Guyana to sell world’s 1st eligible carbon credits for use by airlines

…as ART approves 7.1 million TREES Carbon Credits

Guyana was on Wednesday issued with 7.1 million carbon credits dating back to 2021, marking the first-time carbon credits have been issued that can be used by airlines in an effort to meet their carbon emission targets for the 2024-2026 period.
The credits were issued by the Architecture for REDD+ Transactions (ART).
In a statement on Wednesday, it was announced that the credits were issued in recognition of Guyana’s successful efforts to reduce emissions from forest loss and degradation and maintain “one of the world’s most intact tropical forests”.
It marks the first time also that credits were issued which could be used by airlines toward their targets in the 2024-2026 phase of the International Civil Aviation Organisation’s global emission reduction programme – Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

ART Executive Director Mary Grady

“As a result of the authorisation and reporting to the [United Nations Framework Convention on Climate Change] UNFCCC, Guyana’s TREES credits are eligible for use by airlines to meet their compliance requirements in the first phase of CORSIA, which began on 1 January 2024. One hundred and twenty-six countries are voluntarily participating in CORSIA’s first phase, covering roughly 80 per cent of annual emissions from the aviation sector.”
“All participating airline operators with annual emissions over 10,000 tonnes of CO2 equivalent of greenhouse gas emissions must monitor and report their emissions, and then purchase carbon credits to offset any remaining emissions that exceed a percentage of their 2019 baseline emissions,” the statement explained.
The statement included comments from ART Executive Director Mary Grady, who noted that the secretariat was pleased to have worked with the People’s Progressive Party/Civic (PPP/C) Government, to reach this milestone.
“ART was established to unlock finance at scale for countries that successfully protect and restore their forests. We are very pleased to have worked with the Government of Guyana to help navigate the Paris Agreement and ICAO processes and achieve the issuance of the first post-2020 CORSIA eligible credits in the market,” Grady said.
Vice President Bharrat Jagdeo was also quoted in the statement assuring future buyers of these carbon credits that they were verified through a rigorous scientific process aimed at ensuring that all social and environmental safeguards were followed.

Vice President Bharrat Jagdeo

“Guyana’s CORSIA-eligible issuance marks the latest milestone in a journey that we began in 2009 when we set out a vision for forging a low-carbon economy in Guyana – while also building a model for the world on how tropical forests can be maintained. The ART-TREES standard, recognised by ICAO, provided the basis to build the bridge needed between forest countries’ work within the United Nations REDD+ framework and Private Sector buyers,” Jagdeo said.

Favourable market
Last year, it was revealed that Guyana has the potential to raise at least US$2.5 billion from its carbon credits over the next 10 years. According to Vice President Jagdeo, in a presentation at COP28, Guyana can raise US$2.5 billion over the next 10 years, by tapping into favourable market upsides.
“We’ve been able to get certified credits, and we’ve sold 30 per cent of those credits for US$750 million at a minimum. And I say at a minimum, because if there is an upside, the credits are traded in secondary markets or if there is any movement in a global market, then we would share 60 per cent of the upside of any increase in prices,” Jagdeo had said.
“So, if we were to sell the remaining 70 per cent of our credits at the same price at which we sold the credits that we recently sold – the 30 per cent, we will raise, over the next 10 years, at a minimum $2.5 billion to come into our country,” he had further explained.
The Vice President had further noted that when one considered the size of Guyana’s forests, “bigger than England and Scotland, but tiny compared to Ghana and the Congo and Brazil and many other countries in the world”, it, therefore, means a scale of financing needed to be raised to outcompete alternate use of the forests.
In 2022, Guyana signed a contract with Hess Corporation which saw the nation earning US$750 million for 30 per cent of its forest. In Guyana’s agreement, a rate of US$15 per tonne of carbon was secured and so far, 15 per cent ($4.7 billion) is allocated towards Amerindian development.
Already, more than 500 projects that run the gamut from tourism to agriculture are currently being pursued utilising the $4.7 billion, which was given to hundreds of Indigenous villages as part of their share of the US$150 million carbon credits sale.
In addition to its rich biodiversity and ecosystem, Guyana’s total forest cover of some 18.4 million hectares stores more than 19.5 gigatonnes of carbon and removes some 154 million tonnes of carbon dioxide from the atmosphere annually. (G3)