1. PROPOSED PROJECT Objective: To make charcoal from sustainably managed planations a viable alternative to coal/coke in pig iron production Project: 23,100 ha of FSC certified fuelwod plantations on degraded pasture or old plantation lands: (3,300 ha x 7 years); Cerrado forest ecosystem rehabilitation: 478 ha Improved Charcoal production (reducing methane, and local air pollution from condensable oils/tars, and particulates) Charcoal displacing Coal/Coke in Blast Furnace Pig iron production

2. Estimated Core Proposal ERs Category of ERsERs (t/CO2) by source over project life Substitution of Coke in Blast Furnace 5,946,000 Sequestration in Plantations and Forest Ecosystem Rehabilitation 4,300,000 Methane Emissions Reductions 1,781,000 Totals12,027,000

3. Certifiable Additional Benefits Biodiversity: restoration of endangered ‘cerrado’ ecosystem Reduction in atmospheric pollution Respiratory health of charcoal workers

4. Baseline Approach for Plantar Fuel-Switching Component –Scenario analysis based on historical trends –Investment constraints (most plausible approach is not financable without carbon) Charcoal Production Emissions Reductions –Control group of 10 peers in pig iron industry; included in MVP for revalidation (>50% rule) “Cerrado” Rehabilitation –Scenario analysis based on historical trends –Investment analysis (if needed)

5. Annexed Slides

6. Traditional Brazilian Brick Beehive Kiln used in about 90% of Brazilian charcoal operations Efficiency: about 4m 3 wood for 1m 3 Charcoal

7. Improved Brazilian Brick Kiln: < 2m 3 wood to 1m 3 charcoal (considered to constitute a baseline for the production improvement component of the project)

8. Advanced Brazilian Beehive Kiln collects tars and pyrolytic oils in smoke – minimizes local air pollution. Efficiency: better than 2m 3 wood per m 3 charcoal

9. CARBON STORED IN THE PLANTATION The chart below shows the accumulated carbon in one ha of forest, in the various parts of the tree, through three harvesting cycles.