Press Releases

IFC, V&M Do Brasil, and Toyota Tsusho Announce the Largest Ever CDM Transaction to Purchase Emission Reductions

Adriana Gomez
Phone:  (202) 458-5204

Fax:  (202) 974-4384


Ann Pasco        

Phone:  (202) 473-9167        

Fax:  (202) 974-4384        


IFC in Brazil

Vikram Widge or Natalie Halich
Phone:  (55-11) 9623-5679

Washington D.C./ Belo Horizonte, February 3, 2003—The International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, announced today the largest transaction to date under the Kyoto Protocol, Clean Development Mechanism. The IFC-Netherlands Carbon Facility (INCaF) will provide a conditional commitment to the Brazilian steel producer V&M do Brasil (V&M) to purchase five million tonnes of greenhouse gas (GHG) emission reductions.

The total contract value is expected to be €15 million. In addition, Toyota Tsusho Corporation will sign a contract with V&M to purchase an additional volume of emission reductions that the project will generate. EcoSecurities Group Ltd., an international GHG advisory firm, advised V&M on both transactions.

During a visit to Brazil, Peter Woicke, head of IFC, will sign the Corporation’s intention to purchase these emission reductions over a ten year period on behalf of the Dutch government. “IFC is proud to be part of this landmark project. We believe that this significant transaction will demonstrate our commitment to developing and supporting market-based instruments to promote environmentally sustainable projects in emerging markets.” said Woicke. Senior executives from Toyota Tsusho Corporation, V&M do Brasil, the Brazilian Minister of Environment and other government officials will join the reception ceremony that will be hosted by the Governor of Minas Gerais on February 4 in Belo Horizonte.

The V&M project will supply sustainably-produced charcoal to avoid the use of coal for the industrial scale production of steel and will lead to the reduction of over 21 million tonnes of carbon dioxide equivalent emission reductions over the next 21 years, with over five million committed to IFC and Toyota.

“This project is one more step in our continuous commitment to environmental improvement. It gives us great satisfaction to have our efforts recognized,” said Dr Marco Antonio Castello Branco, CEO of V&M do Brasil. “V&M is the only producer of ‘carbon neutral’ industrial steel tubes in the world, branded as ‘Green Tubes’.”

Many Brazilian steel producers have converted from charcoal to coal-derived coke due to cost savings. However, V&M realized it could continue to use environmentally friendly charcoal by offsetting the additional cost with the revenue from emission reductions. The company will make investments of approximately $50 million in its forestry and kiln operations. INCaF is the anchor buyer of half the expected emissions reductions.

INCaF is an arrangement under which the IFC will purchase greenhouse gas (GHG) emission reductions worth  € 44 million for the benefit of the Government of the Netherlands under the “Clean Development Mechanism” (CDM) of the Kyoto Protocol. The Netherlands will use these emission reductions to help meet its commitments under the Kyoto Protocol. The funds will provide additional revenues to eligible projects in developing countries.

IFC is actively promoting the new and evolving market for greenhouse gas emission reductions. For developing countries, the purchases of carbon credits will encourage the transfer of cleaner technologies to reduce emissions at an effectively reduced cost, and for developed countries the purchases increase the range of options for complying with the Kyoto Protocol emission reduction requirements.

The Kyoto Protocol of the U.N. Framework Convention on Climate Change calls for industrialized countries to reduce their GHG emissions to levels below those generated in 1990 by the period 2008 – 2012. Emission reductions result from activities that avoid or reduce the production of carbon dioxide, methane or other greenhouse gases as compared to a ‘business as usual’ situation, or from ‘sequestering’ carbon emissions in biomass such as forests and soils. The market for GHG emission reductions is becoming established and is expected to grow significantly over the next few years.


IFC’s mission ( is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications. For more information on INCaF, please visit

V&M do Brasil is a subsidiary of Vallourec & Mannesmann Tubes (V&M Tubes), a joint venture between the German company Mannesmannröhren-Werke (45%) and the French company Vallourec (55%). Created in October 1999, the joint venture incorporated Mannesmann do Brasil, a Brazilian subsidiary of Mannesmann, a manufacturer of seamless steel tubes. The company has demonstrated great dedication in the pursuit of social and environmental excellence, and has secured a series of quality certificates as a recognition of that, such as Forest Stewardhip Council certification for its forests since 1999, ISO 14,000 and ISO 9000.

Toyota Tsusho Corporation is a member of Toyota Motor Group and is engaged in a wide range of businesses from trading, manufacturing and processing to retail and services throughout the world.  Toyota Tsusho Corporation aims to be an eco-friendly company, participating in CDM emissions reduction projects in the developing world.

EcoSecurities is recognized as the leading greenhouse gas advisory firm by the readers of "Environmental Finance" magazine.  With three dozen full time professionals and offices in the UK, US, Brazil, Netherlands, and Australia, EcoSecurities is the largest dedicated GHG advisory firm in the world, having developed CO2 emission reduction projects in over 70 countries, advised over 15 governments on their climate change policies, and structured and advised on many of the world's early carbon emission reduction transactions.