Soy and the Cerrado - the RCF in context

Growing demand for soy globally is resulting in a continuous expansion of the area under cultivation in Brazil. This expansion has been identified as a major driver of deforestation, resulting in substantial destruction of natural habitats, loss of biodiversity and greenhouse gas emissions. The Amazon Soy Moratorium has significantly reduced deforestation in the Amazon, but this has resulted in leakage of deforestation and conversion activities to a species rich tropical savanna known as the Cerrado. More than 50% of the native vegetation in the Cerrado has now been cleared and over the last decade in the Matopiba region, 0.5–0.8 Mha of soy has been planted on recently converted land each year.?

Demand-side calls to action such as the 2017 Cerrado Manifesto have raised the profile of the Cerrado amongst food retailers, food manufacturers and food service companies that have soy embedded in their products, and more recent initiatives such as the Innovative Finance for the Amazon, Cerrado and Chaco (IFACC), Forest Positive Coalition of the Consumer Goods Forum and the UK and French Soy Manifestos, all share the objective of driving deforestation – and conversion-free (DCF) soy production in the region. Alongside this, in December 2022, the EU reached an agreement on a new law to prevent companies from placing commodities linked with deforestation and forest degradation onto the EU market, or exporting them from the EU, known as the EU Deforestation Regulation (EUDR). While the regulation initially only includes forests, thereby excluding much of the Cerrado, it is widely expected that ‘other forested land’ will be included in the first update, and that this will bring the Cerrado under the regulation.?

Other recent initiatives focus on reducing the carbon emissions of agricultural production. The Science Based Targets Initiative mobilises the private sector to take urgent climate action by setting targets to reduce their carbon emissions. This includes a target for Scope 3 emissions, that is, emissions that a company is indirectly responsible for, up and down its value chain. For companies with soy embedded in their products, their Scope 3 emissions include those from land use change, crop production, transport and processing. Soy produced in the Cerrado biome has an average carbon footprint of 1.00 t t?1 (CO2 equivalent per tonnes of soy equivalent) with around half the emissions coming from land use change. Soy produced specifically in the Matopiba states (Maranh?o, Tocantins, Piauí and Bahia) has an average carbon footprint of 2.32 t t -1, with over two-thirds of this due to land use change emissions. When food sector companies come to include these emission factors in their Scope 3 calculations, the source of the soy becomes very significant.?

While there is growing demand for land to expand agricultural production, it is widely recognised that the expansion of agricultural production can happen without further clearing of native vegetation in the Cerrado.?

In addition to the market signals and demand preferences for sustainability, there is a crucial requirement to create incentives to engage farmers in the production of DCF commodities. This is the rationale of the Responsible Commodities Facility (RCF).