Largest Carbon Removal Credit Transaction
In a groundbreaking collaboration, BTG Pactual Timberland Investment Group (TIG) and Microsoft have joined forces in a landmark agreement. This partnership, set to provide up to 8 million carbon removal credits through 2043, marks the largest transaction of its kind to date according to MSCI Carbon Markets data. The magnitude of this initiative underscores the immense potential of reforestation and restoration projects in Latin America to combat climate change while delivering substantial environmental and community benefits.
Massive Reforestation Effort in Latin America
The carbon removal credits will be sourced from TIG’s ambitious $1 billion reforestation and restoration strategy in Latin America, an approach guided by Conservation International’s expertise. This renowned organization serves as the Impact Adviser, ensuring that the projects not only sequester carbon but also enhance biodiversity and support local communities. The strategy aims to restore approximately 135,000 hectares (over 330,000 acres) of natural forests and to establish sustainably managed commercial tree farms on another 135,000 hectares of previously deforested and degraded land.
“This transaction represents a new era for conservation,” said Mark Wishnie, Chief Sustainability Officer of TIG. “We are proud to partner with Microsoft, whose commitment to high-quality carbon removal credits is helping to build a high-integrity carbon offset market.”
Pioneering Conservation Efforts
With the Cerrado biome in Brazil as a focal point, the strategy targets one of the world’s most biodiverse but threatened ecosystems. Approximately half of the Cerrado has already been converted for other uses, facing high rates of deforestation driven by agricultural expansion. TIG’s efforts, supported by Conservation International, aim to halt and reverse this trend by restoring degraded lands and promoting sustainable land management practices.
To date, TIG has invested in 37,000 hectares, planted over 7 million seedlings, and initiated the restoration of approximately 2,600 hectares of natural forest. These actions are part of a broader vision to scale nature-based solutions that address climate change and biodiversity loss.
Microsoft’s Commitment to Carbon Neutrality
This purchase is a significant step towards Microsoft’s ambitious goal to be carbon-negative by 2030 and to remove all historical operational emissions by 2050. “Advancement towards Microsoft’s carbon-negative goals necessitates innovative projects that can swiftly and sustainably scale carbon removal,” stated Brian Marrs, Senior Director for Energy & Carbon Removal at Microsoft. “This project exemplifies how reforestation and restoration can deliver carbon removal at scale while supporting local communities and restoring vital ecosystems. It also underscores Microsoft’s unwavering commitment to environmental sustainability and carbon neutrality.
The collaboration between TIG and Microsoft highlights how corporate leadership and investment can drive large-scale environmental benefits. “This commitment from Microsoft proves that we don’t have to compromise our future for our balance sheets,” said Dr. M. Sanjayan, CEO of Conservation International. We can restore degraded tropical forests and remove carbon at scale, mobilize private capital, and protect nature without abandoning economic production.”
Enhancing Biodiversity and Community Livelihoods
Beyond carbon sequestration, TIG’s strategy includes significant efforts to enhance biodiversity and support local communities. On the strategy’s first property, over 297 species have been identified, and a 400-meter-wide riparian buffer is being created to connect nearly 10,000 hectares of natural habitat. TIG has also launched a multi-year research program with the University of Viçosa to study Cerrado restoration techniques, including assisted natural regeneration, direct seeding, and native seedling planting.
These projects not only bring about environmental benefits but also create economic opportunities for local communities. TIG conducts training sessions on seed collection, offering new sources of income by supplying seeds to the growing restoration market. For instance, in collaboration with the Mato Grosso do Sul Native Seed Network, TIG provided native tree seed collection training to community members in September 2023, thereby empowering local communities and fostering economic growth.
A Model for Sustainable Investment
The carbon credits generated through this strategy are expected to meet or exceed leading carbon accounting standards. 60% of the credits are attributable to carbon sequestration in newly restored native forests, and 40% to carbon sequestration in sustainably managed commercial tree farms. These credits form part of a comprehensive climate impact strategy that includes managing tree farms on long rotations to maximize carbon storage and produce durable wood products.
“The scale of this undertaking demonstrates the potential in Brazil and other Latin American countries to deliver significant climate benefits while supporting vibrant rural economies,” said Wishnie. “With the UN biodiversity summit coming up this year in Colombia and the UN climate summit next year in Brazil, there is a real opportunity to showcase leadership on the global stage.”
The collaboration between BTG Pactual Timberland Investment Group and Microsoft sets a new benchmark for large-scale, nature-based carbon removal initiatives. By focusing on reforestation and sustainable land management in Latin America, this partnership not only addresses urgent climate challenges but also supports biodiversity and local communities. As companies like Microsoft continue to lead in corporate climate action, the potential for transformative environmental and social impact becomes increasingly attainable, instilling a sense of hope for a greener future.
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