Brazilian giant is investing R$19.3bn in the largest single production unit of this raw material in the world
12/15/2022
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Suzano’s eucalyptus forest in Mucuri, Bahia — Foto: Divulgação
More than 40 non-governmental organizations (NGOs) from different regions of the world have requested the International Finance Corporation (IFC), the financing arm of the World Bank for private-sector investments, to veto a $900 million loan to Suzano for the construction of a eucalyptus pulp mill in Mato Grosso do Sul.
The Brazilian company, the world’s largest producer of market pulp, is investing R$19.3 billion in a new production unit in Ribas do Rio Pardo with a capacity of 2.55 million tonnes per year, the largest single production line of this raw material in the world.
In the letter seen by Valor, entities such as Rainforest Action Network (RAN), Forests & Finance Coalition, and World Rainforest Movement (WRM) claim that the funding is not aligned with the purposes of the IFC.
According to them, the institution’s expectation that funded projects generate economy-wide effects and have positive environmental effects go against at least three impacts considered for the project: environmental, competitiveness enhancement, and fossil fuel-free technology.
As for the environmental effect, the organizations claim that the expansion of areas cultivated with eucalyptus, the raw material for Suzano’s pulp production, is leading to the “decline of species richness and reducing the remaining areas of Cerrado,” one of the country’s main biomes, which is at risk of extinction.
In addition, the organizations say, Brazil’s pulp and paper industry is “highly subsidized” and the construction of a new unit of Projeto Cerrado’s size would result in increased greenhouse gases – Suzano claims that the unit will be the most sustainable in the industry worldwide.
“We also note that there has been no real consultation with the affected communities, nor is there any expectation that preemptive consultation will take place. This is a clear failure,” the entities say. For them, Suzano’s new project will “further expel local communities from their lands.”
The IFC will decide this Thursday about financing Projeto Cerrado, which already has funds from export credit agencies. Sought, Suzano has not yet positioned itself on the issue.
In a note, Suzano said Projeto Cerrado is expected to generate 10,000 jobs at the peak of construction and thousands of indirect jobs, in addition to being in line with other “socio-environmental characteristics intrinsic to the company’s operations,” including proper use of soil and water, commitment to protecting and enhancing biodiversity through the implementation of landscape-scale corridors, zero deforestation, and close relationships with local communities.
“The construction of the new unit, as well as the company’s entire business model, is therefore aligned with the Commitments to Renew Life, a broad set of long-term goals that reflect the company’s motivation to positively impact society and the environment,” Suzano said in the note.
*By Stella Fontes — São Paulo
Source: Valor International