Paraguay
Building carbon removal where it can scale
FLS develops projects in locations where natural conditions, land availability, and market fundamentals can support long-duration forestry and carbon removal.
Paraguay combines advantageous biological growth conditions, attractive land-use economics, and a supportive environment for large-scale forestry and carbon removal projects. The country also benefits from growing regional demand for wood products.
Over the past five years, FLS has built a local team and a network of specialist partners to support project development and execution. This local presence is central to how the company identifies and develops projects in Paraguay, combining international project development expertise with on-the-ground knowledge and operational capability.
Competitive biological
growth conditions
Why Paraguay?
Investment-grade
sovereign profile
Land availability
at scale
Active engagement
in Article 6 carbon
markets
Conditions for scalable greenfield forestry
Unlike more mature forestry markets such as Brazil or Uruguay, where land is often constrained or fully valued, Paraguay still offers opportunities to develop degraded land at meaningful scale.
A warm climate and reliable rainfall support strong biological growth. In eastern Paraguay, commercial eucalyptus plantations commonly achieve mean annual increment (MAI) of 40 m3 per hectare per year, ahead of comparable rates in Chile and Uruguay. * Proximity to Brazil’s established forestry sector provides access to advanced research, regional expertise, and operational capability.
Investment-grade foundations
The case for Paraguay extends beyond biology. Policy continuity, improving sovereign credit quality, and a relatively stable macroeconomic environment are increasing its relevance for institutional capital.
Paraguay holds investment-grade credit ratings from Moody’s at Baa3 and S&P at BBB-. ** Many commercial transactions are effectively USD-linked, which helps reduce currency exposure.
The operating environment is business-friendly, with relatively streamlined regulations and a legal framework that permits direct foreign ownership of land.
Article 6 and international carbon markets
The continued development of international carbon markets is increasing demand for high-integrity carbon removal credits. Article 6 carbon credits, issued under the Paris Agreement's cooperative mechanisms, are expected to play an increasingly important role in cross-border carbon transactions.
Paraguay has made carbon markets a core element of its long-term development strategy, with Article6 at the forefront, and is pursuing bilateral agreements with buyer countries. ***
