By Gabriel Araujo

SAO PAULO (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 indigenous species from the Amazon (NASDAQ:) rainforest, it said on Monday.

Their partnership is the latest deal for a new reforestation business in Brazil, home to many of the world’s largest rainforests and host of this year’s COP30 UN climate summit in the Amazonian city of Belem.

Local startups including re.green, Mombak backed by AXA and Biomas – a company founded by Suzano, Santander (BME:), Vale, Marfrig, Rabobank and Itau – are working to buy land or partner with local farmers to restore areas in the Amazon.

The creation of degraded forest land generates carbon credits, which companies buy to offset their greenhouse gas emissions voluntarily or through regulated markets such as Brazil’s recently written law. .

Companies such as Alphabet (NASDAQ: ) unit of Google, Microsoft (NASDAQ: ), Facebook (NASDAQ: ) owner Meta and McLaren Racing have recently bought carbon credits from Brazilian projects.

The new re.green deal represents the first time it has partnered to restore land owned by farmers, Chief Executive Thiago Picolo told Reuters, noting that the company had already purchased 13,000 hectares from ranchers.

“The purchase of land is an important model, but we always knew that in order for re.green to reach the scale it wants we need to work with landowners and involve them in this business, ” said Piccolo.

Re.green is backed by Brazilian billionaire Joao Moreira Salles and asset managers including Lanx Capital, Principia, Dynamo and Gavea Investimentos, 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 an agreement with Microsoft in May to restore 15,000 acres in the Amazon.

The Agro Penido deal covers areas near the Xingu Indigenous Park in Mato Grosso, Brazil’s largest grain-producing state. Picolo said that re.green plans to reforest the less productive parts of Agro Penido’s farms, some of which could provide wood in addition to carbon credits.

Picolo said the first phase of their partnership has the potential to produce about 300,000 carbon credits over the next few decades, each representing the removal of one metric ton of carbon dioxide equivalent from the atmosphere.

He said re.green could sell its reforestation-based credits at a premium, taking about $50 to $100 over private deals.

Scientists consider it important to protect the Amazon to prevent climate change because of the amount of climate-warming carbon dioxide its trees absorb. Some critics complain that the offsets allow polluters to avoid reducing their emissions.

Agro Penido, which has a separate joint venture with grains powerhouse SLC Agricola, currently has around 40,000 hectares producing soybeans, maize and cotton, which it aims to expand to 65,000 hectares by 2027/28. .

“This is a start,” said Caio Penido, one of the owners, about the re.green deal. He added that they will now examine other areas owned by the company, as it is possible for the project to double its area to 1,200 hectares.