Firms Including Amazon to Purchase $180 Million in Carbon Credits from Rainforest, Reports Reuters

By Jake Spring

SAO PAULO (Reuters) – Amazon and several other companies have committed to purchasing carbon offset credits aimed at supporting the conservation of the Amazon rainforest in Brazil’s Para state, in a deal estimated to be worth about $180 million.

Amazon, along with at least five other firms, will facilitate the purchase through the LEAF Coalition, a forest conservation initiative that was established in 2021 with the involvement of various companies and governments, including the United States and the United Kingdom.

This agreement marks LEAF’s inaugural deal in the Amazon, the largest rainforest in the world and a crucial factor in mitigating climate change due to the significant amount of greenhouse gases absorbed by its trees.

The details of the deal were initially shared exclusively with Reuters by the Para state government and the LEAF Coalition. Para Governor Helder Barbalho revealed the agreement on Tuesday during New York Climate Week, coinciding with the UN General Assembly, which features approximately 900 events.

Barbalho stated that the state would retain only the necessary portion of the proceeds to further its greenhouse gas reduction initiatives, with the remaining funds directed to Indigenous peoples, communities of former slaves, traditional extractivist communities, and family farms.

"This clearly sends an important message: A company with an Amazon-themed name making its first purchase in a state of the Amazon," Barbalho told Reuters.

Amazon confirmed the purchase in a statement, highlighting the critical role of preserving tropical forests in the battle against climate change.

While global demand for carbon credits has slowed, major tech companies, including Microsoft, Meta, and Google, have all made offset purchases in Brazil in the current year.

The collective purchase involving Amazon, Bayer, consulting firms BCG and Capgemini, clothing retailer H&M, and the Walmart Foundation will amount to 5 million credits priced at $15 each. This is significantly higher than the average rate of $4.49 per carbon credit linked to nature reported last week.

Each credit corresponds to a reduction of one metric ton of carbon emissions achieved by reducing deforestation in Para from 2023 to 2026.

Additionally, there will be 7 million credits available for other companies to purchase. The governments of the U.S., U.K., and Norway have guaranteed a portion of these credits and will buy them if the expected companies do not.

Next year, Para is set to host the UN COP30 climate summit, a central element of President Luiz Inacio Lula da Silva’s efforts to restore Brazil’s environmental reputation following years of escalating deforestation.

Para has been the leading state in deforestation since 2005, though there has been a notable decline in destruction since 2021. From January to August of this year, an area larger than New York City was deforested in Para, reflecting a 20% decrease compared to the previous year, according to preliminary federal government data.

During Climate Week, Barbalho announced that by 2026, the government plans to achieve full traceability of supply chains for cattle, a significant contributor to deforestation in Para.