Amazon opens carbon credit offtakes to Climate Pledge signatories and other partners

Securing a reliable long-term supply of high-quality carbon credits requires a level of due diligence that is beyond the resources of many sustainability teams. Now buyers in those companies have a new option: sharing in offtake agreements signed by Amazon, one of a small number of businesses with the capacity to craft such deals.

The offering is available to signatories of Amazon’s Climate Pledge, which requires companies to commit to reaching net zero by 2040, and to value-chain partners of the tech giant. Buyers must purchase at least 100 credits — a tiny quantity for almost all companies — and are not subject to a minimum contract duration, said Jamey Mulligan, head of carbon neutralization science and strategy at Amazon.

Three offtake agreements previously signed by Amazon are available to eligible buyers:

• Ecological restoration in South Africa. The 120,000-acre project is a collaboration with the World Bank that aims to restore spekboom, a native plant prized for its drought resilience and high carbon sequestration. 
• Rice methane reduction in India. Funding from the offtake is used to help smallholders cut emissions by changing patterns of water use.
• Direct air capture (DAC) in Texas. Amazon has purchased 250,000 metric tons of carbon removal over 10 years from 1PointFive, which is building what is designed to be the world’s largest DAC facility.

Net-zero goals

Allowing other companies to participate in offtakes will help Amazon meet its 2040 net-zero goal, said Mulligan. “Most of what will be left in our footprint in 2040 will be in our Scope 3,” he explained. “And so we need our suppliers to be participating.”

Exactly how many credits Amazon and its suppliers will use to reach their net-zero goals is unclear, in part because the Climate Pledge does not specify the fraction of baseline emissions that can be offset at the end of a company’s journey to net zero. That’s been criticized as overly permissive and stands in contrast to the Science Based Targets initiative’s Corporate Net-Zero Standard, which requires companies to cut baseline emissions by at least 90 percent.

The offtake service builds on an initial program, announced around a year ago, under which Amazon lets Climate Pledge signatories and other partners make spot purchases of credits from projects it has backed. Mulligan declined to say how many credits had been sold through the program, but noted that progress had been slower than hoped due to supply-side problems.