The goal is to recover up to 50 thousand hectares of forest and capture around 15 million tons of carbon
Petrobras and the Brazilian Development Bank (BNDES) signed a Memorandum of Understanding on March 31, for an unprecedented initiative that aims to purchase carbon credits generated from forest restoration in the Amazon. Called ProFloresta+, the program will promote the restoration of up to 50,000 hectares of degraded areas in the Amazon, capturing about 15 million tons of carbon (equivalent to that emitted annually by 8.94 million gasoline-powered cars).
In addition to being one of the largest carbon credit purchase programs for restoration in Brazil, ProFloresta+ is the first developed in partnership with a financier, BNDES. The initial phase of the initiative includes a public notice for the purchase of up to 5 million carbon credits, in an area of about 15,000 hectares, which will generate investments of more than R$450 million in restoration alone, in addition to 4,500 jobs.
A market consultation was opened on March 31 so that interested parties could contribute to the draft of the first public notice and the first carbon purchase contract.
'This is a very important initiative for Petrobras and for Brazil. It will enable us to meet our climate commitments with high-quality and high-integrity carbon credits and, at the same time, we will foster the development of the restoration sector in the country,' explains Petrobras CEO Magda Chambriard.
ProFloresta+ will select ecological restoration projects with native species that, through the reforestation of degraded areas, will generate carbon credits. The purchase of these credits will be guaranteed by Petrobras in long-term contracts ( offtake ), at a price to be defined by bidding. BNDES will offer financing for reforestation to developers of these projects through special credit lines, such as the Climate Fund, with rates and terms suitable for restoration projects.
'The program will contribute substantially to scaling up the restoration of the Amazon rainforest and to the decarbonization strategies of Brazilian companies. With the initiative, we will transform the restoration and maintenance of the forest, making them profitable for companies, local communities and, above all, for the environment, combining the environmental and climate demands of the country,' highlights BNDES president Aloizio Mercadante.
Photo: Petrobras’ Director of Energy Transition and Sustainability, Maurício Tolmasquim; Petrobras’ President, Magda Chambriard; BNDES’ President, Aloizio Mercadante; and BNDES’ Socioenvironmental Director, Tereza Campello, during the signing of the Memorandum of Understanding for the ProFloresta+ program. Credit: Marcelo Gonzalez
Unprecedented initiative
This is the first carbon restoration transaction to provide transparency regarding the contracted price and technical parameters covered, with a standard and public contract. This sets a high-level benchmark for the restoration and carbon credits market in the country, in addition to the Public Consultation on the notice.
The project had the technical support of the Nature Investment Lab (NIL), which also facilitated the dialogue with experts in the sector. NIL is an initiative created to promote nature-based solutions, developing replicable business models and supporting innovative financial structures for projects in Brazil.
The Climate and Society Institute (ICS) was also part of this unprecedented effort, led by Petrobras and BNDES, due to the potential for future replication of the model on an even larger scale. 'We relied on the expertise of our grantees and partners in this project: Agroicone and Imaflora worked on developing technical requirements for integrity, co-benefits and socio-environmental safeguards, and the law firm Mattos Filho provided legal advice. These parameters can serve as a reference for other offtakers in similar initiatives,' said Maria Netto, executive director of ICS.
'The expectation is that the establishment of a standard contract for purchasing carbon credits from restoration projects with high integrity and rigorous technical and socio-environmental criteria will serve as a reference to foster the development of the restoration and carbon credit market,' explains Petrobras’ director of Energy Transition and Sustainability, Maurício Tolmasquim.
BNDES’ Socio-Environmental Director, Tereza Campello, emphasizes that the initiative joins others by the Bank with the aim of promoting reforestation in the region, including the Restoration Arch area, and protecting the Amazon biome, a unique asset on the planet. 'BNDES has sought to diversify the forms of support for the recovery of native vegetation in Brazilian biomes. The climate and social crisis in the Amazon region requires urgent promotion of forest reconstruction, especially in the most degraded regions, such as the Arc of Deforestation, which we are now transforming into the Arc of Restoration,' says the director.
Source: Petrobras
