INTERVIEW: Vale taps into ethanol, waste processing to tackle CO2 emissions

Vale -- having achieved around three-quarters of its Scope 1 and 2 and over half of its Scope 3 emissions reduction targets as of mid-2026 -- expects to reach its next milestones in carbon reduction by introducing ethanol-fueled bulk carriers, commercializing low-carbon products in its portfolio, and tailings reprocessing, among other solutions, the company's vice president for sustainability, Grazielle Parenti, told Platts in a recent interview.

Like other iron ore miners, Vale has a substantial downstream carbon footprint and is under pressure to decarbonize amid changing trade regulations. The fact that iron ore is intrinsically linked to carbon-intensive steelmaking means Vale and its peers are having to overhaul how they extract, process and supply their products.

Vale has committed to reducing Scope 1 and 2 emissions -- direct and indirect emissions from its operations -- by 33% by 2030 against a 2017 baseline and has now achieved 76% of that reduction, with the company's electricity supply, which comes under Scope 2, already quite green.

"Most of our operations are in Brazil, and Brazil is a land of renewables; 100% of our electricity there is renewable, from a mix of hydropower, solar and wind sources," Parenti said.

Electrification not a cure-all

However, electrification is not the answer for everything, she said. The company uses a lot of diesel and other bunker fuels for trucks, trains and ships, and their cumulative emissions -- classified as Scope 3 -- account for most of the group's CO2 emissions.

Vale does have a target for Scope 3, which aside from transport and logistics encompasses indirect value-chain emissions, including from downstream processing of sold products by Vale's customers. The company aims to reduce Scope 3 by 15% by 2035 and has already cut it by 8.2% against the 2017 baseline, meaning the 2035 aim is 54.5% achieved.

The low double-digit target should not be seen as a lack of ambition, however. "This is a lot, given that 98% of all our emissions are in Scope 3," Parenti said.

To hit that 15% goal, Vale has been trialing biodiesel- and ethanol-fueled trucks and locomotives, installing rotor sails to harness wind energy on its chartered fleet, and, in April 2026, agreed a deal with China's Shandong Shipping Corp. for two 325,000-dwt dry bulk carriers with a multi-fuel design to be delivered by 2029. When powered by ethanol, their voyages will have emissions up to 90% lower than vessels running on heavy fuel oil.

"The first ethanol-powered ships will set off in 2029. We will see how they perform before we move on, but this is the direction. We don't see things going back," Parenti said of Vale's transition to biofuels. "This will be a long-term commitment. And when a company like ours -- such a large offtaker [of consumables] -- commits, it's a game-changer," she said.

CO2 intensity down 4.2%

Vale's Scope 1 and 2 emissions intensity was brought down to 18.4 kg of CO2 equivalent per ton of iron ore in 2024-25, from 19.2 kgCO2e in 2023, driven by greater use of renewable electricity and operational efficiency gains.

To further advance Scope 1, 2 and 3 reductions, Vale continues to modify its products, for instance by making iron briquettes using in-house technology that eliminates the highly carbon-intensive sintering process. This is based on an agglomeration method that does not require the very high temperatures needed for sintering and pelletizing.

Testing at its customers' sites shows the briquettes generate 10% less CO2 in blast furnaces than traditional ore-based metallics, thereby directly driving down Vale's Scope 3 footprint, according to Parenti.

The growing demand for greater optionality in iron metallic feedstocks is linked to a trend the company is seeing globally.

"We still have many blast furnaces, and we provide products for them as well, but electric arc furnaces are taking over. We see it in Europe, in Japan, in South Korea, and in Latin America. Steelmaking will need more scrap, but also high-quality primary raw materials, which will be essential for optimal blending," said Parenti.

Waste rich in Fe

Despite its long mining history, the company is not facing significant depletion issues: it operates over 40 sites and says it could sustain high-quality output, currently grading 62.5% Fe on average across all its products.

"Vale sits in the largest and best endowment of minerals in Brazil. There is still so much room to grow," Parenti said, adding that organic growth is also being enhanced by the company's tailings reprocessing.

Vale's flagship Carajas operations contain ore of around 65%-67% Fe, a high level that means even their waste mounds -- especially those from decades ago when beneficiation technologies were less advanced -- contain some decent Fe residue.

"As a company that is 84 years old, we have massive tailings, and want by 2030, 10% of our iron ore production to come from input reclaimed from tailings, and other circular initiatives," Parenti said. That share currently is 8%, or 26 million mt.

Vale began reprocessing old waste two to three years ago using its existing beneficiation facilities, including some that had been idled or were underutilized. Now, the company is also collaborating with international organizations to define what counts as circular production and which traceability systems can demonstrate best that certain supply batches come from reclaimed tailings rather than newly mined ore.

The company's mining operations are also set to expand, boosting iron ore output from 336 million in 2025 to 360 million mt in 2030 but also driving growth in non-ferrous metals.

The company's $12 billion New Carajas expansion project will, aside from iron ore, deliver more copper, boosting Vale's overall copper output.

"Today, it's 300,000 mt of copper. We want to double it in the next few years," said Parenti, adding that demand for the red metal "is increasing astonishingly."