Internet giant and Facebook owner Meta is planning to buy carbon credits in Latin America. But what does this mean? And will it really help to reduce greenhouse gas emissions?
Carbon offsets allow companies to offset greenhouse gas emissions by paying for actions to cut emissions elsewhere to meet corporate climate goals. Each credit represents a reduction of one metric ton of carbon dioxide emissions. However, as Reuters points out, some companies are reducing their buying of credits amid widespread doubts that they serve to reduce emissions.
Nevertheless Meta has this week announced that it has agreed to buy up to 3.9 million carbon offset credits from Brazilian investment bank BTG Pactual's forestry arm up until 2038. Under the long-term contract signed by Meta and BTG Pactual Timberland Investment Group (TIG), Meta has agreed to buy 1.3 million carbon credits, with options to purchase an additional 2.6 million credits.
Meta has described the deal as its largest carbon removal transaction from a single project and as part of its commitment to reach net zero emissions across its value chain in 2030.
It’s not the biggest deal overall, though. In June this year, TIG announced the sale of 8 million carbon credits to Microsoft in what has been described as the largest-ever transaction of such credits worldwide.
Reuters says the actual value if the Meta deal has not been revealed but estimates it at US$16 million based on an average price for forestry carbon offsets last week of US$4.22 per credit.
The credits were generated by BTG Pactual TIG's forest restoration projects in Latin America, where it has reportedly planted more than 7 million seedlings.
