Today, March 16, which is National Climate Change Awareness Day in Brazil, Vale announces that for the first time it has managed to produce commercial quality pellets on an industrial scale without using anthracite coal. In a test carried out in a pellet plant in Vargem Grande, Minas Gerais, Vale replaced 100% of the fossil fuel with biocarbon to fire the pellets (small balls of iron ore used to make steel). Biocarbon is a renewable, zero-emission product obtained by carbonizing biomass.

Anthracite coal accounts for around 50% of carbon dioxide emissions in pellet production, which is Vale’s most carbon-intensive process in terms of direct company emissions. Today, pelletizing accounts for 30% of Vale’s total Scope 1 emissions. The test began by replacing 50% of the coal with biocarbon, before gradually increasing up to 100%. In total, approximately 50,000 metric tons of pellets were produced, of which 15,000 tons were produced using 100% certified biocarbon.

According to engineer Rodrigo Boyer, who led the initiative, using biocarbon just in the Vargem Grande pellet plant will cut annual carbon dioxide emissions by roughly 350,000 metric tons, equivalent to the annual emissions of approximately 75,400 small 1-liter cars. “More tests will be carried out in 2023, of longer duration, to thoroughly evaluate the process. Only after this stage will we be able to generate information for the development of the necessary engineering work aimed at the definitive implementation of this project,” he explains. Vale’s executive manager for decarbonization projects, Rodrigo Araújo, says that the test is another major step on the company’s journey, in line with its commitment to reach net zero scope 1 and 2 carbon emissions by 2050. Scope 2 refers to indirect emissions from electricity purchases. “In the case of pelletizing, the use of biocarbon is our main initiative, due to the fact that there is great potential for biomass production in Brazil,” he says.

Climate Change

It isn’t a coincidence that Vale chose National Climate Change Awareness Day to announce the results of its biocarbon-based pellet production trial. The date was proclaimed by Law 12,533 of 2011, as a way of raising awareness and encouraging debate about the impacts of climate change on the planet and to stimulate the adoption of measures to mitigate these impacts.

Vale is investing between US$4 billion and US$6 billion to reduce its direct and indirect emissions by 33% by 2030, in accordance with the Paris Agreement, and with the aim of reaching net zero in 2050. Furthermore, by 2035, the company is committed to reducing its Scope 3 emissions, related to its value chain (i.e., suppliers and clients), by 15%.

“The climate agenda is a priority for Vale. For example, since 2020 the company has adopted an internal carbon price of US$50 per metric ton of CO2 equivalent when assessing capital allocation in new projects,” says Rodrigo Lauria, Vale’s executive manager for climate change.

To achieve these goals, the company has been investing in low-carbon technologies, such as the use of 72-metric-ton electric trucks, already in operation in Indonesia and Minas Gerais, and around 50 items of underground mining equipment in Canada. When it comes to Vale’s advances in Scope 2 emissions, the startup of the Sol do Cerrado solar plant in Jaíba in Minas Gerais stands out. This is one of the biggest solar farms in Brazil, with the capacity to generate enough power to supply a city of around 800,000 residents.

In relation to Scope 3 emissions, Vale has already partnered with more than 30 steelmaking clients, representing around 50% of the company’s emissions. In 2021, the company launched “green briquettes,” a product made up of iron ore and high-tech binders, allowing clients to cut their greenhouse gas emissions in steel production by up to 10%. Vale is converting two pellet plants in Vitória to produce green briquettes. The initial production capacity is approximately 6 million metric tons per year. In all, US$182 million will be invested in these two plants, which will start up by the end of this year.

Vale has also entered into agreements in Saudi Arabia, the United Arab Emirates and Oman to create “mega hubs” to make hot briquetted iron (HBI) and high-quality steel products using green briquettes. The production of HBI using natural gas, as planned in the mega-hub project, will emit approximately 60% less carbon compared to traditional steel furnaces that use coke and coal. In future, the replacement of natural gas with hydrogen and the use of renewable energy could eliminate CO2 emissions.

In shipping, Vale’s emissions are also Scope 3, as it does not have its own fleets. Tests are being carried out on ships equipped with rotor sails and air lubrication technology. The goal is to reduce emissions by up to 8% through low-carbon propulsion technology, using wind as energy.