Peugeotís Carbon Sink in the Amazon Forest
Five-Year Progress Report and Outlook



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Peugeot's carbon sink

ON 30/12/05
OF 2005

You'll see it
after midday

5th November, 2005

Jean-Martin Folz, CEO of PSA Peugeot CitroŽn, and Pierre-Olivier DrŤge, Director of Franceís Office National des ForÍts (ONF), traveled to the S„o Nicolau tree farm in Brazil on 28th-29th October for a first milestone review of their experimental carbon sink project.

The Ä10 million project, fully financed by the Peugeot marque, is being carried out by ONF through subsidiary ONF International.

Peugeot had several objectives in developing the carbon sink. To start, it wanted to take a comprehensive approach to controlling greenhouse gases from human activity. In addition to devising technological innovations to reduce CO2 emissions at the source, the carmaker is committed to making a positive contribution to the initiatives that came out of the Kyoto Protocol, which emphasises the importance of fighting the man-made greenhouse effect. Thanks to its innovations, PSA Peugeot CitroŽn ranks among the worldís leading manufacturers with the best performance in terms of fuel consumption and CO2 emissions. As for its environmental contribution, Peugeotís carbon sink was developed to study the relationship between reforestation, sequestration of atmospheric carbon and climate regulation through the development of a living, large-scale prototype over a 40-year period.

The project also fits in with the commitments of the Groupís corporate citizenship responsabilities. The local population was involved in developing the sink from the very beginning to ensure that it was firmly anchored in the community. An environmental education programme was set up in local schools and more than 1,500 students have discovered the usefulness of a growing forest by visiting the S„o Nicolau tree farm. In addition, some 80,000 saplings have been distributed to owners of small local farms since 2000.

Lastly, the Group wanted to promote biodiversity. Instead of selecting a single, fast-growing species that would be particularly productive and easy to plant, the project managers chose numerous species to produce a forest with as many plant varieties as possible. This, in turn, should help diversify the areaís fauna by bringing back a number of forest animals.

The project began in 1999 with the acquisition of 24,710 acres of farmland in Mato Grosso State, in the Amazon. Since then, two million trees have been reintroduced. The first plantings are now nearly ten metres high and the latest are already two metres high. The young forest has definitely taken root.

So far, 4,942 acres have been reforested with more than 50 native species, making this a unique project, unlike any other type of reforestation to sequester carbon.

The project is managed by a steering committee with equal representation from Peugeot and ONF. In 2000, a Scientific Committee of 14 multidisciplinary scientistsómost of them Brazilianówas set up to promote the use of best practices and oversee research on Peugeotís carbon sink. The Committee met for the sixth time on 26th-27th October at the S„o Nicolau tree farm.

The five-year planting phase is completed. This marks a new start for the project, which will now focus on sustainable development and scientific research through a number of key objectives:
ē Serve as a laboratory for studying the relationship between reforestation, sequestration of atmospheric carbon and climate regulation.
ē Develop benchmark carbon-tracking methods for forest planting projects.
ē Develop a multidisciplinary research centre at the S„o Nicolau tree farm.
ē Make the site a model of sustainable planning by integrating the regionís traditional activities of livestock farming and forestry, which includes reforestation and management of the natural forest.
ē Firmly anchor the project in the local community, notably by pursuing and developing social and educational programmes.

The partners are also committed to publishing high-quality scientific papers to share their findings with a broad range of scientists and researchers in Brazil and the rest of the world.

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