Vale Makes Its Debut In The Carbon Credit Market, Its Acquisition Was Carried Out Alongside Algar Group, Supporter Of The Entire Process

Vale, at a time when it is advancing its offerings of more sustainable solutions for its steel and basic metals operations, has just made a new market launch, the carbon credit.

Vale has closed a purchase of 133,000 high-integrity forest carbon credits, which is equivalent to the protection of about 50,000 hectares of forest located on a farm in Pará. The Algar Group, which owns a farm in Pará that is even larger than the city of São Paulo, made the acquisition together with Vale. The more than 130,000 credits correspond to over 130,000 tons of carbon not emitted, which, later this month, will be priced between US$ 10 and US$ 15 per ton in voluntary markets and 80 euros per ton for the regulated market.

The goal is to protect and restore more than 500,000 hectares of forests by 2030, according to the mining company. According to Algar, the purchase of 133,000 credits was made in 2022. The entire operation is managed by Fundo Vale and Algar Farming. This is the first time that Fundo Vale has adopted a REDD+ (Reducing Emissions from Deforestation and Forest Degradation) project.

The mechanism serves to reward companies and countries that maintain carbon stocks through forest management or even that reduce deforestation emissions. Currently, Fundo Vale is helping to protect over one million hectares, with about 800,000 being located in the Amazon. In approximately two years, the company has developed over five businesses and startups, closing a total of more than 7,000 hectares of planting, and also entered into contracts with nearly seven conservation units, which together total 115,000 hectares.

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Benefits for Natives

Following this first experience with the REDD+ project from Algar, Fundo Vale’s plan is to promote some other initiatives of this kind while also supporting the development of communities and chains—this region has about five. “The Fund plans to support the growth of the carbon market at a fair price that is attractive to the consumer, fair to the developer, but most importantly, that the benefits of carbon are redirected to those who live from and help protect the forest, which we call Impact Carbon,” comments the Participation Manager of Fundo Vale, Gustavo Luz.

This project, which started in 2017, is located at Fazenda Pacajá, owned by Algar Farming, in the municipalities of Porto and Bagre in the Marajó region, northern Pará. In total, the farm spans 145,680 hectares, and the initial idea is to preserve over 140,000 hectares of forest within it, being one of the largest areas of sustainable forest management in the country.

The goal is that over its 30-year duration, it will have avoided the emission of 40 million tons of carbon. “Sustainable forest management prioritizes keeping the forest standing, as its existence ensures the economic survival of forestry activities,” concludes Algar Farming’s forestry executive, Luciana Di Paula.