Vice President Bharrat Jagdeo has said that while the government is currently reviewing proposals to market Guyana’s carbon credits, those would only go on sale after the completion of the Low Carbon Development Strategy (LCDS) 2030.
Jagdeo made the statement during a recent press conference.
Guyana alone stores about 19.5 billion tonnes of carbon in its forests which is estimated to be valued at US$40 billion to US$54 billion annually.
As part of the revised LCDS 2030, launched by President Irfaan Ali in October last year, the government is targeting over US$300 million in carbon credits earnings per annum.
The LCDS 2030 sets out an updated vision for how the government intends to drive the transformation of the country, highlighting the finances that can be accrued for its under 1% deforestation. The LCDS 30 document outlines how Guyana can earn payments. “Earning payments as Guyana moves towards a market mechanism will involve: (i) integrating with the market standard; (ii) generating credits in accordance with that standard; (iii) marketing Guyana’s credits to potential buyers,” it states.
Appendices 1 and 2 of the document describe credit generation and the methodology for calculating those credits, but says “in sum, Guyana will receive credits for (i) any reductions in deforestation against the previous five-year average (starting with 2016-2020 as the reference period); (ii) restoration of deforested or degraded forest; (iii) the long-term storage of carbon in Guyana’s standing forest, providing that Guyana’s deforestation rate does not increase significantly above historic averages.”
To generate the credits, “Guyana will submit an annual report, which will then be independently verified and certified to ART-TREES. At the same time, Guyana has submitted a Safeguards Information Report (SOI) highlighting continued adherence to agreed social and environmental safeguards. Reporting on progress/ adherence to safeguards on an annual basis will be a part of ART Monitoring Reports.
Once the credits are certified, the document said that the ART-TREES Secretariat will record them on the publicly accessible ART registry, from which point they will be available for purchase by governments or companies with high emissions which they want to offset.
And when the credits are available for sale, these can be sold on the market, either directly by Guyana or through brokers.
At his press conference, Jagdeo said that the government is currently in its consultative phase with LCDS 2030. He said that they had initially envisaged a short period of consultation, seeking the input of indigenous communities and other stakeholders.
“What we envisaged would have been a short process of consultation is now taking a much longer time, but we wanted it to be a thorough process and that is why we have gone across the country. [We have gone to] every region taking that message there and the message is very clear. We have had the [LCDS 2030] documents translated into I think it’s nine Amerindian languages [and circulated there. We’ve had engagements with the University [of Guyana], with different interest groups locally and abroad,” Jagdeo explained.
He said that the LCDS Steering Committee has agreed to document all of the concerns and suggestions put forward during the consultations and incorporate them into the final document. He added that they are hoping to finalise the LCDS 2030 document in the coming weeks after which it would be tabled in the National Assembly.
“So that is where we are [with LCDS 2030 at this time]. Now not every comment we received we can accommodate [but we have] committed to giving explanations why we can’t include some suggestions versus the inclusion of others. So that is where we are now,” he added.
Sale of credits
Carbon credits are referred to as “hall passes” greenhouse gas emissions. Forests serve as carbon sinks and with approximately 85% of its landmass covered in forests coupled with a low deforestation rate, Guyana is looking to further market its carbon absorption capabilities through the ART-TREES [Architecture for The REDD+ Environmental Excellence Standard] registry.
Guyana is hoping to complete ART-TREES certification no later than August 2022 after which it would have credits available on the market. Once the credits are certified, the ART-TREES Secretariat will record them on the publicly accessible ART registry, from which point they will be available for purchase by governments or companies with high emissions which they want to offset.
Now, with the sale of carbon credits, Guyana is aiming to earn significant sums from its carbon storage potential. By purchasing carbon credits, companies and governments with high CO2 emission rates are granted permission to generate one tonne of CO2 emissions per credit.
Under the ART-TREES programme, Guyana is expected to have between 8 and 10 million carbon credits on the market annually but in this first instance, there will be approximately 35 million credits up for sale by September 2022. This is so because of an accumulation of credits from 2016 to date.
Earlier in the year, government was seeking proposals to market the carbon credits. The deadline for submission of those proposals was March 14.
“On October 26, 2021, the Architecture for REDD+ Transactions (ART) Secretariat, approved TREES (The REDD+ Environmental Excellence Standard) Documents Submitted by Guyana. Verification and Validation processes are currently being conducted. TREES is the standard under which Guyana’s carbon credits are being registered and certified for transaction in a carbon market. Since October 2021, these documents have been posted publicly on the ART Registry and include a TREES Registration Document and TREES Monitoring Report for the 2016-2020 Crediting Period and a TREES Registration Document for the 2021-2025 Crediting Period,” the call for proposal document read.
Jagdeo told the press conference that the ART-TREES certification adds value to Guyana’s carbon credits.
“Our product is very strong because as I said before, we have one of the few countries in the world that has had a robust MRV [measurement, reporting and verification] system for 10 years tracking any change in the forest. So our forest carbon is high quality…we went out to tender and we received several proposals. So those proposals are being assessed,” he related.
However, Jagdeo said that the sale of the credits depends on the completion of the LCDS 2030 document. He said that President Ali made a commitment not to conclude any arrangement to market the credits until the document goes through the process.
Under the 2009 LCDS agreement with Norway, Guyana used to be paid US$5 per credit (equivalent to a tonne of carbon) but under ART-TREES it can receive a minimum of US$10 per credit. The earnings from Norway were used for various developmental projects as well as developing indigenous communities.
Now with the impending ART-TREES arrangement, indigenous communities are hoping to better benefit from the services of the forests since they are seen as its caretakers.
Additionally, observers have been questioning the impact of the oil and gas sector on Guyana’s environmental standing since the world is looking at phasing out the usage of fossil fuels. However, the
government has largely ignored those questions and has continued to develop the sector at unprecedented speed.
However, at a recent engagement Senior Director for Climate and REDD+ (Reducing Emissions from Deforestation and forest Degradation) in the Ministry of Natural Resources Pradeepa Bholanath had said that Guyana’s expanding oil and gas sector will not affect the country’s environmental credentials, effectively allowing it to maintain its carbon sink status.
Bholanath, who also heads the Environmental Assessment Board (EAB), had made the statement on April 27 during a seminar on the prospects of carbon capture and storage for Guyana held by the University of Guyana’s Faculty of Earth and Environmental Sciences’ Department of Environmental Studies.
“What we have assessed over the last two years in close work with the GGGI [Global Green Growth Institute], working with the office here in Guyana, we’ve been able to analyse the carbon emissions for each of the aspects of the oil and gas industry. Particularly looking at the natural gas project that will come on stream and also looking at each FPSO [floating, production, storage, offloading vessel] and the emissions associated at every stage of its operation. What that has summarized for us is that we look at fugitive emissions, we look at the emissions that would be involved in the commissioning and startup and we also look at the emissions that will be part of a natural gas operation.
“Having said all of that, what all of the data summarized is—is that with four FPSOs by 2027 or with that even doubling in the years to come, that 154 million tonnes of Co2 that the forest is sequestering annually far eclipse the level of emissions that would come from a single FPSO which is estimated to be about 2 million tonnes of Co2. So you can imagine, therefore, that as we keep an eye on the various aspects of emissions per FPSO, and for new projects that may come on board like the natural gas project, Guyana will always be a net sink. There is hardly a reality where one can contemplate that 154 million tonnes of Co2 is being taken off by the operation of FPSOs,” she had reasoned.
She added that even with that information, the government still has to ensure that all the environmental standards are maintained and that low carbon development takes place within the oil and gas industry.
Guyana became an oil producing country in December of 2019 and since then there have been growing international concerns over the impact of its oil and gas industry.
