Amazon has taken another major move in addressing climate change by launching a new carbon credit service on its Sustainability Exchange platform. This initiative helps businesses invest in quality carbon credits. It supports nature-based projects and advanced carbon removal technologies.
Amazon aims to enhance transparency, credibility, and corporate participation in voluntary carbon markets by offering access to vetted credits.
Amazon’s Next Big Sustainability Move
Amazon is making big changes to reach net-zero carbon emissions by 2040. It will switch to carbon-free energy, electrify its delivery fleet, and boost energy efficiency in data centers. The retail giant has achieved its 100% renewable energy goal 7 years ahead of schedule.
The company knows that cutting emissions is important. However, some emissions are hard to get rid of completely, where carbon credits come in.
Carbon credits provide a mechanism to offset these unavoidable emissions by funding projects that capture or prevent carbon from entering the atmosphere.
Amazon’s Chief Sustainability Officer, Kara Hurst, highlighted the need to tackle deforestation. It makes up 30% of global carbon emissions. She said that businesses can make real progress on their climate goals by investing in nature and technology for carbon removal. Hurst particularly remarked that:
“However, the science is clear: We must halt and reverse deforestation and restore millions of miles of forests to slow the worst effects of climate change. 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.”
How the Carbon Credit Service Works
The new service expands Amazon’s Sustainability Exchange. It gives companies tools to create and carry out sustainability plans. Qualified businesses can buy carbon credits to support their decarbonization efforts.
Key aspects of the service include:
- Science-Based Carbon Credits. Amazon makes sure that all credits on the platform meet strict environmental standards. This way, they provide real climate benefits.
- Support for Nature-Based Solutions. Projects that focus on reforestation, forest conservation, and land restoration. These efforts absorb carbon from the air and boost biodiversity.
- Investment in Carbon Removal Technologies. Amazon supports solutions like direct air capture and biochar. These methods help store carbon for a long time.
- Access for Climate Pledge Signatories. Businesses that have committed to The Climate Pledge can use this service to meet their sustainability targets.
Who Can Take Part in the Initiative?
Amazon set strict rules for companies that want to purchase carbon credits on its platform. Businesses must perform the following actions to be able to participate:
- Set a net-zero target that includes:
- Scope 1: direct emissions
- Scope 2: indirect emissions from electricity use
- Scope 3: emissions from the value chain
- Measure and publicly report their greenhouse gas emissions regularly.
- Put in place decarbonization strategies in line with the latest climate science.
Many companies have already joined the initiative. They include real estate firms like Seneca Group and Ryan Companies, consumer electronics brand Corsair, and the consulting firm Slalom. These businesses view Amazon’s platform as a trusted source of reliable carbon credits that can help them fulfill their climate goals.
Impact on the Voluntary Carbon Market
Amazon’s move into the carbon credit market could bring big changes. The voluntary carbon market, where companies buy credits to balance out their emissions, has faced issues like unclear rules and low-quality projects. Amazon’s involvement could help fix these problems in several ways.
Lately, fewer companies are buying carbon credits. They often doubt the projects are truly benefiting the environment. In 2024, the number of retired carbon credits stayed at about 175 million, the same as the past four years.
Some businesses worry that carbon offsets are not always effective, which has hurt demand (retired credits). By offering only high-quality credits with strict verification, the retailer is working to rebuild trust in the market.
Amazon’s entry into this space could also increase demand for carbon credits. When a major company like Amazon supports carbon credits, other businesses may feel more confident about using them. In 2024, investments in carbon projects hit $16.3 billion. This shows that companies will spend on climate solutions if they see them as real.
Additionally, Amazon’s leadership could push other large companies to create similar services. More competition in the carbon credit market can give businesses better choices. It can also direct more funds to projects that cut emissions.
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However, the voluntary carbon market has faced challenges lately. Amazon’s success will rely on its ability to ensure transparency and create real impact.
Amazon’s carbon credit service could help solve market problems. It may improve trust, boost demand, and encourage more businesses to invest in climate change projects.
Carbon credits can be useful, but many people are skeptical. Critics say they let companies postpone needed cuts in emissions. To tackle these issues, Amazon makes sure that businesses focus on reducing real emissions before buying offsets.
The company has also invested in Beyond Value Chain Mitigation (BVCM). This means they fund climate solutions outside their direct impact. Amazon has teamed up with the LEAF Coalition. Together, they have raised over $1 billion to protect tropical forests.
Looking Ahead: The Future of Amazon’s Carbon Credit Initiative
Amazon’s new carbon credit service shows a bigger move toward corporate responsibility in carbon markets. As demand for high-quality offsets grows, Amazon’s platform could play a vital role in scaling up investments in climate solutions worldwide. Yet, the long-term success of this initiative will depend on:
- Ensuring Market Integrity. Amazon must continuously track and improve the verification process for carbon credits.
- Encouraging More Corporate Participation. Expanding eligibility to a broader range of companies while maintaining high standards.
- Tracking Real-World Impact. Measuring and publicly reporting the climate benefits of the funded projects.
Amazon’s Sustainability Exchange expansion provides businesses with a valuable tool to offset unavoidable emissions while driving investments in environmental solutions. With this action, Amazon’s role in the voluntary carbon market is growing. Its leadership could set a new standard for responsible corporate action on climate change.
