Meta(META.US) Buys Carbon Credits in Latin America, Deal Could Be Worth up to $16 Million

Meta Platforms(META.US) said Wednesday that it has agreed to buy up to 3.9 million carbon offset credits from BTG Pactual's forestry division by 2038. The value of the deal was not disclosed. According to data provider Allied Offsets, the average price of forestry carbon offsets last week was $4.22 per credit. Based on this pricing, the deal could be worth up to $16 million.

Carbon offsets allow companies to offset greenhouse gas emissions by paying for other emissions reductions to achieve corporate climate goals. Each credit represents the reduction of one ton of carbon dioxide.

Meta has agreed to buy 1.3 million credits under a long-term contract signed by Meta and BTG Pactual Timberland Investment Group (TIG), and has the option to buy an additional 2.6 million credits.

Meta said the deal is its largest carbon offset transaction for a single project and part of its commitment to achieve net-zero emissions across its entire value chain by 2030.

According to the statement, the credits were generated by BTG Pactual TIG's reforestation projects in Latin America, where the company planted more than 7 million seedlings.

TIG announced in June that it had sold 8 million carbon credits to Microsoft (MSFT.US), the largest carbon credit transaction in history.

Despite a general slowdown in demand for carbon offsets last year, both Microsoft and Meta went ahead with the deals.

Companies including food giant Nestlé and fashion brand Gucci have reduced their purchases of carbon credits amid widespread skepticism about whether they help reduce emissions.