Indigenous communities to get US$23.2M in 2024 as earnings from carbon credit sales increase

– Pres Ali announces hike in indigenous share from 15% to 26.5%

In an effort to ensure that Indigenous communities continue to benefit generously from the lucrative US$750 million carbon credits deal with Hess Corporation, the government will be increasing the share going to these communities in 2024 by over 11 per cent.

When the Government signed the deal with Hess Corporation, it was with the understanding that 15 per cent of all revenue would go to the indigenous communities. But with Guyana set to earn US$87.5 million this year, a reduction from the US$150 million it earned in 2023, it could have meant less money for indigenous communities.
The decision to increase the Indigenous community’s shares, which was announced by President Dr. Irfaan Ali during the opening of the National Toshao’s Conference on Monday at the Arthur Chung Conference Center (ACCC), Liliendaal, Greater Georgetown will see the respective communities benefitting from some US$23.2 million this year.
“This year, the total revenue received from carbon credit sales is US$87.5 million. Which is less than last year, so your 15 per cent should be less, because it’s US$87.5 million. But because we’re a government that cares and loves you, because we are a government that believes in giving more and not less, we have taken a decision to allocate 26.5 per cent of the earnings this year to you.”
“Although the agreement is 15 per cent, we do not want you to get less than what you had. We have increased the per cent of this year’s earnings to 26.5 per cent, ensuring you will get no less than what you got last year. You will get US$23.2 million or $4.84 billion in your villages,” President Ali said.
Based on the agreement, Hess will purchase a total of 750 million carbon credits. Of the US$150 million that was received last year, a total of 242 indigenous villages benefitted from the US$22.5 million. It therefore means that based on the government’s increase in the allocation percentage, Amerindians will get more than ever before this year.
“Under the revised LCDS, the government was able to secure the landmark purchase agreement with Hess. In 2023, US$150 million was received from Hess. And guess what? 15 per cent of this was allocated to 242 indigenous villages, a total of $4.7 billion (US$22.5 million),” the President said. “As a result of this investment, over 800 transformative projects are on the way in villages, which has resulted in growth and development, expansion, building of eco-lodges, tourist facilities, agriculture facilities, all of this is ongoing as a result of this investment… isn’t this trust? Isn’t this honour? Isn’t this dignity? Isn’t this recognition? Isn’t this belief? We did it because we believe in you. We recognize you. We honour you and… are committed to you.”
Hess Corporation, which is one of the partners operating in the Stabroek Block offshore Guyana, had agreed to buy 2.5 million credits per year for the period 2016 and 2032, valuing US$750 million.
The deal with Hess came on the heels of Guyana being the first country to receive a certification of more than 33 million carbon credits by the Architecture for REDD+ Transactions (ART) on December 1, 2022.
However, while the deal is for 10 years, that is, 2022 to 2032, the Government was able to negotiate, as part of the sale agreement, for the oil major to also purchase some 12.5 million carbon credits from the period 2016 to 2020 – referred to as “legacy credit”.
The country’s more than 18 million hectares of forests are estimated to store approximately 20 billion tonnes of carbon dioxide equivalent. The remaining 70 per cent of Guyana’s carbon credit will be put on the market for future sale agreements.
For the period 2021 to 2025 in the Hess deal, Guyana’s carbon credits would be sold for US$20 per tonne, thus earning the country another US$250 million; while another US$312 million is expected during the 2025-2030 period when the credits would be sold at US$25 per tonne.
A carbon credit is a tradable permit or certificate that allows the holder of the credit the right to emit a stated tonnage of carbon dioxide or an equivalent of another greenhouse gas. Countries and companies that exceed their permitted limits can purchase carbon credits from nations that have low emissions such as Guyana. (G-3)