Companies like Amazon will buy $180 million in carbon credits from the eponymous rainforest

Amazon and other companies have agreed to buy carbon offset credits that will support conservation of the rainforest that bears its name in the Brazilian state of Pará, in a deal valued at about $180 million.

Amazon and at least five other firms will make the purchase through the LEAF Coalition, a forest conservation initiative that it helped found in 2021 with a group of companies and governments, including in the United States and the United Kingdom.

The deal is LEAF's first in the Amazon, the world's largest rainforest, which is vital to curbing climate change because of the huge amounts of greenhouse gases its trees absorb.

The Pará state government and the LEAF Coalition shared details of the agreement exclusively with Reuters for the first time. Pará Governor Helder Barbalho announced the deal on Tuesday during Climate Week in New York, when some 900 events will be held in conjunction with the U.N. General Assembly.

Barbalho said the state would only collect the portion of sales profits needed to continue its efforts to reduce greenhouse gas emissions, while the rest would go to indigenous peoples, former slaves and traditional extractive communities, as well as family farms.

“It clearly sends an important message: a company with a name that refers to the Amazon makes its first purchase from an Amazon state,” Barbalho told Reuters separately.

Amazon confirmed the purchase in a statement, stressing the importance of preserving tropical forests to address climate change.

While global demand for carbon credits has stagnated, tech giants Microsoft, Meta and Google have all made offset purchases in Brazil this year.

Amazon, chemical and pharmaceuticals maker Bayer, consultancies BCG and Capgemini, clothing retailer H&M and the Walmart Foundation will collectively buy 5 million credits at $15 each. That's well above last week's average of $4.49 for nature-linked carbon credits, according to data provider Allied Offsets.

Each credit represents a reduction of 1 metric ton of carbon emissions from reduced deforestation in the state of Pará in the years 2023 to 2026.

Another 7 million credits will be made available for other companies to purchase. The governments of the United States, the United Kingdom and Norway have guaranteed a portion of these credits and will buy them if companies do not do so.
Pará will host the UN's COP30 climate summit next year, in a move that is the centrepiece of President Luiz Inácio Lula da Silva's bid to restore Brazil's environmental credentials after years of rising deforestation.

Para has been the state with the most deforestation since 2005, although destruction has been declining there since 2021. An area larger than New York City has been deforested in Para between January and August of this year, a 20% decrease from last year, according to preliminary data from the federal government.

Barbalho said at Climate Week that by 2026 the government will have full traceability of livestock supply chains, a key driver of deforestation in Pará.