Key Takeaways:
BTG Pactual Timberland Investment Group (TIG) has raised $1.24 billion for a reforestation fund in Latin America, a significant private-sector bet on nature-based carbon removal that defies both a shrinking global carbon market and a policy shift toward fossil fuels in some jurisdictions. The fund, now the largest of its kind, signals that major corporations are still pursuing long-term decarbonization strategies through carbon credits, even as the value of established carbon markets fell to a three-year low of $928.2 billion in 2025, according to LSEG data.
"These are very long-term commitments, and the shifts in sort of policy and politics in one place or another, particularly for companies or investors that have global footprints, those long-term plans have to take some of that volatility in policy environments into account," said Mark Wishnie, chief sustainability officer at BTG TIG.
The Latin America Reforestation Strategy fund secured commitments from a global group of investors including Microsoft, Brazilian miner Vale, and several development banks. The fund will acquire and restore approximately 660,000 acres of degraded land, primarily in Brazil’s Cerrado biome and Uruguay. The project, which began planting in 2023, aims to generate profits from both the sale of carbon credits and, eventually, sustainable timber, with harvesting not expected for at least 15 years.
This major investment in natural carbon capture highlights a growing divergence in climate strategy. While corporate and private investors are channeling billions into decarbonization projects, some governments are reversing course. The fundraising contrasts sharply with recent actions by the U.S. administration, which has canceled offshore wind leases in exchange for new investments in fossil fuel infrastructure. This dual-track reality suggests the path to net-zero will be complex, with significant capital flowing into both green and traditional energy sectors simultaneously.
The success of the BTG TIG fund underscores a persistent corporate demand for high-quality carbon offsets, which companies use to compensate for their own emissions. This demand exists alongside a challenging political environment for climate initiatives. In the U.S., the Trump administration recently reached deals to terminate two major offshore wind projects managed by Ocean Winds, a joint venture between ENGIE and EDP Renewables. The agreements will redirect nearly $900 million from the canceled wind leases into new domestic investments in liquefied natural gas (LNG) and other fossil fuel projects. This move is part of a broader strategy to bolster fossil fuels, which the administration deems more reliable and affordable than renewable sources.
This policy direction creates a complex landscape for investors and corporations navigating the energy transition. While the BTG fund demonstrates confidence in nature-based solutions, the cancellation of large-scale renewable projects shows that political risk remains a significant factor. The global carbon market itself has shrunk, with LSEG’s 2026 outlook noting that even established markets are “struggling to escalate climate action in the face of energy and geopolitical concerns.”
The debate over how best to remove carbon from the atmosphere often pits nature-based solutions, like the reforestation efforts backed by BTG’s fund, against engineered technologies like direct air capture. However, experts argue that this framing is a false choice and that a full spectrum of approaches is necessary to meet climate goals. According to an analysis in Nature, different methods solve different problems over different time horizons.
Fast-scaling methods like reforestation can deliver immediate climate benefits by removing carbon in the near term, even if the storage is not permanent. This is critical for reducing cumulative emissions over the next two decades. In the medium-to-long term, durable technological solutions will be required to neutralize residual emissions from hard-to-abate industries like cement and aviation. The BTG TIG fund represents a massive investment in the former category, aiming to leverage the rapid growth of trees in Latin America to sequester carbon quickly. Upcoming regulatory changes under the Paris Agreement, along with new corporate standards from the ISO and the Science Based Targets initiative, will be critical in defining the rules for both types of carbon removal and determining their ultimate value in the market.
This article is for informational purposes only and does not constitute investment advice.
