest degradation. As we laid out in our Policy Note in May, a narrow focus on fire as the only form of degradation penalized by TFFF drastically underestimates true degradation. Only about a third of degradation is directly caused by fire. 

We – like many others – would have liked to see an update where all forms of forest degradation are penalized from the start. However, the TFFF team has laid out arguments for why degradation monitoring is challenging and stipulates that “during the initial phase [of three years] of the TFFF” degradation penalties will only be applied for fire-based degradation (page 28). After three years, that policy will be reviewed, as well as every five years after that (page 29).

Additionally, a lot of details are still lacking on key implementation questions that will hopefully be cleared up in the forthcoming “operations manual.”

Clear Progress

“While Concept Note 3 marks clear improvement, it’s essential that states and experts continue to engage in the development of the Fund to ensure that it becomes Forest Finance with Integrity.” Pakhi Das, Public Policy Advisor at Plant-for-the-Planet, concludes. 

“The TFFF is the boldest initiative to protect the world’s forests in decades. Today’s tweaks have brought it closer to delivering upon its potential” said Felix Finkbeiner, founder of Plant-for-the-Planet.

We thus encourage the German government, as well as other wealthy countries, to invest into the TFFF.