Once having dreamt of becoming a farmer and owning a ranch somewhere in the Amazon rainforest, Paulista Ricardo Stoppe is currently the owner of Brazil’s largest credit carbon seller, the Ituxi Group, which owns 1 million hectares in the world’s biggest rainforest. Stoppe actually did buy a farm and first tried to make money by raising cattle but it transpired that this would be far from an easy task. “Transportation is difficult and keeping up with environmental legislation is almost impossible,” he said. Yet, he says his farming experience in the rainforest “has changed various perspectives I had about life, nature, time, and even medicine”.
Switching from cattle to carbon credits was deemed to be a far-fetched idea by traditional farmers.
“Everyone called me crazy, but I wanted to combine a business that could protect the forest and help the planet,” he says.
However, this was not a simple process. He had to pursue certifications (costing US$250 million) for the land to convince auditors that the sound of the chainsaw would not be echoing all around. The first project, Fortaleza Ituxi, was created in 2013 and, since then, the Ituxi Group has gathered over a million hectares in eight certified carbon credit projects, focusing on preserving the Amazon rainforest. In 2023, the company surpassed the mark of 10 million credits sold.
In an exclusive interview with DevelopmentAid, Ricardo Stoppe provides valuable insights into the challenges faced by forest-preservation businesses in the Amazon, their contribution to offsetting carbon emissions, the degree of profitability of the carbon credit market and its development prospects in Brazil and elsewhere.
DevelopmentAid: Ituxi is known to be one of the largest carbon credit sellers in Brazil. With regulations capping gas emissions increasingly more, has there been a constant increase in the demand for carbon credits? Which companies are most interested in buying these?
Ricardo Stoppe: Ituxi is the largest carbon credit producer in Brazil and one of the largest in the world. Few carbon projects have such a vast area as ours. We have one million hectares and aim to reach three million in the coming years – an area larger than Belgium. We partnered with a fund called Azquest to raise funds to guide us in expanding our portfolio. One of our main market differentiators is that we have land ownership, a team responsible for project development, and a team responsible for selling these credits in the market. Few carbon credit companies have this structure.
And if we have this goal, it’s because the market is interested in Brazilian credits. We closed 2023 surpassing the mark of 10 million credits sold. At COP28, we negotiated deals with entrepreneurs from the Middle East, and we have many European companies that offset emissions with us because the regulated European market already has an above-average demand. Cepsa, Spotify, and Telefonica are among the European customers that have acquired credits issued by Ituxi, and the last batch of credits the company sold from its Evergreen REDD project was all bought by US aircraft manufacturer, Boeing.
DevelopmentAid: Brazil has recently regulated its carbon credit market. Has this changed anything in the way companies like Ituxi work? Does it stimulate the domestic market more?
Ricardo Stoppe: Brazil is still regulating its market; there are still technical steps missing for the regulated carbon market to truly come into operation. There is great anticipation for this process because a regulated market establishes the necessary rules for companies across the country to offset their carbon emissions in the atmosphere, so we expect this to further stimulate the purchase of carbon credits and make the price more competitive for those who preserve the land. Practically all the companies that emit more than ten tons of carbon dioxide will have to buy and offset their emissions. We work with the forecast that Brazil will need 1 billion carbon credits available in the market. This stimulates the country’s economy, but it also drives new carbon-generating projects to emerge in the market to meet a demand that is only expected to grow.
DevelopmentAid: Could you please make it clear for our readers what a carbon credit is and how it can help reduce gas emissions?
Ricardo Stoppe: We need to think of carbon credits as a compensatory system. If on one side of the chain there is a company or an industry that will continue to emit its polluting gases into the atmosphere, we need a mechanism to balance this polluting act. And carbon credits were created in climate conventions precisely to be this agent. Each credit offsets one ton of carbon emitted into the atmosphere. Here at Ituxi, we work with a specific type of credit, which is REDD+, this is the classification for credits generated by avoiding deforestation and wildfires. We carry out this work in one million hectares in the Amazon, divided into eight projects. By preventing this area from being degraded, we generate credits that are currently sold in the voluntary market – the market that does not require an intermediary to be traded. It only requires the producer, which is us, and a company interested in the global market to offset its emissions.
DevelopmentAid: There is much debate about whether carbon credits are the most effective solution for offsetting global warming. Can carbon credit producers meet the worldwide demand to offset gas emissions?
Ricardo Stoppe: I strongly advocate the idea that a standing forest is worth much more than a fallen one. What do you prefer: the Amazon with its preserved fauna and flora, or just a place for generating profit for illegal loggers, for miners who pollute the waters and kill indigenous people? When people ask me if it’s really worth investing in carbon credits, if they are truly effective in combating global warming, I always invite them to visit Ituxi up close. It’s not just about avoiding deforestation, but also about generating income for communities, preserving endangered species, and restoring centuries-old trees that are being lost.
Today, in addition to preserving these areas, we are launching specific reforestation projects and a public call for other farmers in the region, with degraded areas, to help them to recover their lands by replanting native forests. Of course, isolated projects won’t have the desired effect on their own. Thinking that just one technique is the solution is very idealistic, but it’s part of a set. Carbon credits, doing their part, help the planet and the people living on it.
DevelopmentAid: You have already said that Ituxi manages over 1 million hectares in the Amazon rainforest. What was the biggest challenge in achieving this milestone?
Ricardo Stoppe: The biggest challenge is the documentation of the lands traded in the Amazon. Verifying if the documents are genuine, if there is no forgery, if there is no part belonging to the government, this is the main obstacle for those who want to invest in this market here in Brazil. Unfortunately, the Amazon is a wild west. People from outside the Amazon buy lands here thinking it is easy to deal with ownership issues. Even if you have possession, they invade, challenge in court, and often hinder the progress of protecting these territories. One day you deal with some logger, another with an illegal miner, on the third there is an invader who wants to force you to sell to a third party who will clear it and raise cattle. Today this is one of our biggest costs: dealing with invaders and with improper legal proceedings.
DevelopmentAid: Your commitment as a carbon credit seller is to preserve the Amazon. What are the main difficulties in protecting lands in an area that suffers from constant deforestation?
Ricardo Stoppe: The Amazon is a world apart; only by experiencing it first-hand can you grasp the enormity and difficulty of working there. The areas are vast, and travel times are very long. We always have to be repairing the roads because of the constant rains, fixing the bridges that collapse. There is no presence of the Brazilian state there. We have to be the state, the contractor, the security. That’s why partnership with the riverside populations is so important. In addition to those who live there working on the projects, generating income for their communities, they help us to preserve the forest. When there is an invasion or irregularity, they are the first to inform us. Of course, we have a security team, but it’s impossible to manage such grand projects without collaboration, without working together.
DevelopmentAid: Since you’ve mentioned the riverside populations, how do you generate income for local communities in the Amazon?
Ricardo Stoppe: We have over 10 communities living within the Ituxi Group projects. They are our partners and work with us. In addition to REDD+, we have another well-known type of credit in the market, which is the CCB standard: Climate, Community, and Biodiversity. Within the community pillar, we have the duty to return part of these resources to those impacted by the credits, investing in infrastructure, new schools, access to solar energy, and internet connectivity. We also develop income-generating projects. We have communities that cultivate açaí, others coffee. And all this production is sold in the domestic market or exported to our partners. I think this cycle reflects very well what carbon credits have to offer: an alliance between climate control and a better quality of life for impacted communities.
DevelopmentAid: How do you maintain the security of the carbon credit projects?
Ricardo Stoppe: We have highly trained security teams to prevent invasions and illegal deforestation. We have airplanes, boats, motorcycles that patrol 24 hours a day. Today, it’s one of our main investments because carbon credits depend on it: the full protection of the forests. In addition to the physical team, we also rely on satellite monitoring to track remote areas to alert us if anything out of the ordinary is happening. And when we detect any irregularities, we rely on the help of the police to apprehend those involved.
DevelopmentAid: Many lands neighboring yours are owned by farmers who deforest their territories. Is there an understanding among your neighbors that preservation can be more profitable than planting crops and raising cattle?
Ricardo Stoppe: Many of our neighbors are cattle ranchers or soybean farmers. Most of them have questioned why I choose preservation. I always try to change this perception. We have even helped to plan land projects that were previously involved in deforestation. We always show that carbon credits can be more profitable than deforestation, but it’s still difficult. The market often faces distrust, discrediting studies, and delays in land verification and auditing. All of this influences the final price. So how can I approach the neighboring farmer and tell him to give up soybeans?
DevelopmentAid: What are your predictions for the development of the carbon credit market?
Ricardo Stoppe: My prediction is that the carbon credit market will expand and grow significantly by 2030. In less than a decade, many countries will start offsetting their carbon emissions, causing the price of credits to rise substantially. We already have the regulated European market, where credits cost $100 or more. With the Brazilian market, which currently averages around $11 to $12 per credit, the expectation is for further increases. Brazil has the potential to account for 40% of the global market, which means billions of dollars and tons upon tons of greenhouse gases kept out of the atmosphere.
DevelopmentAid: Brazil went through a rather environmentally unfriendly period during the Bolsonaro government. Incumbent President Da Silva has promised to reverse that negative trend. From your point of view, has the government done enough to save the Amazon?
Ricardo Stoppe: In my opinion, no government has been doing enough to save the Amazon. Deforestation continues and is becoming increasingly severe. It’s very challenging to control illegal logging and mining. If we don’t create alternatives to compete with cattle ranching and soybean and corn farming, it’s an unfair competition. We need to convince the population that standing forests have immeasurable value and that clearing them may generate profit in the present, but it poses a huge loss for the future of humanity.
See also: Advantages and disadvantages of carbon credits | Experts’ Opinions
