On Monday, A private equity-backed reforestation startup, Re.green, announced a collaboration with Agro Penido, an agribusiness firm, to plant native species to restore 600 hectares of degraded Amazonian land. This startup's first landowner collaboration comes as it looks to increase its restoration efforts.

The agreement covers land some 20 miles from the Xingu Indigenous Park in Mato Grosso, Latin America's main grain producer. The partnership brings less productive farmland back to productive farmland, creating carbon credits while offering potential lumber yield. In the initial phase, Re.green can produce 300,000 carbon credits over some decades, each clearing one metric ton of carbon dioxide equivalent from the air, according to Re.green CEO Thiago Picolo.

One of the latest of the 're.green' climate movements, backed by Brazilian billionaire João Moreira Salles and high-profile asset managers like Lanx Capital and Dynamo, hopes to restore one million hectares of land in Brazil—an area the size of Delaware twice over. In May, the company signed a deal with Microsoft (MSFT, Financial) to restore 15,000 hectares in the Amazon.

The market for carbon credits, driven by companies such as Alphabet's Google (GOOGL, Financial) and Meta (META, Financial), offers opportunities for projects like this. According to Re.green, private transactions for reforestation-based credits could see unbacked prices of $50 to $100 per ton.

Agro Penido, which produces some 40,000 hectares of soybeans, corn, and cotton, is currently evaluating additional areas that could be restored to the project, eventually reaching 1,200 hectares.