Shell Brasil buys part of Carbonext, carbon credits startup

Shell Brasil buys part of Carbonext, carbon credits startup

Carbonext, developer of REDD+ (Reducing Emissions from Deforestation and Degradation of Forests) projects, announced the contribution of R$ 200 million through a partnership with Shell Brasil

In its second round of fundraising, the carbonextdeveloper of REDD+ (Reducing Emissions from Deforestation and Degradation) carbon credit generation projects, announced a new investment of R$ 200 million in its capital, through a partnership with Shell Brazilwhich becomes a minority shareholder of the company.

The funds will be used to invest in technology embedded in forest preservation projects and for the development of new business areas, such as bioeconomy and reforestation in the Amazon Forest.

The entire management of Carbonext, which has been operating in the segment for 12 years, will remain in charge of its founding partners, forestry engineer Janaína Dallan, who is part of the Brazilian quartet of UN experts on Climate Change, presides over the Aliança Brasil for solutions based on nature and is the only Brazilian to integrate the panel of experts for the Integrity Council for Voluntary Carbon Markets (IC-VCM), and economist Luciano Corrêa da Fonseca, master in political science and former director of Pátria Investimentos.

The company will use the funds to expand its operations in new segments of the bioeconomy and expand the team of forestry specialists to create and manage projects to generate carbon credits, whose objective is to bring value to the standing forest — an economically viable alternative to livestock and to agriculture.

Since 2021, Carbonext’s commitment to the preservation of the Amazon Forest has led the company to increase by 340% the area of ​​preserved vegetation in the most vulnerable region of the forest, the Arco do Desmatamento (a corridor that runs from Acre to the south of Pará, passing through Amazonas, Rondônia and Mato Grosso).

In the first five months of 2022, the projects developed by Carbonext generated approximately R$150 million in credits in the voluntary carbon market, trading credits with companies and entities, such as BNDES, for example.

Partnership with Shell

The partnership with Shell will enable access to innovations and processes, including in the areas of biotechnology and monitoring. According to the companies, the synergies should increase the protection mechanisms of the more than 2 million hectares of Amazon Forest already protected by carbon credit projects developed or under development by Carbonext and its partners. The agreement establishes a series of joint actions over the next 100 days for the technical partnership to begin to show results.

“Our projects, associated with the actions of our partners, generated in 2022 the largest volume of forest carbon credits in the country, with certification and auditing by international organizations such as Verra. We are contributing to stop global warming, starting from the preservation of forests, and also to the essential discussions on the transition to a low carbon economy, such as the development of the bioeconomy. With the new partnership, the company will start to act with the most modern for the development and support for the management of the forest areas where they operate, enabling operations on an unprecedented scale.” say the co-CEOs of the company Janaína and Luciano.

For Shell, which sought out Carbonext to leverage its energy transition and decarbonization strategy, the partnership demonstrates Brazil’s relevance in the company’s journey towards the goal of zeroing its net emissions by 2050. The agreement with Carbonext marks the entry of Shell in the nature-based solutions business in the country.

Janaína Dallan and Luciano Fonseca, from Carbonext (Carbonext/Reproduction)

“Brazil, due to its location and biodiversity, is fundamental to our Powering Progress strategy, especially when we talk about respecting nature and boosting lives, in addition to achieving net zero emissions and generating value for shareholders. It is not today that Shell defends the creation and regulation of the carbon market. Associating our company with Carbonext is an important step towards our goal of offsetting 120 million tonnes of CO₂ per year by 2030 with nature-based solutions for Scope 3, which are emissions that are difficult to abate, in line with the mitigation hierarchy, ” said the president of Shell Brasil, André Araujo.

Until 2021, Carbonext managed the technical part of three carbon credit projects in native forest areas, at risk of deforestation, in the states of Acre and Amazonas. This year, other projects were made possible, totaling the approximately 2 million hectares of vegetation protected by the projects of the company and its partners. Each project is made up of one or more private lands that, after Carbonext takes action, now have a very attractive financial alternative that has been reversing the deforestation of areas for uses such as livestock or agriculture.

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