RESPONSIBLE COMMODITIES FACILITY INSTRUMENT ANALYSIS

The Responsible Commodities Facility (RCF) is a proposed debt fund designed to halt agricultural expansion into the Brazilian Cerrado by providing low-interest loans to farmers who produce soy and corn on degraded lands. The facility aims to raise US$ 300 million through green bonds to provide crop financing and land restoration loans, utilizing blockchain for traceability and a dedicated exchange to link producers with international sustainable buyers. Over 10 years, the RCF targets the restoration of 1.2 million hectares of land and the avoidance of 55 million tonnes of carbon emissions.

• The RCF aims to prevent further deforestation in the Brazilian Cerrado by offering crop financing and land restoration loans at better-than-market terms to producers using already cleared and degraded lands.
• The facility's financial structure relies on issuing investment grade-rated green bonds, with an initial US$ 300 million note planned for early 2019. This bond is divided into three tranches: a senior tranche (A) for commercial investors, a subordinated tranche (B) for concessional finance providers, and a first-loss tranche (C) provided by a partnering trading company.
• To ensure environmental integrity, the RCF implements strict eligibility criteria: land must have been cleared before 2008 and restored for cultivation after 2010, and producers must comply with the Brazilian Forest Code and the Cadastro Ambiental Rural (CAR).
• The RCF integrates blockchain technology and satellite-based monitoring to ensure the traceability of commodities and the continuous assessment of producer compliance.
• Over a 10-year period, the RCF is projected to provide US$ 3 billion in loans to 600 farms, resulting in over US$ 20 billion worth of deforestation-free soy and corn and the restoration of 1.2 million hectares of land.
• The instrument is estimated to avoid 55.4 million tonnes of CO2 emissions over 10 years, derived from avoided conversion of Cerrado forests (27.2 million tonnes), increased soil carbon storage in restored land (17.1 million tonnes), and carbon sequestration in new legal reserves (11 million tonnes).

APA

Climate Policy Initiative (2018). RESPONSIBLE COMMODITIES FACILITY INSTRUMENT ANALYSIS. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/10/Responsible-Commodities-Facility_Instrument-Analysis.pdf

Chicago

Climate Policy Initiative. RESPONSIBLE COMMODITIES FACILITY INSTRUMENT ANALYSIS. 2018. https://www.climatepolicyinitiative.org/wp-content/uploads/2018/10/Responsible-Commodities-Facility_Instrument-Analysis.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=RESPONSIBLE COMMODITIES FACILITY INSTRUMENT ANALYSIS |date=September 2018 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2018/10/Responsible-Commodities-Facility_Instrument-Analysis.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2018responsible, author = {{Climate Policy Initiative}}, title = {{RESPONSIBLE COMMODITIES FACILITY INSTRUMENT ANALYSIS}}, institution = {Climate Policy Initiative}, year = {2018}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2018/10/Responsible-Commodities-Facility_Instrument-Analysis.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }