Dive Brief:
- Amazon has signed a long-term offtake deal to purchase 1.95 million metric tons of carbon removal credits as part of an investment in an ecosystem restoration project in South Africa, the company said in a Tuesday blog.
- The tech and e-commerce giant will purchase the carbon credits from the Spekboom Restoration Project being developed by ecosystem restoration project developer Imperative and carbon project company NatCarbon Africa. The term of the deal will run for “more than a decade,” Amazon said in its blog.
- Imperative first announced the collaboration in April, noting it raised $91 million in blended financing for the second phase of the project, which included a World Bank bond and an offtake deal with Amazon for an undisclosed amount of carbon credits. Amazon’s June 30 blog discloses the size of that offtake and said its agreement “enabled” the launch of the bond.
Dive Insight:
Amazon said supporting the project is part of its goal of reaching net-zero across its operations by 2040. The tech giant said the project will restore the ecosystem of spekbooms — also known as elephant bushes — because the plant “flourishes where many other plants struggle” and they gradually cool and restore the surrounding ecosystems as they mature, according to the blog.
The first phase of the Spekboom Restoration Project began in 2024 with the planting of 30 million spekboom plants across 10,000 hectares, according to its website. The second phase, which Imperative said it was able to underwrite due to the long-term revenue certainty from the Amazon offtake, will expand the nature-based carbon removal project by 50,000 hectares.
The second phase of the project was supported by a $25 million World Bank Bond and a $66 million facility from investors Mirova, GenZero, Rubicon Carbon and London-based investor Bregal Sphere, according to Imperative. Mirova, GenZero and Rubicon Carbon also invested in the first phase of the project.
Imperative CEO Scobie Mackay said in April’s release that “Amazon’s anchor demand has enabled us to bring together four institutional streaming capital partners and a World Bank outcome bond in a single financing structure.”
“This combination creates a financing blueprint that [Imperative believes] can be replicated across geographies and project types,” Mackay said at the time. “We see this deal as contributing to global efforts to make nature an investable asset class.”
The project is also expected to create around 11,000 jobs and inject $500 million into local communities through community investment, wages, procurement and landowner payments by 2030, according to Amazon. Amazon Chief Sustainability Officer Kara Hurst called the project “a story about nature, community, ingenuity and scale,” in the company’s June 30 blog.
“Spekboom is a natural wonder, but it can’t heal the land without help from the people who call the Eastern Cape home,” Hurst added. “This project will restore the ecosystem and create jobs — a model for how nature-based solutions can enable both climate action and economic development.”
When completed, the project is expected to reach at least 100,000 hectares with a projected yield of 35 million metric tons of carbon dioxide equivalent removed over 40 years.
Amazon said it will sell carbon credits from the project on its carbon credit service, according to the blog. The company launched the service last year, which is available to its United States supply chain partners, enterprise customers and signatories to its Climate Pledge who meet certain net-zero reporting, target-setting and planning criteria.
