Why Amazon’s funding spekboom planting in the Eastern Cape

Amazon is funding a massive planting of 180 million spekboom shrubs in the Eastern Cape aimed at restoring degraded land and generating carbon removal credits.

Spekboom has been studied extensively in South Africa for its ability to store carbon in the soil and to remove it from the atmosphere.

The project is expected to create around 11,000 jobs by 2030 and generate over R8-billion in economic value for local communities.

But why is Amazon doing this?

702’s John Perlman asked Ricky Stone, an environmental lawyer at Cullinan and Associates, to explain.

It seems the extremely effective leverage is the concept of carbon removal credits, Perlman said.

Amazon has committed to purchasing 1.95 million tonnes of nature-based carbon removal credits generated by the project.

But what are carbon removal credits?

“A carbon credit really simply is a certificate that represents one tonne of carbon dioxide, CO2 that’s either been removed from or kept out of the atmosphere,” explained Stone.

What is Amazon’s involvement in the Eastern Cape?

“Clearly, they see some financial upside to this. How does the upside work? asked Perlman.”

“So, the carbon markets as they work globally… there has been a lot of uncertainty there because to put it simply a farmer restores degraded vegetation using plants such as spekboom… Obviously, that’s a heavy capital outlay, but then no guaranteed buyers.

“So why this project, I think is really significant, is because Amazon are already the committed buyer and one, I think it’s just under 2 million tonnes of CO2 are mooted to be removed through the project,” Stone said.

According to him, more and more capital for these kinds of projects is coming from tech companies, especially.

“I think the answer is partly because of the energy intensity needs of, say, AI and these mega data centres, and they’re looking to, especially these, say, more recent novel type of concepts around nature-based financing to offset their own carbon emissions.

“I mean, you use the word credits on the other hand, there must be a debit in pure accounting terms. So, this is Amazon’s way of offsetting significant… carbon footprint on their own books.”