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Tocantins aims to sell 50 million in carbon credits

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Deforestation reduction is key to the value and number of

credits

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Mercuria coordinating sale, submission to be validated

under

ART-TREES standard

By Jake Spring

SAO PAULO, Nov 14 (Reuters) - A Brazilian state that

straddles the frontier of the Amazon ( AMZN ) jungle is pursuing the sale

of more than 2.5 billion reais ($430.16 million) in carbon

credits related to forest conservation through 2030, the state

government said on Thursday.

Companies typically buy such credits to offset a portion of

their greenhouse gas emissions in pursuit of voluntary goals to

curb global warming, essentially paying for projects that cut

climate pollution.

Tocantins state aims to sell some 50 million carbon credits,

each amounting to one metric ton of carbon sequestered by

forests and other native vegetation across the state through the

end of the decade, the government said in a statement.

The value and number of carbon credits is contingent on the

state successfully reducing deforestation, it said. The state

government exclusively shared details of its planned issuance of

carbon credits with Reuters ahead of the official announcement.

Scientists say protection of the Amazon ( AMZN ) rainforest is vital

to curbing climate change because of the vast quantity of carbon

dioxide its trees absorb.

Brazil's federal government announced last week that

deforestation in Brazil's Amazon ( AMZN ) in the 12 months through July

had fallen to the lowest level since 2015.

Tocantins will submit its paperwork on Thursday to validate

the project under the ART-TREES carbon credit standard,

officially presenting the project at the United Nations COP29

climate summit in Azerbaijan.

Commodities trading firm Mercuria is coordinating the sale.

The submission will look to certify 17 million to 18 million

credits for carbon sequestered from 2020 to 2024, not including

credits set aside in case of wildfires or for other

contingencies, a person familiar with the deal told Reuters.

Those could be worth at least 850 million reais, based on

the government's overall valuation of the deal.

The sale of that batch of credits will likely close in the

second half of 2025, the person said on condition of anonymity,

as those details are not public.

The number of credits involved dwarfs deals this year by

Microsoft ( MSFT ), Google and Meta to buy

forestry carbon credits in Brazil, and also surpasses the Para

state government's agreement to sell credits to a group of

companies including Amazon ( AMZN ).

($1 = 5.8118 reais)