(Yicai Global) Nov. 15 -- Brazilian mining giant Vale and China Baowu Steel Group, the world’s largest steelmaker, will team up to come up with more environmentally friendly steel refining processes.

The pair have penned a memorandum of understanding to use biochar, charcoal that is produced by decomposition brought about by high temperatures and lack of oxygen, instead of fossil fuels in blast furnaces, the Rio de Janeiro-based company said in a statement posted on its website recently.

Vale intends to invest from CNY60 million to CNY70 million (up to USD10.9 million) in China Baowu’s pilot biochar plant project. The partnership could involve synergies. Brazil has huge potential in becoming a major supplier of biochar resources, including eucalyptus, sugarcane, and other kinds of organic residues, the company added.

The initiative contributes to the Brazilian firm's green goals. Vale aims to achieve carbon neutrality by 2050. Before that, it intends to cut its Scope 1 and Scope 2 emissions by 33 percent by 2030. Based on the Greenhouse Gas Protocol, Scope 1 involves direct emissions caused by the reporting firm while Scope 2 involves energy purchases. Moreover, Vale has committed to reducing its net Scope 3 emissions by 15 percent by 2035. Scope 3 refers to indirect polluting activities.

Vale has recently partnered with other Chinese firms to decrease its carbon footprint. During the China International Import Expo earlier this month, the mining company penned a MoU with China Metallurgical Group regarding low-carbon steel refining. Moreover, last month it agreed to collaborate with private steelmaker Shagang Group with the same theme.

China has a demand for green innovation. In September 2020, the government announced that the world's second-largest economy will aim for carbon neutrality by 2060 after having its carbon dioxide emissions peak before 2030.

Editor: Emmi Laine, Xiao Yi