Amazon Soy Moratorium Collapse Predicted to Drive 1.4 Million Hectares of Deforestation

For nearly two decades, a handshake agreement saved the Amazon from the chainsaws. Soy traders promised not to finance cropland carved out of deforested Amazon territory after 2008, and it worked. Deforestation-linked soy expansion fell from one-third of annual growth to nearly nothing. It was, by any measure, a rare victory for voluntary corporate restraint. However, the pact is almost over now. A new analysis published in the journal Science examined the rise and fall of the Amazon Soy Moratorium, one of the world's most successful voluntary deforestation commitments, under which soy traders agreed not to source or finance soy grown on land deforested after July 2008. The researchers found that the collapse of the landmark commitment will drive at least 1.4 million hectares (3.5 million acres) of extra deforestation in Brazil over the next decade, releasing carbon emissions equal to Canada's annual output.

How the Amazon Soy Moratorium helped the Amazon

In 2006, when the agreement first came into effect, nearly a third of annual soy expansion came from deforestation. Soy farmers had less area to expand into, and they also faced real pressure from traders who had staked their reputations on deforestation-free sourcing. Environmentally, the results were measurable and impressive. Once the moratorium took effect, deforestation linked to new soy fields fell to nearly zero. "It generated very positive effects and results," co-author Tiago Reis of World Wildlife Fund-Brazil told AFP. The positive effects were not limited to the environment; they also opened new markets. "It gave the assurance that soy was not causing more Amazon deforestation." However, that assurance didn’t last. It couldn’t survive economic pressure and political hostility.

How the pressure campaign broke the voluntary pact

Three years ago, the agreement came under attack. Soy farmers launched a $200 million lawsuit against the traders who had signed the moratorium. Simultaneously, Brazilian antitrust authorities opened an investigation alleging the signatories were behaving like a cartel. States like Mato Grosso passed laws stripping tax breaks from companies that adopted eco-friendly sourcing commitments beyond legal requirements. Though these laws are being challenged in Brazil's Federal Supreme Court, by January 2024 the moratorium was effectively dead. The timing is particularly brutal, as President Luiz Inácio Lula da Silva had returned to power in 2023, promising to crack down on Amazon destruction. In the first half of 2024, there was real progress, with deforestation in the Brazilian Amazon hitting its lowest level in a decade. But then the soy pact fell apart anyway.

Risk of deforestation

According to the researchers from the University of Wisconsin–Madison, DePaul University and the University of Illinois Urbana–Champaign, the outcome looks bleak. They predict an additional 1.4 million hectares of deforestation by 2036. This is roughly 2 million football pitches. The carbon cost will dwarf it all: 745 million metric tonnes of CO2, equivalent to Canada's entire annual greenhouse gas emissions. For some context, that's 17 per cent of the total forest loss the Brazilian Amazon has suffered over the past decade, all happening over the next twelve years. The most chilling part of the analysis is the vast area of public land that is neither protected nor privately held. Researchers estimate tens of millions of additional hectares of ‘undesignated’ public forest land could face pressure from land grabs now that the commercial brake on deforestation has been lifted. Reis explained that while cattle ranching typically comes first, establishing legal claims through occupancy, soy is still the strongest indirect driver of Amazon deforestation. Why? "Because it's the most valuable commodity that can be produced," Reis explained. The researchers recommend aggressive deforestation enforcement in Brazil and much more forceful sourcing demands from major soy importers like the EU and China. Banks and financial institutions need skin in the game too, they said, as this would push corporate clients towards zero-deforestation commitments. "It's outrageous if we consider that we are living in a climate crisis with heatwaves, with a super El Niño coming up," Reis said. The researchers also added that weather patterns, further worsened by climate change, will bring severe drought and wildfire risks across northern South America, conditions that would push the rainforest closer to irreversible collapse.