Tencent, Google and McKinsey Back 635,000 Carbon Removal Credits in Indonesia

Tencent has agreed to buy 300,000 carbon removal credits over 10 years from an agroforestry project in Sulawesi, while Google will purchase 260,000 credits and McKinsey another 75,000 from the same initiative. The agreement marks Tencent’s first carbon-removal deal outside China and places one of the country’s largest technology groups more directly into the international market for nature-based removals. With agroforestry credits in Asia priced at about US$21.40 on average, the transaction also shows that corporate demand for higher-quality removals remains active despite continued scrutiny of the wider voluntary carbon market.

The purchase supports Tencent’s goal of reaching carbon neutrality across its operations and supply chain by 2030. The company’s position is that direct emissions reduction remains the priority, but that high-quality carbon removals are needed to address residual emissions that cannot yet be eliminated. That framing is increasingly common among major buyers, but Tencent’s move is notable because it brings another large Asian corporate name into a market that has often been led by US and European firms.

 

Why Tencent’s First Overseas Deal Matters

 

The immediate significance of the agreement is geographic as much as environmental. Tencent has previously focused more heavily on domestic climate action, so an Indonesian offtake deal signals a broader approach to sourcing removals and managing its long-term climate commitments. It also suggests that large Chinese corporates may begin participating more actively in overseas carbon removal markets as demand for credible credits tightens.

The transaction also carries market significance because it comes at a time when buyer confidence in voluntary carbon markets remains uneven. High-profile questions around quality, permanence, and project verification have made many companies more cautious. Tencent’s willingness to commit over a decade indicates that demand still exists for projects that can combine measurable carbon outcomes with a credible land restoration and livelihood story.

 

Read more: Starbucks Emissions Rise 7% as It Reassesses 2030 Climate Goal

 

How the Sulawesi Project Is Structured

 

The Thryve.Earth project is designed around restoring degraded land in Sulawesi through an agroforestry system that combines carbon sequestration with productive agriculture. The model uses multiple crop layers, including sugar palm and timber trees in the upper canopy, papaya, avocado, coffee, and bananas in the middle layer, and annual crops such as chilli and corn closer to the ground. The aim is to increase biodiversity, improve soils, and create more resilient land use while also generating removal credits.

That structure matters because it gives the project a stronger economic foundation than a model dependent only on carbon revenue. Farmers are expected to benefit from crop income as well as from the long-term restoration of the land itself. In carbon market terms, this improves the project’s resilience because its value is not tied solely to credit demand, making it easier to argue that the environmental gains are aligned with local economic incentives.

 

What the Deal Signals for the Carbon Market

 

The fact that Google and McKinsey are also buying credits from the same project strengthens the importance of the transaction. It suggests the project has attracted multiple sophisticated buyers willing to commit long-term capital, which in turn gives the market more confidence in its design and due diligence. For Tencent, joining that group reinforces the sense that this is not a speculative purchase but a structured entry into a more selective part of the carbon removal market.

The deal also provides a counterpoint to concerns that corporate demand for removals may weaken after some buyers reassessed their purchasing strategies earlier this year. Instead, the Sulawesi project shows that demand is still present for projects that combine restoration, measurable removals, and economic co-benefits. The market is not disappearing, but it is becoming more discriminating, and that tends to favor projects with stronger underlying fundamentals.

 

Explore OneStop ESG Marketplace: Carbon offset services

 

What to Watch

 

The next question is whether Tencent’s purchase remains a single overseas deal or becomes part of a broader international removal strategy. If more major Chinese technology and consumer companies start looking beyond their domestic markets for carbon removals, demand patterns in Asia could shift materially. That would matter for project developers across Southeast Asia, especially those building land-based restoration projects that need long-duration corporate offtake support.

The other issue to monitor is project execution. In the current carbon market, long-term commitments are important, but delivery quality matters even more. Buyers will increasingly want proof that agroforestry projects can maintain carbon integrity, biodiversity value, and farmer income over time. Tencent’s first overseas deal is an important signal of demand, but the real test will be whether projects like Sulawesi can sustain credibility as they scale.