São Paulo-based Systemica develops carbon credit-generating projects for biodiversity preservation and reforestation in South America. It has acquired Pará, Brazil-based forest management company Arapuá to expand its portfolio of carbon projects.
Arapuá’s projects focus on forest restoration by helping communities grow commercial crops like cocoa and açaí in forested areas. The company’s work stretches across roughly 1,000 acres in Pará. About 80% of its revenues come from agricultural sales and 20% from longer-term carbon credits.
“This model ensures financial resilience for the projects, as agricultural income is generated earlier while the carbon credits mature with tree growth,” the companies explained in a statement.
Strengthening carbon markets
Most of Systemica’s portfolio focuses on forest and land protection. It’s working to protect native plant and animal species in the Triunfo do Xingu Environmental Protection Area of Pará, which is facing deforestation from land theft, mining and livestock farming activities. The company is also working on a biodiversity preservation project with the Amazonian municipality of Itacoatiara in Brazil.
Given the scrutiny and controversy over preservation projects in the voluntary carbon markets, Systemica is expanding into restoration projects. Credits in restoration projects are generated by calculating tons of carbon removed, which fetch higher prices than carbon “avoidance” credits.
Systemica is looking to restore close to 100,000 acres of degraded land in South America by 2030, focusing on ecological restoration. Agroforestry systems like those it’s acquiring via Arapuá will help offset more costly ecological restoration efforts.
Last year, Brazilian investment bank BTG Pactual acquired a minority stake in Systemica “to foster the still incipient carbon credit market in Latin America.” Through its Timberland Investment Group, BTG also works in partnership with The Nature Conservancy on climate-smart forestry investments for institutional investors.
