Brazil: Third V&M’s go under CDM for their tree plantations
Registered on last January 22, the “Project
0143 : UTE Barreiro S.A. Renewable Electricity Generation Project”
of Vallourec & Mannesmann (V&M), the world's largest manufacturer
of seamless hot-rolled steel tubes, is the third try of the company
to get funds under the Clean Development Mechanism (CDM) scheme.
The registered project will provide V&M with 67954 carbon
credits it can sell to companies in the North who prefer buying
such carbon credits to reducing emissions at home.
The project alleges to be “a renewable
energy project” which consists of the construction and operation
of a thermoelectric plant fired by blast furnace gas and wood
tar to generate part of the electricity required by V&M Barreiro’s
Integrated Steel Plant (Usina Siderúrgica Integrada de Barreiro),
thus displacing electricity generation from a more fossil-intensive
grid and reducing greenhouse gas emissions in the process.
According to the Project Design Document
(PDD) “wood tar is collected during the carbonisation process
where charcoal is produced from wood obtained through sustainably
managed forestry activities” (emphasis added). This refers
to wood extracted from the same eucalyptus tree plantations located
in Minas Gerais, Brazil, where V&M company guards shot peasant
Antônio Joaquim dos Santos in February 2007 (see WRM Bulletin
Nº 116).
As a result of the ensuing denunciations
about the killing,, and because V&M’s plantations were FSC
certified, an audit was carried out by the FSC accredited certifier,
SGS. The company preempted a potential loss of the certificate
by announcing its “decision to voluntarily withdraw from FSC after
8 years of very close relationship” on the grounds that it did
not agree with the way in which the certifying body (SGS) had
carried out its audit (see WRM Bulletin
Nº 116).
Those “sustainably managed” eucalyptus
plantations have also been intrusive because they have encroached
on lands previously occupied by peasants and are now undermining
the struggles of the local people to recover their lands. They
have also generated disputes with the small farmers regarding
the use of agrochemicals, the blocking of roads or the alteration
of and access to water resources.
In spite of all this, Det Norske Veritas
(DNV), one of the main validators of CDM projects, had approved
the controversial V&M Fuel Switching project, which was another
CDM project of the company where it asked for carbon credits in
order to keep using charcoal for their steel plants. V&M argued
that without those carbon credits it would be unable to maintain
the plantations. V&M and DNV had claimed that V&M plantations
were managed sustainably and used the FSC certificate as evidence.
The fuel switch methodology was rejected
by the Executive Board of the Clean Development Mechanism, pointing
to “doubts” about the scenario presented by V&M: that without
additional carbon money a switch to coal under current trends
in the Brazilian pig iron industry would be unavoidable. The Panel
expressed concerns about the “immaterial nature of the project
activity and the moral hazard related to the fact that [it] consists
of continuing current practice.” (See WRM Bulletin
Nº 92)
The CDM however accepted V&M’s ‘renewable’
energy project, and its project documents make no mention anywhere
that the plantations were at risk should there be no extra carbon
money available. This contradiction between the two project documents
aside, the ‘renewable’ energy project that has been registered
as CDM project now has another problem: V&M does not possess
an FSC certificate anymore hence its “sustainability claims” and
claims about “renewable” energy production are not backed up by
anything anymore and the previous justification has been cancelled.
As a result the CDM should de-register the project immediately.
All this may be a good example of how
impossible it is to really verify the claims made about additionality
of CDM projects, the poor checking of any sustainable development
claims in the CDM process as well as a perfect example of how
polluting companies use the CDM to gain extra carbon credit money
for their business.
By Jutta Kill, FERN / SinksWatch Initiative,
e-mail:
jutta@fern.org, www.fern.org,
www.sinkswatch.org; and
Raquel Núñez, WRM, e-mail:
raquelnu@wrm.org.uy, http://www.wrm.org.uy/
