Traditionally, steel companies have used charcoal as their main source of fuel and carbon for the steel making process. In 2008 it was reported that 30% of the 29.9 million tonness of steel produced was created using charcoal to fuel the process. Charcoal can come from either naturally growing vegetation or plantation vegetation, and is achieved by a process called carbonisation. Plantation charcoal is produced onsite, and typically charcoal from eucalyptus earns a premium compared to charcoal from native wood due to its higher calorific value.
Ten of Brazil's twenty-seven steel companies are located in Minas Gerais, the state that borders Bahia directly to the south. Due to reduced availability of native vegetation, tighter regulations and the increased production of steel, steel companies in Minas Gerais are being forced to procure charcoal from Bahia and further north to satisfy demand. Greenwood Management’s eucalyptus project’s main focus is this market. It is projected that the steel producers in Minas Gerais will increase their use of charcoal whilst moving away from utilising imported coking coal under regulatory pressure. Therefore plans were put in place in early 2008 to align the projects with this market.
In line with our projections the following commitments were announced at the Copenhagen climate change summit and this original article can be found on the Brazilian government's website
"The proposal presented by the Ministry of Environment aims to produce the "green steel", which uses charcoal from afforested areas, instead of coal, to produce the pig iron (steel with impurity). As a result of the Brazilian proposal, the iron and steel industries will commit to use only charcoal in their high temperature furnaces"