A Brazilian state that straddles the frontier of the Amazon jungle is pursuing the sale of more than 2.5 billion reais ($430.16 million) in carbon credits related to forest conservation through 2030, the state government said on Thursday.
Companies typically buy such credits to offset a portion of their greenhouse gas emissions in pursuit of voluntary goals to curb global warming, essentially paying for projects that cut climate pollution.
Tocantins state aims to sell some 50 million carbon credits, each amounting to one metric ton of carbon sequestered by forests and other native vegetation across the state through the end of the decade, the government said in a statement.
The value and number of carbon credits is contingent on the state successfully reducing deforestation, it said. The state government exclusively shared details of its planned issuance of carbon credits with Reuters ahead of the official announcement.
Scientists say protection of the Amazon rainforest is vital to curbing climate change because of the vast quantity of carbon dioxide its trees absorb.
Brazil's federal government announced last week that deforestation in Brazil's Amazon in the 12 months through July had fallen to the lowest level since 2015.
Tocantins will submit its paperwork on Thursday to validate the project under the ART-TREES carbon credit standard, officially presenting the project at the United Nations COP29 climate summit in Azerbaijan.
Commodities trading firm Mercuria is coordinating the sale.
The submission will look to certify 17 million to 18 million credits for carbon sequestered from 2020 to 2024, not including credits set aside in case of wildfires or for other contingencies, a person familiar with the deal told Reuters.
Those could be worth at least 850 million reais, based on the government's overall valuation of the deal.
The sale of that batch of credits will likely close in the second half of 2025, the person said on condition of anonymity, as those details are not public.
The number of credits involved dwarfs deals this year by Microsoft(MSFT.O), Google (GOOGL.O) and Meta (META.O) to buy forestry carbon credits in Brazil, and also surpasses the Para state government's agreement to sell credits to a group of companies including Amazon (AMZN.O).
($1 = 5.8118 reais)
