Amazon, H&M, Walmart in US$180mn forest carbon credit deal with Brazil government

Global corporations including Amazon, H&M and Walmart, as well as the governments of Norway, UK, and US, have signed an agreement to purchase up to 12 million tonnes of forest carbon credits generated by the State of Pará, in northern Brazil.

The deal is estimated at around US$180 million, and was arranged by the LEAF Coalition, a public-private initiative driving market demand for jurisdictional forest projects – that is, carbon credit projects run by governments (instead of private developers) on large forest areas.

It will see buyers – including Amazon, Bayer, BCG, Capgemini, H&M Group, Walmart Foundation and the Norway, UK and US governments – purchase at least 5 million, and up to 12 million forest carbon credits generated by reducing deforestation in Pará over the years 2023 to 2026. 

Credits will be sold at a price of US$15 per tonne – more than double the average price on the voluntary carbon market last year and a sign that companies are willing to pay the price for higher-integrity carbon offsets.

Read also: BCG Chief Sustainability Officer David Webb on screening (and paying) for quality carbon projects

Carbon credits: Jurisdictional forest projects grow in popularity

Speaking to CSO Futures last year, Phil Brady, EVP, Marketing and Communications at Emergent Climate, the non-profit behind the LEAF Coalition, noted that considering “the urgency and enormity of the climate crisis”, delivering the finance needed at the scale required to halt tropical deforestation and reduce emissions would be impossible “without working at a jurisdictional scale”.

The deal reflects the growing confidence companies and state actors are placing in jurisdictional forest projects, after several investigations questioned the efficiency of their privately developed equivalents. 

NGOs and standard-setters including the Science-Based Targets Initiative (SBTI) have encouraged companies to support the development of jurisdictional projects, in part through forward purchases. But before today, the only other LEAF Coalition transaction involving the private sector was signed between Guyana and US oil and gas company Hess Corporation in 2022, for the purchase of 37.5 million carbon credits for a minimum of US$750 million between 2022 and 2032.

H&M: Recognising the connection between biodiversity and climate

H&M’s Director of Sustainability, Leyla Ertur, took a rare stance against the SBTI’s proposed expansion of carbon credit use to meet net zero goals last June – but she did ask the organisation to continue to work on targets for carbon offsets for ‘beyond value chain mitigation’, through which companies can invest in further decarbonisation outside of their own impacts. 

This is exactly what the company is doing with the Brazilian deal: “We are excited to be among the first companies to support the fight against deforestation in the Amazon with the LEAF Coalition and the deal with Pará in Brazil. At H&M Group, we recognise the deep connection between biodiversity and climate. We must work together to make a difference!” Ertur said on Linkedin.