Climate

Material Topics

Energy efficiency: (GRI disclosure: 302-1, 302-2, 302-3, 302-4, 302-5)

Efficient use of energy, prioritizing energy from clean (renewable) sources).

Climate changes: (GRI disclosure: 201-2, 305-1, 305-2, 305-3, 305-4, 305-5)

Planning, policies and actions to mitigate emissions, establish low carbon production and adapt to the scenario of a planet with a higher average temperature.

GRI 3-3 (302) Material topic management: Power

Bracell is energy self-sufficient. The recovery boiler produces the steam that feeds the generator tubes for energy production. This occurs in the two factories of the company, in Bahia and São Paulo. The company uses energy from the national electricity grid only at specific times, such as periods of general shutdown of the factories for maintenance, in the forestry area and in nurseries. Other fuels are used in machines, generators, trucks, buses and light vehicles in handling operations.

The new flexible lines at Lençóis Paulista (SP) also have a biomass boiler that uses waste from the eucalyptus itself and other substances from the dissolving cellulose production process, including black liquor, to generate renewable energy. They were developed to operate without consuming fossil fuels and to generate clean energy for the Brazilian market. The SE 440kV has an installed transformation capacity of 409MW, enough to supply the factory and sell a surplus of energy in the national GRID in the order of 150 to 180 MW, green and quality energy, capable of serving 750 thousand homes or about three million people.

Reducing energy intensity, efficient use of energy and investing in a low-carbon energy matrix are initiatives carried out by Bracell to reduce emissions.

At both Bracell’s industrial sites, in Bahia and São Paulo, specialized teams are dedicated to creating strategies to reduce energy consumption, raise user awareness and optimize costs.  The São Paulo site has the Internal Energy Conservation Commission (CICE) that works to provide energy efficiency gains in industrial processes. Regarding the energy generated, the industrial operation in São Paulo produced 219,454 MWh – (Line 01) and 306,135 MWh (Line 02) – from the recovery boilers and the fluidized bed boiler.

In 2021, total energy consumed by Bracell was 3,475,952.06 GJ. The increase is due to the fact that Bracell is expanding, with the beginning of operations of two new flexible lines in the Lençóis Paulista (SP) site and the broadening of pulp production.

Largest and Greenest: the two new flexible lines at our Lençóis Paulista plant, which began operation in 2021, have made Bracell the world’s largest producer of dissolving pulp by installed capacity.

A third-party assessment commissioned by Bracell confirmed that the Lençóis Paulista mill meets best available technology standards as described in the European Commission’s “Best Available Techniques (BAT) Reference Document for the Production of Pulp, Paper and Board, 2015”. The review compared its BAT findings with the mill’s future pulp lines when in normal operation.

Learn more about Bracell two new flexible lines attributes, situated at Lençóis Paulista site: Project Star.

GRI 302-1 Energy consumption within the organization

History of energy consumption within the organization (GJ)¹

1 In 2020, Bracell reported its energy consumption in MWh and, as of this year, it chose to present values ​​in GJ, the most frequently adopted standard for reporting this disclosure.

GRI 302-2 Energy consumption outside the organization

Bracell is a company founded in 2019¹ which is investing in the expansion of its operations and, for this reason, does not possess the entirety of energy consumption data outside the organization, in 2021. The company recently began its operations in two new flexible lines at the Lençóis Paulista (SP) site, beginning in September 2021, so it is still in the process of building the baseline regarding the current magnitude of its operations. Energy consumption management and the monitoring of risks and potential impacts on climate change are strategic issues for Bracell, to be managed in line with the company’s Sustainability Strategy (find out more in the topic Sustainability Strategy, in GRI disclosure 3-2).

NB:

1. Bracell is a Brazilian company – founded in April 2019, with operations in Bahia, Mato Grosso do Sul and São Paulo -, a member of the Royal Golden Eagle (RGE), a holding with global operations, with headquarters in Singapore, which counts on a group of companies aimed at the transformation of natural resources. RGE (Royal Golden Eagle) Group began its operations in Brazil in 2003, with the acquisition of BSC (Bahia Specialty Cellulose) and Copener Florestar, in Bahia. In August 2018, the company’s operation was broadened with the acquisition of Lwarcel Celulose, in São Paulo.

GRI 302-3 Power intensity

This GRI disclosure will not be reported, as the information is not available. Due to the growth process it has been experiencing in the past years, Bracell believes that the calculation basis for energy intensity is not yet stable and does not represent the reality of the company’s energy footprint.

GRI 302-4 Reduction of energy consumption

Bracell is investing in the expansion of its operations. For this reason, there was no reduction in energy consumption in 2021 compared to energy consumption in 2019 and 2018.

GRI 302-5 Reductions in the energy requirements of products and services

Bracell is investing in the expansion of its operations. For this reason, there was no reduction in energy consumption in 2021 compared to energy consumption in 2019 and 2018.

GRI 201-2 Financial implications and other risks and opportunities due to climate change

Bracell analyzes risks and opportunities arising from climate change in the strategic planning of the business and implements measures to ensure the company’s continuity in the medium and long term, as well as the sustainability of its operations and activities. The Climate pillar is part of the company’s Sustainability Strategy.

The new flexible lines at Lençóis Paulista (SP) also have a biomass boiler that uses waste from the eucalyptus itself and other substances from the dissolving cellulose production process, including black liquor, to generate renewable energy. They were developed to operate without consuming fossil fuels and to generate clean energy for the Brazilian market. The SE 440kV has an installed transformation capacity of 409MW, enough to supply the factory and sell a surplus of energy in the national GRID in the order of 150 to 180 MW, green and quality energy, capable of serving 750 thousand homes or about three million of people.

In 2021, Bracell sold a total of 107.605,63 GJ of energy, generated at its two plants, located in São Paulo and Bahia (read more in the GRI disclosure 302-1).

GRI 3-3 (305) Material topic management: Emissions

Bracell understands that reducing greenhouse gas (GHG) emissions, increasing the percentage of renewable energy in its energy matrix, developing operational solutions based on the logic of the circular bioeconomy, in addition to preserving biodiversity, are important areas of focus for combating climate change.

For this reason, the management guidelines for the topic are in accordance with the Paris Agreement, which, among other provisions, establishes as a priority the need to adopt measures that maintain the increase in the global average temperature “well below 2°C in relation to the pre-industrial levels, and strive to limit this temperature rise to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change”.

Bracell carries out an annual inventory of greenhouse gas emissions, in accordance with the methodology established by the GHG Protocol and the United Nations Intergovernmental Panel on Climate Change (IPCC) Based on this analysis, plans to reduce emissions are developed.

In 2021, Bracell carried out its first carbon inventory, jointly involving its two operations – Bahia and São Paulo – in the study. In 2020, the same study was carried out separately. In the carbon inventory, Scope 1, 2 and 3 emissions were accounted for, with their sources and respective amounts, in addition to carbon removals.

For the year, Bracell’s carbon balance was -5,334,303 tCO2e, which means that the company makes a positive contribution to the climate by removing more carbon from the atmosphere than it emits through its operations.

Additionally, in 2021, Bracell’s planted and native forest areas have a carbon stock of around 59,382,177 tCO2e (42,674,511 tCO2e of planted forest areas and 16,707,665 tCO2e of native vegetation areas). This means the company also contributed to reducing the concentration of carbon in the atmosphere, providing yet another example of its positive impact on the climate. See more details in the GRI 305 disclosures, below.

Similar to the methodology established by the Intergovernmental Panel on Climate Change (IPCC), Scope 1 considers the variation of forest carbon stocks in a given period of time as emissions or biogenic removals of soil use. Throughout 2021, the variations of Bracell’s carbon stocks – including the gains due to the development of planted forests and native vegetation, minus the loss due to harvesting in planted forests – resulted in removals from the atmosphere. This means that forest carbon stocks increased in one year.

Biogenic emissions not associated to Bracell’s forest carbon stock correspond to the use of renewable energy (Scope 1 – 2,352,640.368 tCO2e), CO2 emissions from fire outbreaks (Scope 1 – 149,723.599 tCO2e) and renewable fuels in Scope 3 (8,368.768 tCO2e). Fires happen mainly due to the dry period, which was more intense in 2021, in the State of São Paulo, both in planted forest areas and in native forest areas, generating CH4 and N2O emissions in the category of soil use change, even though the areas after the fire were not converted into other soil uses. In Bahia, there were no forms of alteration of soil use. It should be pointed out that Bracell does not deforest and only plants eucalyptus in anthropized areas.

GRI 305-1 Direct emissions (Scope 1) of greenhouse gases (GHG)

Annually, Bracell carries out an inventory of greenhouse gas (GHG) emissions, according to the methodology of the GHG Protocol and the Intergovernmental Panel on Climate Change (IPCC) of the United Nations. Based on this analysis, plans are developed to reduce emissions.

The company’s inventory presents data on direct (Scope 1), indirect (Scopes 2 and 3) and biogenic emissions from the two units, Bahia and São Paulo.

Direct emissions (Scope 1) are directly related to Bracell’s production process. Industrial production in Bahia has a higher volume of Scope 1 emissions compared to industrial production in São Paulo, and this is due to the characteristics of the dissolving pulp manufacturing process, which consumes a greater volume of natural gas. Because the production of kraft pulp, produced at the São Paulo plant, generates fewer emissions, removal from the operation was also higher compared to Bahia.

In 2021, Scope 1 emissions grew by 7.7% from 2020, due to the increase in production and the resulting increase in consumption of materials. This growth, however, was lower than CO2 removal, of 34.2%.

Similar to the methodology established by the Intergovernmental Panel on Climate Change (IPCC), Scope 1 considers the variation of forest carbon stocks in a given period of time as emissions or biogenic removals of soil use. Throughout 2021, the variations of Bracell’s carbon stocks – including the gains due to the development of planted forests and native vegetation, minus the loss due to harvesting in planted forests – resulted in removals from the atmosphere. This means that forest carbon stocks increased in one year.

Biogenic emissions not associated to Bracell’s forest carbon stock correspond to the use of renewable energy (Scope 1 – 2,352,640.368 tCO2e), CO2 emissions from fire outbreaks (Scope 1 – 149,723.599 tCO2e) and renewable fuels in Scope 3 (8,368.768 tCO2e). Fires happen mainly due to the dry period, which was more intense in 2021, in the State of São Paulo, both in planted forest areas and in native forest areas, generating CH4 and N2O emissions in the category of soil use change, even the areas after the fire were not converted into other soil uses. In Bahia, there were no forms of alteration of soil use. It should be pointed out that Bracell does not deforest and only plants eucalyptus in anthropized areas.

Regarding Scope 2 emissions, resulting from electricity consumption, the values ​​consider the emission factor of the Brazilian GRID, which increased from 0.06 to 0.012, in 2021, due to the dry period in the year, which made it necessary the availability of energy generated in thermoelectric plants.

Scope 3 emissions consider activities carried out by third-party companies and are classified as: TD Downstream-Mobile traveled kilometer; TD Downstream -Port to port; Good and services bought-Mobile TKM; Goods and Services bought-Mobile traveled kilometer; Goods and services bought-Mobile fuel; Plant-Port-Mobile traveled kilometer; Air Travel; Waste Treatment; and Effluent Treatment.

In the São Paulo operations, the largest volume of emissions occurred due to port to port sailing. Even though waterway transportation is the modal with the least emissions volume among other models, the distances are intercontinental, and therefore significant. In Bahia, Scope 3 emissions mainly stem from movement of finished products (port to port and bought goods and services).

Carbon Balance^{1, 2, 3, 4}

GRI 305-1, 305-2, 305-3

In TCO2e

1 The Balance calculation considers – Scope 1 + Scope 2 + Scope 3.

2 Emissions values ​​correspond to the use of energy from a renewable source, therefore they do not generate greenhouse gas (GHG) emissions.

3 In compliance with the IPCC’s parameters, Scope 1 does not consider biogenic emissions related to the natural carbon cycle. The amounts of total biogenic emissions correspond to the use of renewable energy (Scope 1 – 2,352,640 tCO2e), fire outbreaks (Scope 1 – 149,724 tCO2e) and Scope 3 (8,369 tCO2e). Fires happen mainly due to the dry period, which was more intense in 2021, in the State of São Paulo.

Fire prevention and fire fighting

Bracell establishes partnerships focusing on fire prevention and firefighting. At its São Paulo operations, in 2021, an important governance restructuring on the issue was kickstarted, aimed at aligning practices with those already in full force in Bahia. There was also significant investment in technology. As of the second semester of 2022, the company will begin operations in the detection system through imaging in the total monitored area, without distinction for areas of difficult access. The main advantage will be the promptness identifying the outbreak and agility beginning fighting it. One outstanding initiative is the Amigos da Floresta (Friends of the Forest) program, aimed at preventing and combating forest fires caused by vandalism and lack of training by farmers to deal with burning techniques.

GRI 305-2 Indirect emissions (Scope 2) of greenhouse gases (GHG) from energy acquisition

Annually, Bracell carries out an inventory of greenhouse gas (GHG) emissions, according to the methodology of the GHG Protocol and the Intergovernmental Panel on Climate Change (IPCC) of the United Nations. Based on this analysis, plans are developed to reduce emissions.

The company’s inventory presents data on direct (Scope 1), indirect (Scopes 2 and 3) and biogenic emissions from the two units, Bahia and São Paulo.

Direct emissions (Scope 1) are directly related to Bracell’s production process. Industrial production in Bahia has a higher volume of Scope 1 emissions compared to industrial production in São Paulo, and this is due to the characteristics of the dissolving pulp manufacturing process, which consumes a greater volume of natural gas. Because the production of kraft pulp, produced at the São Paulo plant, generates fewer emissions, removal from the operation was also higher compared to Bahia.

In 2021, Scope 1 emissions grew by 7.7% from 2020, due to the increase in production and the resulting increase in consumption of materials. This growth, however, was lower than CO2 removal, of 34.2%.

Similar to the methodology established by the Intergovernmental Panel on Climate Change (IPCC), Scope 1 considers the variation of forest carbon stocks in a given period of time as emissions or biogenic removals of soil use. Throughout 2021, the variations of Bracell’s carbon stocks – including the gains due to the development of planted forests and native vegetation, minus the loss due to harvesting in planted forests – resulted in removals from the atmosphere. This means that forest carbon stocks increased in one year.

Biogenic emissions not associated to Bracell’s forest carbon stock correspond to the use of renewable energy (Scope 1 – 2,352,640.368 tCO2e), CO2 emissions from fire outbreaks (Scope 1 – 149,723.599 tCO2e) and renewable fuels in Scope 3 (8,368.768 tCO2e). Fires happen mainly due to the dry period, which was more intense in 2021, in the State of São Paulo, both in planted forest areas and in native forest areas, generating CH4 and N2O emissions in the category of soil use change, even the areas after the fire were not converted into other soil uses. In Bahia, there were no forms of alteration of soil use. It should be pointed out that Bracell does not deforest and only plants eucalyptus in anthropized areas.

Regarding Scope 2 emissions, resulting from electricity consumption, the values ​​consider the emission factor of the Brazilian GRID, which increased from 0.06 to 0.012, in 2021, due to the dry period in the year, which made it necessary the availability of energy generated in thermoelectric plants.

Scope 3 emissions consider activities carried out by third-party companies and are classified as: TD Downstream-Mobile traveled kilometer; TD Downstream -Port to port; Good and services bought-Mobile TKM; Goods and Services bought-Mobile traveled kilometer; Goods and services bought-Mobile fuel; Plant-Port-Mobile traveled kilometer; Air Travel; Waste Treatment; and Effluent Treatment.

In the São Paulo operations, the largest volume of emissions occurred due to port to port sailing. Even though waterway transportation is the modal with the least emissions volume among other models, the distances are intercontinental, and therefore significant. In Bahia, Scope 3 emissions mainly stem from movement of finished products (port to port and bought goods and services).

Carbon Balance^{1, 2, 3, 4}

GRI 305-1, 305-2, 305-3

In TCO2e

1 The Balance calculation considers – Scope 1 + Scope 2 + Scope 3.

2 Emissions values ​​correspond to the use of energy from a renewable source, therefore they do not generate greenhouse gas (GHG) emissions.

3 In compliance with the IPCC’s parameters, Scope 1 does not consider biogenic emissions related to the natural carbon cycle. The amounts of total biogenic emissions correspond to the use of renewable energy (Scope 1 – 2,352,640 tCO2e), fire outbreaks (Scope 1 – 149,724 tCO2e) and Scope 3 (8,369 tCO2e). Fires happen mainly due to the dry period, which was more intense in 2021, in the State of São Paulo.

Fire prevention and fire fighting

Bracell establishes partnerships focusing on fire prevention and firefighting. At its São Paulo operations, in 2021, an important governance restructuring on the issue was kickstarted, aimed at aligning practices with those already in full force in Bahia. There was also significant investment in technology. As of the second semester of 2022, the company will begin operations in the detection system through imaging in the total monitored area, without distinction for areas of difficult access. The main advantage will be the promptness identifying the outbreak and agility beginning fighting it. One outstanding initiative is the Amigos da Floresta (Friends of the Forest) program, aimed at preventing and combating forest fires caused by vandalism and lack of training by farmers to deal with burning techniques.

GRI 305-3 Other indirect emissions (Scope 3) of greenhouse gases (GHG)

Annually, Bracell carries out an inventory of greenhouse gas (GHG) emissions, according to the methodology of the GHG Protocol and the Intergovernmental Panel on Climate Change (IPCC) of the United Nations. Based on this analysis, plans are developed to reduce emissions.

The company’s inventory presents data on direct (Scope 1), indirect (Scopes 2 and 3) and biogenic emissions from the two units, Bahia and São Paulo.

Direct emissions (Scope 1) are directly related to Bracell’s production process. Industrial production in Bahia has a higher volume of Scope 1 emissions compared to industrial production in São Paulo, and this is due to the characteristics of the dissolving pulp manufacturing process, which consumes a greater volume of natural gas. Because the production of kraft pulp, produced at the São Paulo plant, generates fewer emissions, removal from the operation was also higher compared to Bahia.

In 2021, Scope 1 emissions grew by 7.7% from 2020, due to the increase in production and the resulting increase in consumption of materials. This growth, however, was lower than CO2 removal, of 34.2%.

Similar to the methodology established by the Intergovernmental Panel on Climate Change (IPCC), Scope 1 considers the variation of forest carbon stocks in a given period of time as emissions or biogenic removals of soil use. Throughout 2021, the variations of Bracell’s carbon stocks – including the gains due to the development of planted forests and native vegetation, minus the loss due to harvesting in planted forests – resulted in removals from the atmosphere. This means that forest carbon stocks increased in one year.

Biogenic emissions not associated to Bracell’s forest carbon stock correspond to the use of renewable energy (Scope 1 – 2,352,640.368 tCO2e), CO2 emissions from fire outbreaks (Scope 1 – 149,723.599 tCO2e) and renewable fuels in Scope 3 (8,368.768 tCO2e). Fires happen mainly due to the dry period, which was more intense in 2021, in the State of São Paulo, both in planted forest areas and in native forest areas, generating CH4 and N2O emissions in the category of soil use change, even the areas after the fire were not converted into other soil uses. In Bahia, there were no forms of alteration of soil use. It should be pointed out that Bracell does not deforest and only plants eucalyptus in anthropized areas.

Regarding Scope 2 emissions, resulting from electricity consumption, the values ​​consider the emission factor of the Brazilian GRID, which increased from 0.06 to 0.012, in 2021, due to the dry period in the year, which made it necessary the availability of energy generated in thermoelectric plants.

Scope 3 emissions consider activities carried out by third-party companies and are classified as: TD Downstream-Mobile traveled kilometer; TD Downstream -Port to port; Good and services bought-Mobile TKM; Goods and Services bought-Mobile traveled kilometer; Goods and services bought-Mobile fuel; Plant-Port-Mobile traveled kilometer; Air Travel; Waste Treatment; and Effluent Treatment.

In the São Paulo operations, the largest volume of emissions occurred due to port to port sailing. Even though waterway transportation is the modal with the least emissions volume among other models, the distances are intercontinental, and therefore significant. In Bahia, Scope 3 emissions mainly stem from movement of finished products (port to port and bought goods and services).

Carbon Balance^{1, 2, 3, 4}

GRI 305-1, 305-2, 305-3

In TCO2e

1 The Balance calculation considers – Scope 1 + Scope 2 + Scope 3.

2 Emissions values ​​correspond to the use of energy from a renewable source, therefore they do not generate greenhouse gas (GHG) emissions.

3 In compliance with the IPCC’s parameters, Scope 1 does not consider biogenic emissions related to the natural carbon cycle. The amounts of total biogenic emissions correspond to the use of renewable energy (Scope 1 – 2,352,640 tCO2e), fire outbreaks (Scope 1 – 149,724 tCO2e) and Scope 3 (8,369 tCO2e). Fires happen mainly due to the dry period, which was more intense in 2021, in the State of São Paulo.

Fire prevention and fire fighting

Bracell establishes partnerships focusing on fire prevention and firefighting. At its São Paulo operations, in 2021, an important governance restructuring on the issue was kickstarted, aimed at aligning practices with those already in full force in Bahia. There was also significant investment in technology. As of the second semester of 2022, the company will begin operations in the detection system through imaging in the total monitored area, without distinction for areas of difficult access. The main advantage will be the promptness identifying the outbreak and agility beginning fighting it. One outstanding initiative is the Amigos da Floresta (Friends of the Forest) program, aimed at preventing and combating forest fires caused by vandalism and lack of training by farmers to deal with burning techniques.

GRI 305-4 Intensity of greenhouse gas (GHG) emissions

The intensity of GEE emissions in 2021was 0.49 tCO₂e/t. This amount considers total emissions during the year and the ton volume produced in the same period.

GRI 305-5 Reduction of greenhouse gas (GHG) emissions

Bracell is in the process of expansion and began the start-up operation of the two new flexible lines at the Lençóis Paulista (SP) industrial site, built as part of Project Star in September 2021. For this reason, as well as the increase in energy consumed during the year (read more in the GRI disclosure 302-1), there was an increase in the volume of greenhouse gas (GHG) emissions, presented in the GRI disclosures 305-1, 305-2 and 305-3.

In 2021, total Bracell emissions were +636,549 tCO2e, with biogenic removals (Scope 1) of -5,970,852 tCO2e. Although there was an increase in the volume of GEE emissions, the company’s carbon balance was -5,334,303 tCO2e, which means that the company contributed in a positive way to the climate by removing more carbon from the atmosphere than emitting it, through its operations.

In addition, in 2021, Bracell’s areas of planted and native forest added up to a carbon stock of 59,382,177 tCO2e (42,674,511 tCO2e of planted forest areas and 16,707,665 tCO2e of native vegetation). This means the company also contributed to the reduction of carbon concentration in the atmosphere, another positive impact for the climate.