During this Board meeting, members will decide about the fate of one of the most controversial projects ever submitted to the CDM Executive Board. Project 2569 “Reforestation as Renewable Source of Wood Supplies for Industrial Use in Brazil” by Plantar S.A was vehemently criticized over the past years in numerous publications, videos, technical reports, open letters, legal documents and congressional investigations. Previous attempts by Plantar S.A to register the project under the CDM were rejected. Yet, despite the heavy criticism and previous rejections, the project is again requesting registration under the CDM. Following this latest registration request, another letter signed by more than 60 civil society organizations was sent to the CDM Executive Board in February 2010[1]. The letter emphasizes that Plantar has accumulated an enormous environmental, social and climate debt and demands the rejection of the project.

While the Board has not yet reacted on these claims, they have however requested a review of the project. TÜV SÜD, the validator of the project, did not make the PDD available for a period of 45 days on the UNFCCC website[2]. They only made it available for a period of 30 days from May 28 to June 26, 2008 and received no comments. Given the massive resistance against the project from civil society in Brazil it is hard to believe that nobody wanted to comment on the project. Rather, it is likely that none of the affected stakeholders were informed about the short commenting period and hence, could not submit any comments.

Since the period for public comment does not comply with CDM requirements, the scope of the review requests TÜV SÜD to clarify how they have validated the non-compliance with requirements for the public commenting period.

CDM Watch did a random check at TÜV SÜD´s website and found that TÜV SÜD added a new paragraph to the Plantar project information on their website stating “An additional period of 45 days (from March 01, 2010 to April 14, 2010) is provided for stakeholders to submit comments on the project, which will be considered by the DOE”[3].

However, according to CDM rules, the period of public comments must be announced at the UNFCCC CDM web site for a period of 45 days.[4] These new comments dates are not announced on the UNFCCC CDM web site[5] but are only available at a link to information uploaded for public availability[6]. Moreover, CDM Watch reminds that any comments received must be taken into account in the validation report[7]. CDM Watch does not understand the intention of TÜV SÜD to publish a new commenting period in this way. Expecting stakeholders to visit the websites of DOEs and hidden pages of individual projects on a daily basis does not provide meaningful opportunity for public participation.

Action to be taken by the Board: CDM Watch urges the Board to reject the project based on the claims made by numerous civil society organisations that were not taken into account in the validation of the project due to non-compliance of the DOE with public comment period requirements. Should the Board consider not rejecting the project, the DOE must make the PDD available at the UNFCCC CDM web site for a period of 45 days. After that, the DOE must take any comments received into account in a new validation report.

For more information about the project, see Burned – Plantar SA case study by Carbon Trade Watch[8]. In the following you find an abstract:

Plantar SA is a pig-iron and plantation company whose CDM project in the state of Minas Gerais, Brazil, was one of the first to be supported by the World Bank Prototype Carbon Fund (PCF), which anticipated the purchase of over 1.5 million CERs (around US$ 25 million, assuming credits are sold at US$ 15) in ‘emissions reductions’ by 2012[9]. Plantar and the World Bank promoted the project as a model operation that would plant trees, enhance workers’ safety and foster environmental education projects for children. As documented in “Carbon Trading: a critical conversation on climate change, privatisation and power[10]”, however, the company’s activities in the area of the project have illegally dispossessed many people of their land, destroyed jobs and livelihoods, dried up and polluted local water supplies, depleted soils and the biodiversity of the native cerrado savannah biome, threatened the health of local people, and exploited labour under appalling conditions. The proposed carbon-saving project helps sustain the environmentally damaging model of monoculture plantations and iron production that is responsible for this, while doing nothing to improve the climate.

The original project proposal, submitted as a forestry offset project was rejected by the CDM Executive Board. At first, Plantar claimed that there would be an ‘accelerated reduction in the plantation forestry base in the state of Minas Gerais’. It presented its plantations as forests but admitted that once it had cut down the trees and burnt them to make pig iron it would not replant them unless carbon issuance was forthcoming. When reminded that CDM rules do not allow credit to be provided for ‘avoided deforestation’, the company rewrote its design documents to emphasize other justifications.

The second attempt claimed that Plantar was preventing an otherwise necessary switch in the fuels for its pig iron operations from eucalyptus charcoal to more carbon-intensive coal or coke. In other words, the company claimed that carbon credits for its 23,100 hectare project were the only thing that could ensure charcoal supplies, even though Minas Gerais alone boasts 2 million hectares of eucalyptus plantations. Plantar itself owns rural properties covering more than 180,000 hectares, mainly devoted to eucalyptus for charcoal and almost all located in Minas Gerais, and provides management services for more than 590,000 hectares of plantations for itself and other companies in Brazil. The repeated rejection of this project should have led to it being scrapped, as some 143 local groups and individuals argued in a letter to the CDM Executive Board of June 2004: ‘[T]he claim that without carbon credits Plantar…would have switched to coal as an energy source is absurd… Yet now [Plantar] is using this threat to claim carbon credits for continuing to do what they have been doing for decades – plant unsustainable eucalyptus plantations for charcoal… It is comparable to loggers demanding money, otherwise they will cut down trees… [The CDM] should not be allowed to be used by the tree plantation industry to help issuance its unsustainable practices.’ But that was not the end of the matter, and the project was instead repackaged and re- submitted to the CDM in its component parts, which included a project to reduce methane in the tree-burning process, a revised reforestation project and a further project linked to the reforestation project, which claims to introduce a new iron ore reduction system in pig-iron processing.

In 2007, Plantar first managed to gain access to the CDM for its methane reduction project, which it expects to generate 112,689 CERs over a seven-year time span from 2004 to 2011. This involves nothing more complex than regulating the temperature of its ovens, and ensuring that they are adequately ventilated – a process that is dressed up in technical jargon with reference to a study conducted at a local university[11].

The reforestation project under discussion at the Board meeting this week promises ‘dedicated plantations’ grown for the production of charcoal that is referred to, euphemistically, as ‘renewable biomass’[12]. The company claims that the original rejection was not due to flaws in the project itself, but was rejected because CDM regulations on land use, land use change and forestry were not finalized at the time it was originally submitted. On this basis, it attempts to backdate the claim for carbon credits to 2000 – although the fact that the activities described in the project have already been underway for nine years is prima facie evidence that there is nothing ‘additional’ about it. The methodology of the second project, ‘Use of Charcoal from Planted Renewable Biomass in the Iron Ore Reduction Process through the Establishment of a New Iron Ore Reduction System’, was accepted by the UN Methodology Panel in mid-July 2009. Plantar argues that a new CDM methodology should be created relating to what it describes as an innovative method for reducing CO2 emissions from blast furnaces.

In fact, the project is wracked with discrepancies. For example, the Project Design Document admits that multiple sources will be used for the supposedly ‘sustainable’ charcoal, but no environmental assessment has been made of the plantations that would be used in addition to those of Plantar itself[13]. Plantar anticipates that the reforestation project would reduce over 3 million tonnes of CO2 over its 30-year time span, which could fetch the company around US$ 45 million from its buyer, the Netherlands CDM Facility, a Dutch government scheme managed by the World Bank. The iron ore reduction project aims to generate 2,133,551 CERs (around US$  30 million) over a seven-year time frame.