Environment
Hess to buy US$750m in Guyana’s carbon credits over 10 years, 15% of monies to go to Indigenous communities:
Hess Corporation, one of the partners in Guyana’s lucrative offshore oil block, on Friday inked an agreement for the purchase of US$750m of this country’s carbon credits over 10 years and 15% of the monies will go to Indigenous communities. The Hess purchase followed an announcement on Thursday by the Architecture for REDD+ Transactions (ART) of the issuance of over 33 million carbon credits to this country. Hess will purchase the first 30 per cent of that amount for a minimum of US$750 million over a ten-year period. However, while the agreement period between the two partners is from 2022 to 2032, government says that it was able to negotiate a ‘legacy credit’ amount of 12.5 million credits at US$15 per tonne, thus receiving a US$187 million sum for the period 2016 to 2020. In two weeks, US$75 million of that amount will be deposited into the account and the remainder paid within 18 months.
The Architecture for REDD+ Transactions (ART) last Thursday issued Guyana over 33 million carbon credits. The credits, which were accumulated during the five-year 2016 to 2020 period, are certified based on ART’s standard for measurement, monitoring, reporting and verification, The REDD+ Environmental Excellence Standard, known as TREES. In a statement announcing the decision, the Arlington, Virginia, US-based ART said the issuance of the credits marks a milestone as it is the first time a country has been issued carbon credits specifically designed for the voluntary and compliance carbon markets for successfully preventing forest loss and degradation – a process known as jurisdictional REDD+. However, critics have already raised concerns over such agreements and what they mean for Indigenous communities, which may not directly benefit from the control and sale of carbon credits from the forest within the boundaries of their titled lands. ART said the approval of 33.47 million TREES credits was granted to Guyana following completion of an independent validation and verification process and approval by the ART Board of Directors. Guyana’s TREES credits are also the first market-ready credits issued to a jurisdiction classified as “High Forest, Low Deforestation” (HFLD), the statement said, explaining that this has high forest cover and low historical rates of deforestation. Carbon markets have historically focused predominantly on areas that have already experienced high rates of deforestation. This is now starting to change with the first TREES credits issued to Guyana.