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Aidenvironment research on Brazil and Indonesian fire seasons informs on risks of fires inside supply chains

Widespread fires in Brazilian tropical forests were at the center of media attention in 2019. NGOs, politicians and celebrities called for action to stop deforestation for soy and livestock, the main cause of the fires. Indonesia also endured extensive blazes in 2019, often linked to deforestation for palm oil.

Forests in Brazil and Indonesia capture carbon, retaining vast amounts of carbon dioxide and regulating global temperatures. Fires release that stored CO2 back to the atmosphere, contributing to further climate change.

Aidenvironment’s study was carried out in our capacity as part of Chain Reaction Research (CRR). The report describes the main drivers of the fires in Brazil and Indonesia, the actors involved, the political context, and the risks for investors. Full report here.

Satellite image of fires on August 10, 2019 (dia do fogo) in Floresta Nacional do Jamanxim, Para, Brazil
Agricultural interests fueled fires in 2019

In 2019, extreme fire events took place around the world. Wildfires burned in Indonesia, Australia, the Amazon and California. Forest fires are at times part of nature. Every year, Brazil and Indonesia experience a fire season between the months of July and October. However, climate change and commodity-driven deforestation are making them more frequent and more intense. Driven by agricultural expansion and production of mainly cattle and soy, Brazil experienced a heavy fire season in 2019. The same agricultural interests, at a smaller scale, fueled fires in Indonesia, where increased palm oil demand for biofuels exacerbated the widespread fires in the country.

Key Findings
  • NASA data shows the magnitude of last year’s fires in Indonesia and Brazil. From July to October 2019, there were 981,282 fire alerts in Brazil. In the same period, there were 329,546 fire alerts in Indonesia. In both countries, most fires occurred on the frontier between areas already used for farming and areas with native vegetation.
  • The area burned in Brazil was 3.7 percent (31,838,900 ha) of the country’s landmass. In Indonesia, 0.84 percent (1,649,258 ha) of its total landmass was burned. Part of the fires is related to deforestation for agricultural land expansion, while other fires are the result of natural causes and maintenance of agricultural land.
  • Due to high demand for agricultural commodities, Brazilian farmers and Indonesian smallholders ignite most of the fires. In Indonesia, ‘ready-toplant’ land, which has already been slashed and burned, has higher economic value compared to cleared land that is not ready yet for planting. In Brazil, the business model of investors, real estate firms and agribusinesses aims to increase land value by acquiring land, clearing it from vegetation and transforming it into farmland.
  • In Brazil, companies such as JBS, Cargill and Bunge are exposed to a risk of fires in their supply chains. A large number of fires happened in areas close to these companies’ facilities.
  • Palm oil traders run a risk of fires in their palm oil supply chains in Indonesia. Traders and refiners in Indonesia are likely to have direct or indirect suppliers with fires inside their concession areas, even though the former have NDPE policies.

For more information, please contact Tim Steinweg and Marco Garcia

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