Forestry investors in eucalyptus plantations could be excused for feeling a little light-headed,  if they have spotted the news from Brazil.

http://www.cop15brasil.gov.br/en-US/?page=noticias/green-steel-for-the-brazilian-steel-industry

The text below is from the Brazilian federal government’s website on December 4th 2009.

“Green steel for the Brazilian steel industry

Considered as an environmental villain, the steel industry may become an ally of the Federal Government in the challenge to reduce Brazil’s emission of greenhouse gases. The proposal presented by the Ministry of Environment aims to produce the “green steel”, which uses charcoal from afforested areas, instead of coal, to produce the pig iron (steel with impurity). As a result of the Brazilian proposal, the iron and steel industries will commit to use only charcoal in their high temperature furnaces.

Another point of the proposal conceives that the reposition of the timber used in the charcoal should be of 100% e will only involve exotic species like eucalyptus. This will ensure the preservation of the native vegetation. It is worth mentioning that one ton of pig iron produced from coal emits 1.9 tons of CO2, while the production of 1 ton of green steel removes 1.1 ton of gas from the atmosphere.

The news is good and specialists from the sector believe that, in the near future, the green steel will help the Brazilian steel industry to distinguish from its competitors abroad.”

Brazils President Lula da Silva, post Copenhagen said

“And we have decided other three important things: to reduce deforestation in the Cerrado biome; in our steel industry sector, we will work for the utilization of charcoal and not mineral coal, also with the objective of reducing greenhouse gases; and in our energy mix, which is already the cleanest in the world – considering electric energy alone, we have 85% of clean power generation. Brazil was, thus, in a very comfortable position. Brazil was considered, during the whole meeting, as the country that had the best proposal, as the country that worked on this issue appropriately. And thank God the governmental decision we have submitted to the National Congress was approved and is now a law. Therefore, this is no longer the will of President Lula. Now, whoever is governing this country will have to comply with it”.

Again the link is here:

http://www.cop15brasil.gov.br/en-US/?page=noticias/presidente-lua-afetr-cop15

http://blog.planalto.gov.br/cafe-com-o-presidente-conferencia-das-nacoes-unidas-sobre-mudanca-do-clim. There is translation needed here for the non Portuguese speakers amongst us.  The mp3 download of the presidents comments are obviously in Portuguese too.

So a very compelling case for Eucalyptus grown charcoal is being presented straight from the Brazilian government.

Coal being withdrawn as an option for iron and steel makers will  place a massive strain on supplies of charcoal.  The upshot of which will surely  be increased competition for degraded land to grow the forestry plantations and even more competition for the charcoal itself.  Being a naturally conservative forestry type of chap,  I have tried to find some words of caution to add to the story but as yet I can’t find any!   I haven’t spoken to Greenwood Management, our sponsors here,  but I can only imagine they must feel exceptinally bullish about the situation that is unfolding out in Brazil.

From my own perspective,  I believe the decisions that the Brazilian government are making should be welcomed with open arms.  They have made enormous progress in respect of cutting their rates of deforestation ( something id like to cover later this week).  The demand for steel is forecast to be strengthening as the world emerges from recession, and as of today,  I am unaware of a better immediate solution to ways of forging the iron in way that doesn’t destroy the climate through carbon emmissions.

Forestry Invest is sponsored by Greenwood Management. For more information on investing in Forestry please click here


Bookmark and Share

2 Responses to “Eucalyptus Charcoal.. Brazil’s choice for the steel industry”

  1. what is a hemroid Says:

    Eucalyptus Charcoal.. Brazil’s choice for the steel industry | Forestry Investment Blog is actually a pretty good website. I really like the design. You sure make me come back again. I have one question though. Is your theme a premium one and where can I find it? Thanks!

  2. HL Law Says:

    Could you consider another alternative for green steel is coconut charcoal?

    The biggest advantages with coconut charcoal is that it burns hotter, cleaner and its manufacturing process is much friendlier on the environment than traditional charcoal because coconut shells are the left over waste from the coconut industrial and therefore does not require cutting down trees.

Leave a Reply