US investment firm EQX Biome has proposed generating carbon credits rather than exploiting oil in the Democratic Republic of Congo (DRC) to protect the rainforest. Kinshasa auctioned off 27 oil blocks last July, saying that exploiting fossil fuels was an economic imperative for the DRC, where two-thirds of the population live below the poverty line.
Preserve the rainforest
The Congo Basin forest is the second largest in the world after the Amazon. However, some of the blocks up for auction encroach on protected areas in this forest, which has led environmental organizations to express alarm at the potentially disastrous effects of the oil industry. The risks are particularly great for the peatlands in the central part of the basin, which store about 30 billion tons of carbon, almost the equivalent of one year’s worth of global emissions.
EQX Biome proposes to invest $400 million in conservation projects to protect endangered forest areas in the region. The carbon credits generated will be used to sell the amount of carbon dioxide stored in the safeguarded forest areas to offset greenhouse gas emissions. For the CEO of the company, this proposal is more interesting economically than oil exploitation, because it could create thousands of jobs and generate significant tax revenues.
Challenge to carbon credits
Proponents of carbon credits say they are effective in combating deforestation, but skeptics warn that forests do not store carbon permanently and that companies are using the credits to cover their increased emissions. A recent scandal over alleged inefficiencies in projects that have been stamped by Verra, the world’s leading carbon credit verification body, has also cast a shadow over the sector. The loopholes in environmental regulations in the DRC, one of the most corrupt countries in the world, also cast doubt on the purpose of the credits.
Auction in progress
Auctions for the oil blocks will run from April to October. The Minister of Hydrocarbons, Didier Budimbu, said he was open to offers from carbon credit groups. Other companies such as Oneshot.earth also expressed interest in the tender, but never received a response from the government to their request for further information.
According to the Boston Consulting Group, the voluntary carbon market, which allows companies to purchase credits from certified conservation projects, has reached a value of approximately $2 billion by 2021. This value is expected to reach between $10 billion and $40 billion by 2030. However, the Congolese Ministry of Hydrocarbons did not respond to requests from AFP.
