Amazon now sells carbon credits. Here’s what you need to know

Amazon will let companies that have adopted comprehensive emissions reduction goals buy “high integrity” carbon credits generated by carbon removal projects already backed by the $638 billion e-commerce and cloud services company.

The new strategy, announced March 19, applies only to companies cutting greenhouse gas emissions across all three categories: Scope 1 (their own operations), Scope 2 (purchased electricity) and Scope 3 (indirect sources across their supply chain). It’s also available to the 550 signatories of the Climate Pledge, i.e., companies aiming to achieve net-zero status by 2040.

Companies that have already signed up include photo service Flickr, real estate firms Ryan Companies and Seneca Group, consumer electronics maker Corsair, office furniture supplier Steelcase and tech consulting firm Slalom. Interested companies can fill out this form.

“At Flickr and SmugMug, we invest in a number of nature-based solutions for impact beyond just carbon, but they often lack credibility,” said Flickr COO and President Ben MacAskill, in a statement. “Amazon’s expertise and scientific rigor means our team can meet our climate goals with confidence.”

Amazon’s in-house carbon project review process

Amazon is investing heavily in nature-based approaches for sequestering excess CO2 in the atmosphere, and it created its own methodology for evaluating them. That approach, called Abacus, considers issues such as durability (how long the trees are likely to last) and leakage (when a forest restoration project causes deforestation elsewhere).  

“We’re using our size and high vetting standards to help promote additional investments in nature, and we are excited to share this new opportunity with companies who are also committed to the difficult work of decarbonizing their operations,” said Amazon Chief Sustainability Officer Kara Hurst, in the March 19 announcement.

Amazon doesn’t disclose how many carbon credits it buys or retires annually to neutralize emissions. Nor is it revealing how many credits will be available through the new service, an Amazon spokesperson said. The first credits are from Amazon’s relationship with the LEAF Coalition, which has committed $1 billion to development in countries including Brazil.

Amazon reduced its emissions 3 percent year over year in 2023, primarily because of its expansive renewable energy purchases, but its footprint has increased 34.5 percent since its 2019 baseline year.

More than 75 percent of Amazon’s emissions come from Scope 3. The company has prioritized encouraging reductions from a list of high-emitting suppliers that contribute about half of that amount. This new service will support those efforts, although Amazon wants its partners to focus first on efforts to decarbonize their operations. Amazon won’t profit from this program, the spokesperson said.  

Aside from nature-based projects, Amazon has invested in one of the world’s largest direct air capture facilities. The installation by 1PointFive, under construction in Texas, is expected to capture up to 500 million metric tons of CO2 annually when complete. Amazon has committed to buying 250,000 metric tons of that capacity.  

Amazon’s bar for defining high-integrity is less comprehensive than the one set by the Voluntary Carbon Markets Initiative, which guides companies on how to use voluntary carbon markets for net-zero commitments, but it’s a step in the right direction, said Mark Kenber, the nonprofit’s executive director.

“Amazon’s new carbon credit service is a welcome development in scaling the voluntary carbon market,” Kenber said.

The post Amazon now sells carbon credits. Here’s what you need to know appeared first on Trellis.