First-ever carbon credits from protected areas of the Cerrado, Brazil’s second largest ecosystem

Brazilian aluminum producer “Companhia Brasileira de Aluminio” and green economy project developer “Reservas Votorantim” issued Latin America’s first carbon credits from the Cerrado biome on Tuesday (30).

“Reservas Votorantim” has certified an 11,500-hectare area in the state of Goiás that can generate about 50,000 carbon credits annually.

The issuance of carbon credits for protected areas in the Cerrado, Brazil’s second largest ecosystem after the Amazon, is unprecedented, according to the companies.

About 316,000 credits have been issued and auctioned. Bids can be submitted until the end of September. Each credit represents one ton of carbon emissions saved.

According to the companies, selling this first batch of credits could generate about US$5 million in revenue.

They base this on the retail value of Amazon carbon credits, which ranges from ten to eighteen U.S. dollars per ton.

However, for credits issued on land in the endangered Cerrado, the value would have to increase to encourage farmers to conserve.

David Canassa, director of Reservas Votorantim, said he considers forty U.S. dollars per ton to be a “break-even value,” the level at which farmers would be effectively compensated for preserving trees rather than growing soy in the Cerrado.

Under Brazil’s 2012 Forest Law, farmers must maintain thirty-five percent of the area of their land in this biotope and eighty percent if the farm is located in the Amazon.

The Cerrado savanna, Brazil’s main grain-growing area, is said to be destroyed faster than the neighboring Amazon rainforest, according to the NGO Worldwide Fund for Nature.

However, there are no official figures to confirm this claim.

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