Vale makes its first purchase of carbon credits

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At a time when it is advancing in offering more sustainable solutions for the steel industry and base metals — essential for electric batteries —, Vale has just entered the carbon credit market for the first time.

The company closed the purchase of 133,000 high integrity forest carbon credits, equivalent to the protection of 50,000 hectares of forest, from a farm in Pará.

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The acquisition was made with the Algar Group, which maintains, in Pará, a farm with an area larger than the municipality of São Paulo. The 133,000 credits are equivalent to 133,000 tons of carbon that is not emitted, which this month is quoted between US$10 and US$15 a ton in the voluntary markets and 80 euros a ton in the regulated market.

The mining company’s goal is to recover and protect another 500,000 hectares of forest by 2030. Under the terms of the agreement with Algar, the purchase of 133,000 credits was made in 2022. The operation is carried out through Fundo Vale and Algar Farming .

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It is the first time that Vale has adopted a REDD+ project (Reducing Emissions from Deforestation and Forest Degradation). The mechanism serves to reward companies and countries that maintain a carbon stock through forest management or that reduce emissions from deforestation.

Currently, Vale helps protect one million hectares, 800,000 of which are in the Amazon. In two years, the mining company developed five businesses and startups, totaling more than 7,000 hectares of plantations, and signed a contract with seven conservation units, totaling around 115,000 hectares.

Benefit for those who live in the forest

Based on this first experience with Algar’s REDD+ project, the plan is to use Fundo Vale to encourage other initiatives of the kind and, at the same time, support the development of chains and communities – the region has five, including one quilombola. “The Fund intends to support the growth of the carbon market at a fair price that is attractive to the consumer, fair to the developer, but, above all, that the carbon benefit is reverted to those who live off the forest and help protect it, which we call it Impact Carbon”, explains Fundo Vale’s Equity Manager, Gustavo Luz.

The project, started in 2017, is located at Fazenda Pacajá, owned by Algar Farming, in the municipalities of Portel and Bagre, in the Marajó region, in the north of Pará. The farm has 145,680 hectares, and the idea is to preserve more than 140,000 hectares of forest on it, one of the largest areas of sustainable forest management in the country.

It is estimated that over 30 years, the project will avoid the emission of 40 million tons of carbon. The project is in the final certification phase. “Sustainable forest management prioritizes the permanence of the forest standing, since its existence is what guarantees the economic survival of the forest activity”, says Algar Farming’s forestry executive, Luciana di Paula.

All trees on the property located within the Annual Production Unit (UPA) are inventoried and georeferenced. After the forest harvest, the products receive a QR Code to identify the species and location, ensuring traceability and transparency in handling. The activity is based on a low environmental impact forest harvest, being proportional to the forest regeneration rate, with minimal impact.

Source: CNN Brasil

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