Jean-Martin Folz, Chairman of Peugeot SA, and Frederic Saint-Geours, General Manager Peugeot, announced today that a carbon sink will be created in Mato Grosso state, in the tropical forest of Brazil.

Peugeot will invest FF65 million in the project, which is the first of its kind worldwide by its size and organisation. The programme puts into action the carbon sink concept discussed at the Kyoto Conference on climate change and represents a tangible contribution by industry to controlling global warming before the Buenos Aires conference in November.

The carbon sink concept entails re-creating ecosystems that can absorb large amounts of the excess carbon dioxide (CO₂) from the atmosphere. This concept complements measures to mitigate the greenhouse effect by reducing emissions at the source.

Peugeot has teamed up with two service providers to implement this major environmental project. The first, I'Office National des Forets (ONF), is recognised internationally for its technical expertise and is one of the leading managers of public forests in the world. The second, Pro-Natura International, is a Franco-Brazilian non governmental organisation based in Paris, with experience in protecting tropical forests and promoting forest management systems in more than 25 countries.

The carbon sink will be created in Juniena, Mato Grosso state. It will cover 12,000 hectares (nearly twice the area of Paris) and have a carbon storage capacity of 50,000 metric tons per year, which corresponds to 183,000 metric tons CO₂/ year equivalent. ONF has provided a 40-year guarantee to Peugeot.

A system of internal and external assessment through independent audits is planned to ensure that the agreed targets are met.

Special care will be taken to integrate the project into the region's socio-economic environment, as this is a key success factor. The carbon sink will not be created from scratch but will include three components: 5,000 hectares of deforested farm land that will be fully replanted, 7,000 hectares of old and second-growth forest and managed forest lands.

The partners will plant 10,000,000 trees, mainly in the first three years. This is the first large-scale forestation programme in the world designed to create a carbon sink.

The project is part of Peugeot's comprehensive environmental policy, which also includes measures to reduce emissions with electric vehicles, LPG-powered automobiles, the HDI diesel engine and rapeseed derivative. It represents a determined and pragmatic application of the Kyoto protocol's approach to reducing global warming.