US$37.5M earned from carbon credits already for 2024 – Jagdeo

 …more credits to be certified soon

Guyana has already earned US$37.5 million for the sale of high-quality carbon credits for 2024, from the multi-year agreement with United States energy-major Hess Corporation, which carries a total value of US$750 million.
Vice President Dr Bharrat Jagdeo made this disclosure during his presentation at the ongoing Guyana Energy Conference and Supply Chain Expo at the Marriott Hotel on Tuesday.

Last year, the country received US$150 million from this deal, where 33.7 million credits are being sold to Hess Corp, amounting to 30 per cent of the carbon sink contained in Guyana’s vast forest cover.
“We have received $37.5 million already for this year and we are receiving another US$50 million in a few months’ time. Of the US$150 million (last year), US$22.5 million went to the indigenous communities – 15 percent of it. They have now implemented over 811 projects in 242 indigenous villages,” Jagdeo disclosed.
The remainder of this money is being used to fund adaptation measures such as mobile pumps and large canals to move water from the back lands to the Atlantic Ocean among other initiatives.
The vice president spoke on Guyana’s robust forest carbon credentials and in fact, it is the only country in the world with a jurisdictional scale certification.
He updated that the Architecture for REDD+ Transactions (ART), which is in charge of certifying forest carbon credits so that they can be sold on the international market, will soon certify the 2021 to 2025 credits.
It is anticipated that as soon as this certification is granted, Guyana can get into the market.
“We’re already carbon negative because our forest is a huge sink. We will remain carbon negative in even when we’re producing 1.5 million barrels of oil per day. That is an important thing…We sold one-third of the credit from the 2016 to 2020 period. We’re now, hopefully weeks away from certifying the 2021 to 2025 credits. They can’t be sold until they’re certified and they are being certified by the ART secretariat.”
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 a 10-year period, 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 People’s Progressive Party/Civic (PPP/C) Government has said that having carbon credits from 2016 to 2020 certified, was intended to ensure Guyana does not lose out on retroactive payments for the period when A Partnership for National Unity/Alliance For Change (APNU/AFC) were in power and failed to capitalise on the potential of Guyana’s forest carbon.
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.
It is estimated that if Guyana is able to secure the same value as it did with Hess, the country could raise some US$2.5 billion. (G12)