Experts question benefits of Colombian forestation project led by top oil trader

At last month’s COP29 climate conference in Baku, Azerbaijan, oil-trading giant Trafigura announced that it was injecting $100 million into the company’s Brújula Verde tree-planting project in Colombia. Working in partnership with green investment platform GenZero, the initiative aims to ultimately plant 36 million mixed-species trees across 30,000 hectares (74,000 acres) in the country’s eastern plains. The company has vowed to restore biodiversity in the region within three decades while producing and selling carbon credits.

But environmental experts question whether the project can deliver the promised ecological and climate benefits. A crucial sticking point is that the area it plans to turn into a forest was never a forest to begin with.

Headquartered in Singapore, Trafigura is among the world’s largest traders of commodities such as metals, oil and natural gas. In recent years, the company, whose 2023 revenue exceeded $240 billion, has faced a series of corruption scandals and declining oil prices, resulting in a 73% drop in net profits in the first quarter of 2024. Increasingly, it has turned to the voluntary carbon market, championing forest carbon projects in Colombia, Pakistan and Southern Africa.

In Colombia, the company has already mapped out two dozen tree farms spanning 617 hectares (1,525 acres) in the department of Vichada. The area, bordering El Tuparro National Park in the south, consists of wet and dry savanna with sparse tree cover near local rivers. While Trafigura has labeled these lands on its website as “degraded” and in need of reforestation, some experts argue they’re valuable ecosystems that should be preserved.

“Degraded lands according to whom?” says Sergio Estrada-Villegas, a tropical community ecologist at the University of the Rosary in the capital, Bogotá. “Many think these lands were ancient forests that burned down, but that is false. These savannas have been this way for thousands of years. Their diversity lies in the small herbaceous plants and the grasses. It would be better for the environment if they conserved what’s already there.”

Estrada-Villegas, who has worked in the region for more than a decade, also challenges the company’s claims that the land has been damaged by decades of extensive cattle ranching and fires. “There are very few cattle in the region, and fires are a natural part of the savanna’s ecology as herbs and grasses need [them] to germinate and grow,” he tells Mongabay. “These explanations don’t justify such an extensive intervention.”

One of the most contentious aspects of the project is the decision to plant exotic trees. According to InverBosques, the local forestry firm managing the project on the ground, 90% of the 10,000 hectares (25,000 acres) planted so far have been seeded with eucalyptus, which aren’t native to the region. These species are highly controversial: studies have shown that eucalyptus trees deplete soil nutrients, create weaker seed banks, and support fewer bird species.

“It’s very difficult for other species to thrive within a eucalyptus monoculture,” says Diego Cardona, a forest engineer with the World Rainforest Movement, who analyzes afforestation projects in the region. The biochemicals that various eucalyptus species produce “can inhibit other species’ growth,” he tells Mongabay. “In this way, the natural ecosystem is not being conserved or recovered.”

InverBosques’ general manager, Natalia Quevedo, defends the decision to plant eucalyptus, telling Mongabay by phone that it’s primarily an economic motive. “Eucalyptus allows for an accelerated capture of carbon credits that will allow us to finance this project and eventually establish native species,” she says. “Native species grow much more slowly. It would be very difficult to make them efficient in economic and financial terms. It’s just not feasible.”

The plan is to increase the ratio of native trees in the project’s second phase, scheduled for completion in 2027. Part of the challenge has been establishing the region’s first native tree farms, given that the land is historically savanna. “We hope to increase the number of native species as we continue this learning curve,” Quevedo says. “We want to plant at least 50% native trees ultimately, but it may be more, depending on our results.”

For now, eucalyptus trees are changing the local landscape as other initiatives follow InverBosques’ blueprint. According to the recent World Rainforest Movement report “Tree plantations for the carbon market,” Colombia has 74 active afforestation and reforestation projects for carbon capture, a number exceeded only by China and India. Exotic species of pine, eucalyptus and Chinese fir (Cunninghamia lanceolata) dominate these new plantations.

Carbon sequestration

Climate experts say they’re skeptical about the climate benefits of the Brújula Verde project. Trafigura estimates the new forests will start sequestering around 400,000 metric tons of greenhouse gases annually starting this year. That’s what the company emits every one and a half months through its direct operations, according to data from a recent annual report.

At the same time, the company is encouraging oil and gas trading in Colombia, where emissions are on the rise, according to data from the World Resources Institute. Over the past decade, the firm has injected more than $1 billion through its subsidiary Impala to improve oil transportation infrastructure along the Magdalena River, moving crude from production sites to major export hubs like the port of Cartagena on the Caribbean coast.

“That is exactly what offset projects are about: companies planting trees somewhere else to continue expanding their business,” says Joanna Cabello, senior climate justice researcher at the Netherlands-based Centre for Research on Multinational Corporations (SOMO). “It is all about having good PR for these extractive industries to rebrand themselves as green. They want to be portrayed as bringing the solution instead of the problem. But it is implausible to escape the mounting evidence showing how offsets fail to accomplish its climate promises.”

In recent years, Trafigura has pledged to dramatically reduce its operational greenhouse gas emissions by more than 50% by 2032 compared to 2020. However, the company told Mongabay that credits generated from the Brújula Verde project will be sold and will not be for Trafigura’s own use.

Nevertheless, the company stands to gain financially. A spokesperson said several buyers are already lined up to purchase carbon credits from the project starting in 2025, despite the credits still not being registered with the Gold Standard voluntary carbon registry. Trafigura is betting on carbon credits becoming valuable investment-grade assets after years of declining value.

Local communities

“While the project’s ecological and climate benefits are questionable, the impact on local communities is a lot more nuanced,” says a local social scientist studying the Brújula Verde initiative, speaking on condition of anonymity. “With all the downsides, this project is supporting [sparsely] populated rural communities largely forgotten by the rest of the country and the state. It’s a very complicated relationship of dependency.”

InverBosques, the company managing Brújula Verde among other smaller plantations, is one of the region’s largest employers, reportedly creating 350 formal jobs in forest management and 450 indirect jobs in the food and transportation sectors. The company has also carried out a series of social programs, including building ancestral houses for local tribes and setting up a Starlink satellite internet connection at a local school.

In the next few years, the company also plans to establish usufruct property deals with more than 70 landowners in Vichada department for the right to grow forests on their lands, renewable every 10 years. Additionally, the company has promised to create a community fund with a percentage of the profits made from carbon credit sales. It hasn’t disclosed details of the amounts.

In video testimony recorded by InverBosques, community leader Alba Lucia Tirado Jimenez said the impact on her rural community of La Esmeralda has been primarily positive. The small village has around 80 families who work predominantly for the company. “Before this project, most people had to travel to neighboring cities to work,” she says. ”It’s much better now that’s not the case anymore.”

Several community members approached directly by Mongabay agree that the local economy is improving as a result of the project. But some also describe growing fear over environmental impacts.

“We can already see these activities are changing the landscape around us,” says Juan Correa, an agricultural business manager and resident of Puerto Carreño, a municipality of 10,000 people neighboring the plantations. “I’m especially concerned with the plantations near wet savannas that require a lot of water. We have to monitor this very closely so that we’re not suffering from not having this precious liquid in the future.”

Citation:

Lemessa, D., Mewded, B., Legesse, A., Atinfau, H., Alemu, S., Maryo, M., & Tilahun, H. (2022). Do Eucalyptus plantation forests support biodiversity conservation? Forest Ecology and Management, 523, 120492. doi:10.1016/j.foreco.2022.120492

Banner image: A recently planted forest of the project shows mostly eucalyptus trees. Image courtesy of Trafigura.

FEEDBACK: Use this form to send a message to the author of this post. If you want to post a public comment, you can do that at the bottom of the page.