Brazil startup partners with agro firm to reforest degraded Amazon land

Reuters | 13 January 2025

By Gabriel Araujo

SAO PAULO, Jan 13 (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 firm with native species from the Amazon rainforest, it said on Monday.

Their partnership is the latest deal for the nascent reforestation business in Brazil, home to most of the world's largest rainforest and host of the COP30 U.N. climate summit this year in the Amazonian city of Belem.

Local startups including re.green, AXA-backed Mombak and Biomas - a firm established by Suzano, Santander, Vale, Marfrig, Rabobank and Itau - have been working to buy land or partner with local farmers to restore areas of the Amazon.

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

Firms such as Alphabet's unit Google, Microsoft, Facebook owner Meta and McLaren Racing have recently purchased carbon credits from Brazilian projects.

The new re.green deal represents the first time it is partnering to restore farmer-owned land, Chief Executive Thiago Picolo told Reuters, noting the firm has already bought 26,000 hectares from ranchers.

"Buying land is an important model, but we always knew that for re.green to reach the size it wants we would have to partner with landowners and involve them in this business," Picolo said.

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, whose goal is to restore 1 million hectares of land in Brazil, an area twice the size of Delaware. It announced a deal with Microsoft in May to restore 15,000 hectares in the Amazon.