Climate and Competitiveness Border Carbon Adjustments in Action 2025

Steel and iron –Latest clean production technologies –Lean manufacturing integration –Voluntary industry standards leadership –Joint supplier sustainability projectsAll BASICs Yes Textiles –Water/chemical efficiency –Circular textile recycling design –Sustainable cotton/fibre sourcing –Brand partnerships for sustainable fashion –Consumer educationBrazil, India, South AfricaNo Thermal power –Clean energy technology R&D –Smart energy management –Technology licensing revenue –ESG investor engagement –Renewable energy developer partnershipsAll BASICs No Transport –Fleet electrification –Alternative fuel development –Smart logistics optimization –Charging infrastructure partnerships –Transport policy collaboration –Supply chain decarbonizationBrazil, India, South AfricaNo The implementation of market mechanisms underscores the need for robust GHG accounting systems capable of meeting regulatory requirements. As part of our journey, Vale has invested in data science and integration, supporting importers and engaging suppliers to ensure compliance. Looking ahead, global alignment and recognition for renewable electricity consumption and regional decarbonization strategies, such as using biofuels and biomaterials, will be critical to building resilient, sustainable trade systems. Further policies are also needed to integrate carbon capture, both geo- and nature-based, to carbon border adjustments. Grazielle Parenti, Executive Vice-President of Sustainability, Vale Localization strategies for BCAs Exporters can make two strategic responses to reduce their obligations under BCAs and national carbon pricing policies through localizing their production and value chains. Localizing production By situating manufacturing bases in countries that have implemented BCA regimes, companies can: –Reduce transportation GHG emissions from imports and, where the necessary resources are available, via local supply chains –Access cleaner energy sources where available –Enhance stakeholder and policy alignment by localizing value chains and supporting domestic job creationLocalizing sourcing and procurement Manufacturing and processing companies are highly dependent on supply chains to reduce GHG emissions. Transport emissions are easiest to reduce by localizing supply chains, and further reductions can be achieved by implementing supply chain carbon profiling, using digital platforms and designing selection processes that reward low-carbon suppliers. Localized sourcing can also improve traceability and data integrity, and can make emissions tracking, auditing and certification easier. Climate and Competitiveness: Border Carbon Adjustments in Action 31