A charcoal sketch

by The Greenwood Team

Following the greenwood management “Brazilian samba beats the blues” blogpost, we’ve put our serious hats on today.

For those not familiar with the “Cerrado” region of Brazil, it’s a huge expanse of savanna, said by the World Wildlife fund to be the richest, biologically speaking, and the most important on our planet. More than 1600 species of mammals, birds and reptiles have been identified in the region.

Anyway its half gone.

Between 2002 and 2008, about 85 thousand square kilometres of vegetation was removed. A fair old whack.

The main reasons for degradation in the Cerrado are livestock farming, agriculture and production of charcoal from native forests for the steel industry.

On March 16th 2010, speaking about the Brazilian governments “Action Plan for Prevention and Control of Deforestation in Cerrado” the Minister for the Environment Carlos Minc put out his plan to make industry use charcoal which is not made from native trees, in order to protect the ecosystem in the Cerrado.

To be precise, Mr Minc said “We will open governmental lines of funding for the planting of commercial forests and will, moreover, reduce taxes on charcoal that comes from forest planted exclusively to be used as firewood and charcoal.”

Above photo- Brazilian Minister for the Environment, Mr Carlos Minc

So now we know that the carbon source for steel production must be from forestry instead of fossil fuels, and that the trees must be from managed plantations outside of the Cerrado region, a few questions spring to mind:

Where will the charcoal come from to replace all of the charcoal produced in the Cerrado?

How will enough forestry be grown in time to replace all the fossil fuels?

How hard will steel producers compete to secure long term supply contracts?

How large a supply deficit is likely to emerge?

What are the implications for charcoal values?

Interesting times ahead.