Carbon credits represent one of the tools countries can leverage to advance the development of the energy sector.
Countries to the likes of Guinea-Conakry, rich in forestry and actively developing several renewable energy projects, are well positioned to utilize carbon credits to stimulate the development of untapped energy resources while correspondingly fighting climate change. Carbon credits are gaining increasing attention in Africa where several green projects are underway.
These projects are issued marketable credits by governments or companies, opening opportunities for project investment. Carbon credits are already extensively used, and some estimates suggest that the amount of equivalent CO2 tons (one credit = one ton) could potentially increase tenfold by 2030, reaching over 2 billion tons.
Some African countries, endowed with vast forested areas like Gabon (covering 89% of its territory) and Mozambique (covering 78% of its territory), are already capitalizing on the potential of carbon credits. In 2021, Mozambique became the first country to receive a payment from the Forest Carbon Partnership Facility (FCPF), administered by the World Bank. The FCPF distributed $6.4 million, which equated to 1.3 million certified emission reductions or carbon credits created by community-level efforts in nine Zambézia provincial districts. The government should earn a total of $50 million in compensation for reducing carbon emissions by 10 million tons through 2024.
Similarly, the United Nations approved 187 million Gabonese carbon credits in early October 2022, valuing the entire holding at more than $1 billion. More recently, in March 2023, Liberia signed a Memorandum of Understanding awarding exclusive rights to a private Emirati firm Blue Carbon over one million hectares of forest, or nearly 10% of the country’s geographical area. This corporation will be in charge of marketing the carbon credits obtained via conservation or reforestation efforts.
Guinea-Conakry, like its neighbor Liberia, is part of the Western Guinea Lowland Forest Ecoregion, a biodiversity hotspot that stretches from Sierra Leone and Guinea in the west to the Ivory Coast and Cameroon in the east, comprising over 27% of Guinea’s geographical area. This ecoregion is largely made up of mangroves, which are able to store three to four times more carbon than forests found on land. It acts as a carbon sink and a natural barrier to climate change. It is also believed to be capable of absorbing more CO2 than the Amazon rainforest.
Guinea-Conakry has considerable potential to enter the carbon credit market, utilizing its forest management abilities. Carbon credit costs range from $1 to $10 depending on the kind of operation, with credits from forestry projects averaging approximately $9.6. According to 2022 EY research, if corporations expand their efforts to achieve net-zero emissions, carbon prices might grow to a central estimate of $80-$150 per ton by 2035. This would provide a significant revenue opportunity for a nation like Guinea-Conakry, which might be reinvested in other areas, such as the energy industry.
Guinea-Conakry, for its part, offers substantial oil and gas potential. While commercial oil discoveries have yet to be made, recent offshore finds in the larger MSGBC basin have made the country’s offshore market more appealing. The national oil firm of Guinea-Conakry, Société Nationale de Petroles, is looking at financing new technological equipment required for prospection and exploration under efforts to unlock the potential of the country’s offshore acreage.
Collaboration inside and outside the MSGBC area can help Guinea-Conakry’s attempts to grow its energy industry and conserve its forests. Sharing experiences and best practices with adjacent countries pursuing similar efforts can result in collective environmental and economic improvement. The MSGBC Oil, Gas & Power Conference and Exhibition, slated for November 21–22 in Nouakchott, is centered on regional collaboration. This event provides a forum for nations in the MSGBC basin, particularly Guinea-Conakry, to establish cooperation and share insights on energy sector issues and possibilities.