- Eucalyptus plantations in Brazil’s Alto Jequitinhonha Valley, grown to make charcoal for the steel industry, have drastically reduced local water resources, harming rural communities, locals and experts warn.
- Despite years of complaints by a local NGO, Aperam, the steelmaking company that owns the plantations, continues to hold FSC certification for sustainable forestry. A recent audit, however, has flagged problems in its most recent assessment for certification.
- Studies show that eucalyptus plantations in the region have lowered groundwater levels by 4.5 meters (nearly 15 feet) since the mid-1970s, jeopardizing the water supply for local communities and their livelihood.
- Aperam also profits from its plantations by producing biochar from eucalyptus waste, which it uses to boost soil carbon sequestration, and selling the concept as a form of carbon removal to companies looking to offset their own emissions.
Alto Jequitinhonha, Brazil — No photographs remain of João Gomes de Azevedo’s village before eucalyptus plantations radically transformed it. Instead, fragments of its past live on in a song that Seu João, as he’s better known, composed to remember what life was like in Poço de Água, a small rural village in the Alto Jequitinhonha Valley, an 11-hour drive from Belo Horizonte, the capital of Brazil’s Minas Gerais state.
Fifty years ago, João and hundreds of other farming families could freely graze their livestock amid lush vegetation and abundant water resources. That changed in the mid-1970s, when Brazil’s military dictatorship launched a massive industrialization plan to accelerate economic development in the country’s poorest regions, including the Alto Jequitinhonha Valley. Under this initiative, in 1976, almost 100,000 hectares (250,000 acres) of land, some occupied by local farmers but legally owned by the state, were handed over to the state-owned steel company, back then known as Acesita. Over time, 60% of the native vegetation in this expanse of Cerrado savanna was replaced by sprawling plantations of eucalyptus trees, which in turn were cut down to produce charcoal.
Acesita was privatized in 1992, and in 2011 the company and its plantations came under the control of Europe-based Aperam. Experts warn that these vast plantations have drained much of the water resources that once sustained the Alto Jequitinhonha Valley’s most marginalized communities, including quilombos, settlements established by formerly enslaved Africans. While hundreds of quilombola families struggle to secure water for farming and daily needs in this drought-prone region, Aperam labels its forestry operations as sustainable. Yet its certification by the Forest Stewardship Council has been criticized for failing to address water security issues and community needs.
Greener steel, less water
Poço de Água means “well of water” in Portuguese, but there isn’t much water to be found around here anymore. During the dry season, the landscape is as arid as the unpaved roads leading to the rural communities. When cars and trucks loaded with charcoal pass through, they kick up thick clouds of dust. “Almost all the springs have dried up, and the Rio Fanado, the only remaining river, is polluted,” says 85-year-old Seu João, father to 17 children.
One of his daughters, Maria José Pereira dos Santos, becomes emotional when recalling the days when she and her father would cross the rivers on horseback. Her family home lies at the foot of the Chapada das Veredas, a highland plateau sprawling across 15,000 hectares (37,000 acres). Before the land was privatized, local farmers raised cattle and grew manioc here. This plateau was once covered in vegetation native to the Cerrado biome, the world’s most biodiverse savanna and a vital source of water. Its Veredas ecosystem, a type of wetland specific to the Cerrado, is essential for replenishing groundwater and regulating water flow during the dry season.
However, the plateau’s natural hydrological balance has been disrupted since at least 2013, when the first academic studies on eucalyptus’s environmental impacts here were conducted. More than 60% of the Chapada is now covered in eucalyptus plantations, which have gradually drained many of the region’s water sources, according to a 2022 study by researchers at the Federal University of Minas Gerais. “The Veredas were once rich in water,” says João Batista, a farmer from Veredinha, a village 30 minutes’ drive from Turmalina, the area’s largest town.
His property is surrounded by eucalyptus trees towering 20 meters (66 feet) high. Batista blames Aperam BioEnergia, the steelmaker’s plantation arm, which manages more than 100,000 hectares of eucalyptus plantations in the valley. “They destroyed the native vegetation to produce charcoal that only benefits the industry,” he says. “We are left with nothing.”
With a steel industry dating back to the 1920s, Brazil is the world’s ninth biggest steelmaker. Lacking the coking coal typically used in producing steel, the country has increasingly relied on charcoal, and has consequently become the world’s top producer of charcoal from wood. In 2021, about 11% of Brazil’s steel production used charcoal, touted as “cleaner” than using coal. Eucalyptus, a fast-growing, high-biomass tree, is the main source of charcoal here, with companies sourcing it from their own plantations.
But eucalyptus monocultures have been shown to harm ecosystems where they’re not native.
“At first glance, plantations may look like lush green forests, but ecologically speaking, they are deserts,” says Daniel Montesinos, a researcher at Australia’s James Cook University, who has studied the impacts of eucalyptus on biodiversity.
Cultivating eucalyptus, a water-intensive crop, severely disrupts an area’s water balance, decreasing groundwater recharging, which can affect water supplies for human consumption and agriculture. Eucalyptus trees have a higher evapotranspiration rate than native Cerrado plants, reducing the soil’s water retention, says Vico Mendes Pereira Lima, a soil scientist and professor at the Federal Institute of Northern Minas Gerais. He estimates eucalyptus plantations on the Chapada plateau have lowered groundwater levels by 4.5 m (14.8 ft) since the mid-1970s, consuming about 31 billion liters (8.2 billion gallons) of water per year.
“Rainfall hasn’t changed in 70 years, showing that eucalyptus, not droughts, drives the water crisis in rural communities,” Pereira Lima says.
Communities scramble for water
Approximately 2,000 people live in the rural communities surrounding the plateau. A dozen individuals interviewed for this story say Aperam has created few jobs, especially since the mechanization of forestry operations reduced the need for manual labor. Research published by the Federal University of Minas Gerais indicates that the municipality of Turmalina has seen little financial benefit from Aperam’s forest operations, while bearing the costs to offset the damage from water shortages. In 2018, tax revenue from Aperam’s eucalyptus plantations brought in just 5.85 reais per hectare (about $1.60 per hectare, or 65 cents per acre at the exchange rate that the time), highlighting the low fiscal return from monoculture forestry.
By contrast, when the same land was preserved as native vegetation, it generated more than twice as much income through the ICMS Ecológico, a state-level tax incentive that rewards municipalities for environmental conservation. That same year, Turmalina spent approximately 350,940 Brazilian reais (about $96,056) on supplying water to rural communities. Turmalina’s mayor, Zilmar da Farmácia, declined to comment on the issue.
As water scarcity worsens, many residents have been forced to migrate in search of work. Those who remain have little choice but to abandon their traditional lifestyle and agricultural practices.
With help from the Vicente Nica Center for Alternative Agriculture (CAV by its Portuguese acronym), an NGO that supports more than 2,500 farming families in the Alto Jequitinhonha Valley, some farmers have been drilling wells, building dams and installing water tanks for rainwater collection.
For more than a decade, CAV has been urging Aperam to address the impacts of its eucalyptus plantations, but the company has denied any liability. Aperam, which plans a 24% expansion of its plantations by 2030, says all of its forests are FSC-certified, implying it meets a series of standards, including maintaining watercourses, conserving biodiversity, and upholding the rights, land ownership and management of local and Indigenous communities.
Valmir Macedo, general coordinator at CAV, says he couldn’t believe it when, in 2020, French consultancy Bureau Veritas (BV), an independent assessor for the FSC, approved the renewal of Aperam’s certification. “While violating a fundamental human right like access to water, Aperam continues to receive a certificate of sustainable forest management: it is the emblem of greenwashing,” Macedo says.
Soon after, CAV and 40 other groups from Brazil, Italy and Switzerland filed a complaint with the FSC, demanding the suspension of certification for Aperam’s Brazilian operations. The report from Bureau Veritas flagged a “minor non-conformity” regarding the local water supply and only recommended a more detailed study by Aperam.
In 2024, the FSC commissioned German auditor Assurance Services International (ASI) to evaluate BV’s assessment of Aperam. ASI’s field audits in Minas Gerais found that Aperam’s environmental impact evaluations were vague and insufficient, and that they failed to address water depletion issues and adequately assess the needs of rural communities.
ASI also flagged BV’s failure to gauge the seriousness of CAV’s allegations and whether these claims constituted a “minor or major non-conformity” — an issue that, if left unresolved within the time frame for the assessment, should have led to a suspension of Aperam’s FSC certification. In August 2024, Aperam replaced BV with another FSC-accredited body, the Brazil-based Institute of Forest and Agricultural Management and Certification (Imaflora). Aperam has until May to provide more detailed documentation of its environmental impact.
Aperam didn’t provide specific responses to questions for this story. Instead, it listed several of its social and environmental programs, including Água Nossa de Cada Dia (Our Daily Water), an initiative that “promotes the sustainable use of water for the benefit of approximately 3,000 people in 11 communities across the valley.” However, CAV says Aperam has failed to provide concrete evidence of these programs’ effectiveness. Farmers from Gentio, Campo Alegre, Poço de Água and Veredinha, communities affected by the eucalyptus plantations, told Mongabay they never received Aperam’s support to preserve local water.
Despite environmental damage, eucalyptus brings in carbon credits
Aperam’s forestry activities in the Alto Jequitinhonha Valley also include the conversion of eucalyptus waste into biochar, a carbon-rich material that yields a form of charcoal. But instead of being burned as fuel, biochar can be used for soil carbon sequestration, to improve soil quality and water retention.
Biochar’s capacity to stabilize carbon in the soil and reduce CO2 soil emissions allows Aperam to sell carbon credits on the voluntary carbon market. According to the Puro.earth platform for trading carbon credits, Aperam BioEnergia has capacity to generate about 40,000 metric tons of carbon removal per year.
In early 2024, Aperam BioEnergia sold 15,000 metric tons of carbon removal via Patch, another dedicated platform. “Our entry into the carbon removal market is a great example that, for Aperam, developing the solutions that the economy of the future requires goes beyond producing electrical and stainless steel with a low carbon footprint,” Aperam CEO Tim di Maulo said at the time.
Some of Aperam BioEnergia’s carbon credits have been purchased by major financial institutions, including the Nasdaq exchange, Swedish bank SEB and Swiss private bank Pictet, to offset thousands of metric tons of CO₂ emissions generated by their operations.
While carbon credit schemes have improved their accounting methodologies and standards, they remain criticized for frequently failing to preserve ecosystems and social well-being in the communities where they’re produced.
However, new legislative frameworks could change that. The COP29 climate summit in Baku, Azerbaijan, in 2024 introduced the Paris Agreement Credit Mechanism (PACM) to enforce strict methodologies for carbon credit projects, requiring adherence to sustainability goals, including social protections for Indigenous communities. In Europe, a new regulation on permanent carbon removal, approved in February 2025, requires projects to protect biodiversity and rural communities, not just absorb CO₂. However, this regulation applies only to projects within the European Union, so Aperam’s plantations in Brazil fall outside those rules.
“Setting adequate standards for carbon credits and projects, with the double aim of assuring both climate action and clear co-benefits for local populations and biodiversity, remains a challenging task”, says Jacopo Bencini, research associate at the European University Institute’s Carbon Markets Hub. “But in recent years, initiatives from the carbon credit market did set the bar higher compared to previous experiences and new methodological standards such as the one adopted at the UN level for the PACM are going in the right direction”, he said.
‘In defense of life’
After six years of urging the FSC to revoke Aperam’s sustainable forestry certification, CAV says it hopes the voices of Alto Jequitinhonha Valley’s rural communities will finally be heard. “The partnership network of Chapada das Veredas is committed to upholding the human right to water and access to natural resources essential for the well-being of local communities, we stand firm in the defense of life,” says the CAV’s Macedo.
With climate change driving intensifying the dry season, the region’s water crisis is set to deepen, posing a threat not just to locals, but to Aperam itself, as more than half of South America risks becoming too arid for eucalyptus cultivation.
Back in Poço de Água, Seu João’s daughter, Maria José, often needs to buy water in plastic containers for drinking and washing during the dry season. She says she refuses to leave the place where she was born. “We don’t want money from Aperam,” she says. “We want the land and water we once had.”
This article was supported by Journalismfund Europe.
Citations:
Gonçalves, R. V., Cardoso, J. C., Oliveira, P. E., Raymundo, D., & De Oliveira, D. C. (2022). The role of topography, climate, soil and the surrounding matrix in the distribution of Veredas wetlands in central Brazil. Wetlands Ecology and Management, 30(6), 1261-1279. doi:10.1007/s11273-022-09895-z
da Silva, E. P. F., Galizoni, F. M., Lima, V. M. P., Ribeiro, Á. E. M., de Paula, É. J. S., Santos, A. O., & Santos, A. F. R. (2022). Metamorfose da chapada: Monocultura de eucalipto e tomadas de terras e águas no Alto Jequitinhonha, Minas Gerais. Revista Campo-Território, 17(44), 63-89. doi:10.14393/RCT164404
Martins, F. B., Benassi, R. B., Torres, R. R., & De Brito Neto, F. A. (2022). Impacts of 1.5°C and 2°C global warming on eucalyptus plantations in South America. Science of The Total Environment, 825, 153820. doi:10.1016/j.scitotenv.2022.153820
Banner image: Eucalyptus plantation just a few kilometers from the town of Turmalina, in Minas Gerais. Image by Tamás Bodolay/Repórter Brasil.
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