Brazilian startup partners with agricultural company to reforest degraded Amazon land By Reuters

Gabriel Araujo

SAO PAULO (Reuters) – Private equity-backed reforestation startup re.green has signed a partnership with Agro Penido to restore 600 hectares (1,482 acres) of land owned by the Brazilian agribusiness company with native species from the Amazon (NASDAQ: ) rainforest, it said in Monday.

Their partnership is the latest deal for a new reforestation business in Brazil, home to the largest swath of the world’s rainforest and host to the UN’s COP30 climate summit this year in the Amazonian city of Belem.

Local startups including re.green, AXA-backed Mombak and Biomas – a company founded by Suzano, Santander (BME:), Vale, Marfrig, Rabobank and Itau – have worked to buy land or partner with local farmers to restore Amazon areas.

Converting degraded land to forests can generate carbon credits, which companies buy to offset their greenhouse gas emissions voluntarily or through regulated markets like the one Brazil recently signed into law.

Companies such as Alphabet (NASDAQ: ) unit Google, Microsoft (NASDAQ: ), Facebook (NASDAQ: ) owner Meta and McLaren Racing have recently bought carbon credits from Brazilian projects.

The new deal for re.green marks the first time it has partnered to rehabilitate farmer-owned land, CEO Thiago Picolo told Reuters, noting that the company has already bought 13,000 hectares from ranchers.

“Purchasing land is an important model, but we always knew that for re.green to reach the desired size, we would have to work with landowners and involve them in this business,” said Picolo.

Re.green is backed by Brazilian billionaire Joao Moreira Salles and asset managers including Lanx Capital, Principia, Dynamo and Gavea Investimentos, which was founded by former Brazilian central bank governor Arminio Fraga.

Salles and Fraga are both on the board of re.green, which aims to restore one million hectares of land in Brazil, an area twice the size of Delaware. In May, he announced an agreement with Microsoft to restore 15,000 hectares in the Amazon.

The contract with Agro Penido covers areas near the indigenous Xingu Park in Mato Grosso, Brazil’s largest grain-producing state. Picolo said re.green plans to reforest less productive parts of Agro Penido’s farms, some of which could provide timber with carbon credits.

Picolo said the first phase of their partnership has the potential to generate about 300,000 carbon credits over the next few decades, each representing the removal of a metric ton of carbon dioxide equivalent from the atmosphere.

He said re.green can sell its reforestation credits at a premium, fetching about $50 to $100 in private deals.

Scientists see protecting the Amazon as key to combating climate change because of the vast amount of climate-warming carbon dioxide its trees absorb. Some critics complain that compensation allows polluters to avoid reducing their emissions.

Agro Penido, which has a separate joint venture with grain miller SLC Agricola, currently has almost 40,000 hectares producing soya, maize and cotton, with plans to expand to 65,000 hectares by 2027/28.

“This is the beginning,” Caio Penido, one of the owners, said of the re.green deal. He added that he will now evaluate other areas owned by the company, noting that it is possible to double the scope of the project to 1,200 hectares.