We recognize that climate change is one of the most pressing global challenges of our time, and we understand the importance of taking proactive and responsible action in response.

The Climate Action pillar reflects Bracell’s commitment to mitigating climate change effects and to strengthening the resilience of our operations. The process to build our climate strategy has involved managing GHG emissions, setting 2030 targets for emission reductions and CO2 removals, through our forestry operations, and implementing initiatives around climate adaptation (read more at Climate Action).

Bracell at COP30

During COP30, held in November 2025 in Belém, Pará, Bracell’s Vice President of Sustainability, Márcio Nappo, took part in three official panels in the Blue Zone, organized by national and international institutions, with discussions on the bioeconomy, decarbonization and nature-positive strategies:

“Benefits of Forest-Based Products” – CNA and Ibá

Organized by the Brazilian Confederation of Agriculture and Livestock (CNA) in partnership with the Brazilian Tree Industry (Ibá), this panel highlighted the potential of specialty dissolving pulp and its applications in the pharmaceutical, cosmetics and food industries as well as in viscose production.

“The Role of Removals from Nature-Based Solutions in Decarbonizing the Economy” – CNI

Hosted by the National Industry Confederation (CNI), the discussion addressed the role of forests in carbon capture and storage and Bracell’s commitment to remove 25 million tCO₂e from the atmosphere by 2030.

“Cultivating a Nature-Positive Future: Metrics and Momentum in Agriculture and Forestry” – NPI

Organized by the Nature Positive Initiative (NPI), this panel explored new metrics to measure the state of nature and Bracell’s engagement as a pilot organization in Brazil to test these metrics.

Climate Governance

Bracell’s governance framework for the climate transition and adaptation is structured at three levels to ensure that climate matters are fully integrated into business strategy.

At the strategic level, the Sustainability Steering Committee oversees climate targets and carbon reduction and adaptation projects, sets priorities and ensures alignment with corporate strategy, risk management and long-term value creation.

At the tactical level, the Sustainability function connects strategy to execution by integrating climate data, tracking climate targets and coordinating mitigation and resilience initiatives.

At the operational level, Technical Working Groups implement climate guidelines and develop and track initiatives related to emissions, removals and energy.

Climate Commitment – 2030 Targets

CLIMATE ACTION

No	2030 Target	2020 Baseline	2030 Target	2025 Target	2025 Performance	2024 Desempenho	ODS
1	Reduce carbon emissions per tonne of product by 75% to reach 0.122 tCO₂e/ADT	0.482 tCO2e/adt	0.122 tCO2e/adt	0.141 tCO2e/adt	0.255 tCO2e/adt	0.208 tCO2e/adt	13, 14, 15
2	25 MtCO2e removed from the atmosphere between 2020 and 2030	8.3 MtCO2e	25 MtCO2e	13.9 MtCO2e	6MtCO2	4.30 MtCO2	13, 14, 15

As part of the Bracell 2030 roadmap, we have set two commitments tied to the material topic Climate Change. Our climate goals were developed based on an analysis of the risks and impacts—both positive and negative—Bracell’s operations have on climate change. Our operations generate greenhouse gas (GHG) emissions but also remove CO₂ from the atmosphere by growing planted eucalyptus forests and preserving native vegetation under Bracell management.

By 2030, we have committed to reducing our carbon emissions per metric ton of product by 75% from a 2020 baseline. This means reaching 0.122 tCO₂e/adt. In addition, we will remove 25 MtCO₂e from the atmosphere over the course of a decade—from 2020 to 2030.

For 2025, our interim targets were to close the year with 0.141 tCO₂e/adt and 13.9 MtCO₂e in removals. Measured results are detailed below:

Target 1: reduce carbon emissions per metric ton of product by 75%, targeting 0.122 tCO₂e/adt.

From 2020 to 2025, we reduced carbon emissions per metric ton of product by 47%, reaching 0,255 tCO₂e/adt.

Although we achieved a 47% reduction in emissions intensity over this period, several factors contributed to not meeting the target set for 2025. The reduction in emissions was negatively impacted mainly by increased mobile combustion in our operations, as well as higher consumption of natural gas and fuel oil in industrial processes.

On the other hand, we recorded significant progress in 2025. The occurrence of fires in our forest areas was substantially reduced, resulting in an 84% decrease in emissions associated with these events.

Additionally, at our Bahia industrial site, one of the pulp production lines was modernized with the implementation of a new cooking line. This technology, which became operational in early October 2025, reduced steam demand in the process, contributing to a 3% reduction in the plant’s total natural gas consumption.

We continue to implement initiatives to mitigate climate-related impacts and advance toward the decarbonization of our operations. Investments in testing electric trucks for pulp transportation, as well as in the generation and use of renewable energy, are examples further detailed in the Energy Efficiency chapter.

Target 2: 25 MtCO₂e removed from the atmosphere between 2020 and 2030

*Bracell São Paulo, Bracell Bahia, and MS Florestal operations.

From 2020 to 2025, we removed 6 MtCO₂e. This figure reflects the carbon balance of our operations—i.e. the difference between total removals and emissions (including anthropogenic and biogenic LULUCF—Land Use, Land-Use Change, and Forestry—emissions).

The result represents progress compared to the cumulative total recorded up to 2025, reflecting the continued carbon removals associated with our forest operations.

However, climate-related factors contributed to not meeting the target set for 2025. Performance was mainly impacted by adverse weather conditions observed in recent years, characterized by higher temperatures and reduced rainfall, which led to water deficits and directly affected forest productivity. As the growth of eucalyptus forests is directly linked to the capacity to remove CO₂ from the atmosphere, these conditions constrained the expected removal potential over the period.

Bracell has an action plan to mitigate its climate-related impacts and increase the resilience of its operations in the face of climate change. Key initiatives include: monitoring carbon and water fluxes in planted eucalyptus forests; investments in forest research and development (R&D); integrated management of climate-related risks and impacts; and the development of climate zoning studies. Further details can be found in the chapters Monitoring Carbon and Water Fluxes in Planted Eucalyptus Forests and Climate Zoning Study.

Climate Action

Below are some of the key initiatives in Bracell’s Climate Action agenda, spanning mitigation, energy efficiency, technological innovation, and building internal capabilities.

Self-sufficient generation capacity – we have on-site renewable, clean generation capacity for the full electricity requirement of our two flexible lines in Lençóis Paulista, São Paulo. We also produce a surplus of 150-180 MW which we feed back into the grid, enough to supply power to a city of 3 million people or 750,000 homes.

Solar power plant – our Tissue facility in Lençóis Paulista (SP) operates the largest solar array in the paper sector in Latin America, with 10,836 panels covering approximately 50,000 square meters. The plant has an installed capacity of 7.21 MW, equivalent to about 20% of the facility’s total electricity requirement.

Fossil fuel replacement with renewable energy in the lime kiln – in the two flexible lines at the Lençóis Paulista (SP) site, we produce synthesis gas (Syngas) from eucalyptus biomass in our biomass gasifiers to power the lime kilns.

Replacement of fuel oil with natural gas in the lime kiln – using advanced engineering technologies and solutions, we have launched a project to replace 1B oil (a petroleum-derived fuel oil) with natural gas in the lime kiln of the site’s older production line in Lençóis Paulista (SP).

Electric forklifts and trucks – our operations are deploying electric forklifts running on renewable electricity produced on-site in Lençóis Paulista. We are also piloting the use of electric trucks for shipping between the plant and the road-rail terminal in Pederneiras (SP), fueled by renewable energy produced at our pulp mill.

Research on carbon and water flux in eucalyptus plantations – as part of the Eucflux-IPEF Cooperative Program, we conduct research on carbon and water flux in eucalyptus plantations in Brazil. This research is enhancing our understanding of these processes in a Bracell-managed eucalyptus plantation in Itatinga, São Paulo, where we have set up a flux tower equipped with advanced monitoring technology.

Investment in carbon and water flux towers – in line with our Bracell 2030 commitments, we are installing five additional carbon and water flux towers in both eucalyptus plantations and native forests across São Paulo, Mato Grosso do Sul, and Bahia. In 2025, we began installing a new flux tower in an area of native vegetation at our Lontra Private Natural Heritage Reserve in Bahia. It will add to the existing tower in the state, operating in a planted eucalyptus forest area, and another in operation in São Paulo in a native forest area.

GHG Inventory and GHG Protocol – our GHG inventory—covering Scopes 1, 2, and 3—and our tCO2e removals are externally audited and assured. We publish a complete GHG emissions inventory in the Brazilian GHG Protocol Program’s Public Emissions Registry platform.

Carbon footprint – we conduct product carbon footprint assessments using internationally recognized lifecycle assessment methodologies, including ISO 14044, ISO 14067 and the GHG Protocol Product Standard, supporting our customers in their decarbonization strategies and building competitive advantage through greater climate transparency.

New cooking plant – in 2025, operations began at the new cooking plant in Camaçari, Bahia. The new system has been developed under Renovar, a program to upgrade industrial equipment and processes as part of our overarching commitment to sustainability and innovation. The plant’s throughput has increased by 35%, boosting productivity while delivering power, steam, natural gas, and water savings.

GHG inventory

As a key part of our climate agenda, Bracell annually prepares a corporate inventory of greenhouse gas (GHG) emissions and removals. In 2025, our inventory covered the entire pulp value chain, including emissions from mill operations in São Paulo and Bahia, forestry operations in these two states and in Mato Grosso do Sul, as well as related logistics activities (read more about our forest operations under GRI 2-6 About Bracell).

The data in our GHG Inventory is publicly disclosed and externally audited by an independent third party, with an assurance letter published in our Sustainability Report and in the Disclosures of (see more under GRI 305 – Emissions).

Bracell’s Greenhouse Gas Inventories cover Scopes 1, 2 and 3 and are prepared in accordance with guidance provided in the latest edition of ISO 14064, the GHG Protocol, and the quantification methodologies published by the Intergovernmental Panel on Climate Change (IPCC). Since 2022, Bracell has published its GHG Inventory data in the Public Emissions Registry.

As a member of the Brazilian GHG Protocol Program (PBGHG), Bracell publishes GHG Inventory data in the Public Emissions Registry, having been again awarded the Program’s Gold badge in 2025.

The PBGHG recognizes participating organizations for voluntary accountability to stakeholders who are increasingly concerned with corporate social and environmental responsibility. The Gold badge is awarded to organizations that demonstrate high levels of accuracy and transparency in their greenhouse gas inventory submissions to the Brazilian GHG Protocol Program’s Public Emissions Register (RPE).

Carbon balance

Bracell’s planted eucalyptus forests and native forest areas play a crucial role in capturing CO₂ from the atmosphere, absorbing and storing carbon throughout the trees’ growth cycle. This natural process helps partially offset our greenhouse gas (GHG) emissions.

In 2025, our carbon balance showed that our removals exceeded our emissions. See details in the table below.

We removed -3.4 tCO₂e* from the atmosphere in 2025, and our net carbon balance was -1,544,310 tCO₂e

Monitoring Carbon and Water Flux in Eucalyptus Plantations

As part of our commitments within the Bracell 2030 roadmap, we have invested in building five flux towers to monitor water and carbon flux in our operations.

In 2024, we installed two towers—one in a native forest area in São Paulo and another in a eucalyptus area in Bahia. In 2025, we began installing a new flux tower in an area of native vegetation at our Lontra Private Natural Heritage Reserve in Bahia. Two additional towers will be installed in Mato Grosso do Sul, one in a eucalyptus plantation and one in a native forest area, bringing the total to five towers. Measured data is managed and analyzed by our Forestry Research and Development team.

These towers collect data on carbon and water fluxes from trees, as well as various environmental variables. The system includes sensors to measure short- and long-wave radiation, photosynthetically active radiation (PAR), precipitation, CO2 concentration at different tower heights, as well as air temperature and humidity and soil temperature, moisture and heat. These data provide critical inputs to improve our strategies in response to climate change.

Two more towers will be installed in Mato Grosso do Sul, one in each type of forested area. The data is managed and analyzed by our Forestry Research and Development team.

Eucflux-IPEF Cooperative Program

We are a member of the Eucflux-IPEF Cooperative Program, which studies carbon and water flux in eucalyptus plantations in Brazil. This research is enhancing our understanding of these processes in a Bracell-managed eucalyptus plantation in Itatinga, São Paulo, where we have set up a flux tower equipped with advanced monitoring technology.

Eucflux is led by the Institute for Forest Research and Studies (IPEF) and the French Agricultural Research Centre for International Development (CIRAD), with participation from academic institutions such as the Federal University of Lavras (UFLA), São Paulo State University (UNESP), and the University of São Paulo (ESALQ/USP).

Climate Impacts and Risks

Bracell systematically identifies and classifies climate-related risks and opportunities. These are categorized as physical or regulatory, and their financial implications for the business are determined. We also detail the methods used to manage each risk.

Our Corporate Risk Management and Business Continuity Policy provides guidelines on identifying, assessing, addressing, and monitoring corporate risks through a structured Enterprise Risk Management (ERM) process. This process follows international standards such as ISO 31000, BSI 31100, and COSO ERM, covering operational, social, environmental, governance, technological, strategic, political, and financial risks.

Climate-related risks with financial impacts are categorized and classified in accordance with Bracell’s Risk Classification Matrix (see GRI 201-2).

Impacts	Description	Details
Positive Actual Impacts	We remove carbon from the atmosphere through our eucalyptus plantations, native forests, and soil.	In 2025, our planted forests removed 1.8 MtCO₂e, while our native forests removed 1.6MtCO₂e, totaling 3.4 MtCO₂e in removals.
Actual negative impacts	Greenhouse gas (GHG) emissions from our operations.	Scope 1 and 2 greenhouse gas emissions, whose impacts are limited in scale and moderate in intensity. We have effective internal control mechanisms in place to manage and reduce these emissions (see more in our GHG inventory under GRI 305 – Emissions).
	Greenhouse gas (GHG) emissions from our operations.	Scope 3 greenhouse gas emissions, whose impacts are broad in scale and high in intensity. We have internal control mechanisms in place and recognize the importance of strengthening our strategy to mitigate Scope 3 GHG emissions. We actively participate in committees and working groups on this topic (see more in our GHG inventory under GRI 305 – Emissions).

Climate adaptation

Forestry R&D, risk management and climate change impacts

We invest in classical genetic improvement, silviculture, forest management, extension services, and technology transfer to ensure a sustainable supply of high-quality pulpwood over the medium and long term—and ultimately business continuity and product excellence.

The Forest R&D team’s key research endpoints are to improve the Mean Annual Increment of Wood (MAI) and Mean Annual Increment of Pulp (MACI) sustainably. Our research pipeline currently includes more than 400 projects, all aligned with the team’s mission and tailored to the specific characteristics of each region where we operate.

MAI and IMACEL are key forest performance indicators that measure the annual average growth in pulpwood volume per hectare and annual average pulp production per hectare, respectively, informing decisions on forest management, genetic improvement and business sustainability.

Classical genetic improvement

Bracell does not use genetically modified organisms (GMOs) and develops its eucalyptus clones through classical genetic improvement. This process involves the generation, evaluation and selection of clones improved in successive cycles. The focus of genetic improvement is also on developing techniques aimed at improving cloning efficiency, guaranteeing high-quality pulpwood that is more sustainable in the long term.

In 2024, our Forestry R&D team recommended the commercial planting of three clonal composites—one in São Paulo, one in Bahia and one in Mato Grosso do Sul. These are unique cultivars formed by a blend of clones, which reduces vulnerability and offers greater protection against pests, diseases, and adverse weather events. These clonal composites have been commercially planted since 2024.

In addition to these three clonal composites, newly developed in-house clones are regularly recommended for operations in São Paulo, Bahia and Mato Grosso do Sul.

Forestry and forest management

At Bracell, we seek to continually improve our forest management processes and use best-practice soil conservation, preparation and fertilization methods. Biological control of pests, diseases and weeds is also a priority, ensuring healthy, productive forests in the long term (see GRI 2-6 About Bracell).

Each year, Bracell has increased the production of natural enemies for use in planting regions. In 2024, 95 million natural enemies were produced and, in 2025, production reached 1.3 million in São Paulo, 127.2 million in Bahia and 30.1 million in Mato Grosso do Sul. Biological control reduces the need for chemical inputs, helping lower greenhouse gas emissions, particularly nitrous oxide (N₂O) associated with the application of nitrogen-based inputs in forest management.

Forestry extension and technology transfer

As part of our research efforts, we provide specialized technical assistance and promote technology transfer in our forestry operations, advancing best practices and continuous process improvement.

Climate zoning studies

We carry out ongoing climate zoning studies to monitor edaphoclimatic—or soil and climate—conditions in the regions where we operate in Brazil, with a focus on water availability, which is essential to understanding direct water impact on eucalyptus forest development.

These studies allow us to identify the areas best suited for commercial eucalyptus cultivation, optimizing land use and enhancing the environmental sustainability of our operations. Based on these findings, technical recommendations are tailored to the specific characteristics of each location, ranging from the selection of the most suitable genetic material to forestry practices such as planting spacing, fertilization, soil preparation and pest and disease management.

Climate zoning also informs the optimal timing for these activities, aligning field operations with environmental conditions to maximize plantation performance and efficiency.

In 2025, we applied lessons learned in 2024 by adjusting planting timing for more susceptible clones to the second half of the year, avoiding early exposure to higher temperatures and humidity in the first half of the year, which resulted in lower pest and disease incidence and higher yield.

In a collaboration with the University of North Carolina, we developed a clonal allocation tool. This tool enables more precise identification of the best-performing clones for each planting area.

An in-house biometrician, specialized in applying quantitative methods to biological and ecological data analysis, conducted a three-month study in the US and developed the tool, which optimizes planting efficiency and generated an average 4% gain in Mean Annual Increment (MAI) simply by placing the right clone in the right location.

MAI is a key performance indicator for forestry. It measures the average annual growth in pulpwood volume per hectare and informs decisions surrounding forestry management, genetic improvement and long-term business sustainability.

Energy Management

Our pulp mills in Lençóis Paulista (SP) are energy self-sufficient. At our mills, recovery boilers produce steam that is fed to turbine-generator sets to generate electricity. We only source electricity from the national grid during equipment maintenance shutdowns. In these cases, we source electricity from the national grid, which derives approximately 85% of its electricity from renewable sources—mainly hydro, wind, and solar.

Electricity is also purchased for forestry and port operations, nurseries and offices.

At our storage yards in Lençóis Paulista (SP), we use electric forklifts to reduce fossil fuel consumption in these operations.

In 2025, we continued testing electric trucks along the shipping route between the mill and the Pederneiras (SP) rail-road terminal. This initiative is a first for this type of heavy-duty operation. During the year, one electric truck traveled 17,000 km in a trial, avoiding 16 tCO₂e in emissions.

We also purchased a new truck with expanded payload capacity of 52 metric tons (t), compared to the previous 28t to 30t vehicles. The truck is powered by renewable energy generated at the Lençóis Paulista (SP) mill. This the second phase of testing in an initiative combining sustainability with improved logistics and cost efficiency.

Renewable energy

The Lençóis Paulista (SP) pulp mills have been developed to be fossil fuel-free, with on-site capacity to generate clean and renewable electricity for operations and a surplus that is fed into the national grid.

The Lençóis Paulista (SP) site has a 440 kV substation with an installed capacity of 409 MW, enough to supply the full electricity requirement of the mill and a surplus of approximately 150 to 180 MW that is sold to the national grid, enough to supply clean renewable electricity to around 750,000 homes or approximately 3 million people.

At our Bahia plant, we operate a recovery boiler that generates renewable energy by burning black liquor, a byproduct of the wood pulping process.

During the year, we generated 57 million GJ of renewable electricity from eucalyptus biomass, black liqour and solar array. We sold 2 milion GJ of eucalyptus biomass-generated electricity to the Brazilian free energy market (see more in GRI 302). Our surplus electricity sold in the free market is certified under the I-REC standard, which verifies the renewable attributes of the electricity produced.

In 2025, our logistics operations at the Port of Santos (São Paulo State), which are ISO 14001-certified, further increased our use of renewable energy. Automation upgrades reached full operating capacity: two gantry cranes and four overhead cranes now handle pulp transported by rail from the Pederneiras road-rail terminal (São Paulo State). This system enables faster loading of breakbulk vessels and supports remote operations. As a result, we eliminated the use of trucks in port operations. We also reduced the number of forklifts from 18 to 5, two of which are electric and the others powered by LPG.

Sustainability Attributes at Bracell Papéis

Bracell’s paper mills in the Northeast and Southeast are equipped with technologies that support the use of renewable energy in our operations and help mitigate greenhouse gas emissions.

Pulp Transportation for Tissue Production

The Bracell Papéis mill in Lençóis Paulista (SP) is located on the same site as Bracell’s flexible lines, where the kraft pulp used in Tissue manufacture is produced. This logistics integration allows the pulp to be transported via pipeline, eliminating the need for drying and road transport, thereby saving GHG emissions and optimizing processes.

Automated Vertical Warehouse and Energy Efficiency

The products manufactured at the Lençóis Paulista (SP) site are stored in an automated vertical warehouse, which uses robot-operated elevators to optimize goods handling. This system ensures greater energy efficiency in the process. Automation reduces the need for lighting and air-conditioning, resulting in energy savings in warehousing operations.

The system also enables better logistics control, allowing for optimized storage and fast product handling, which reduces waste and increases productivity. It also improves safety and efficiency. Automation minimizes human intervention, making the process safer, more precise and more sustainable.

Solar Power

The Bracell Papéis facility in Lençóis Paulista (SP) has a 50,000 m² solar panel array—the largest in Latin America—covering the entire roof of the industrial plant, generating 7.21 MW of renewable, fossil fuel–free energy. This generation capacity meets 20% of the site’s total electricity requirement.

Biomass boiler

At the Bracell Papéis plant in Feira de Santana (BA), we commissioned a new biomass boiler, which came online in December 2024. The new unit, which is safer and more efficient, was installed as part of our Inovar program—representing the largest investment in the facility’s history.