GenZero to invest in carbon project in Ghana; credits produced may offset Singapore’s emissions
INVESTMENT company GenZero has signed a memorandum of understanding (MOU) with carbon project developer AJA Climate Solutions to invest in a US$30 million landscape restoration project in Ghana.
The funds will be disbursed in phases between 2023 and 2033, said GenZero on Thursday (Jun 8).
Once the project is implemented, the carbon credits generated from the restoration will come with corresponding adjustments, with the first issuance targeted in 2028.
This means that corporates that bought these credits would be able to offset part of their liability under Singapore’s carbon tax. These credits may also be used to offset Singapore’s national emissions.
The Singapore government has allowed companies to use high-quality, international carbon credits to offset up to 5 per cent of taxable emissions, in lieu of paying the carbon tax. It is currently at S$5 per tonne of carbon dioxide equivalent, but will be raised to S$25 in 2024 and 2025, and then S$45 in 2026 and beyond. The plan is for the carbon tax to reach between S$50 and S$80 per tonne by 2030.
Carbon credits that come with corresponding adjustments mean that the emissions being offset is only counted once by the country that bought the credits, while the country that produced them would give up the right to use the credits to meet their own national targets. This is to avoiding the double counting of underlying emissions reductions or removals when carbon credits are traded.
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The project is expected to generate around 20 million carbon credits over 30 years and intends to apply new methodologies under Verra – a widely-used standard in the certification of carbon credits – and be aligned with Article 6 of the Paris Agreement.
The MOU comes after governments of both countries concluded negotiations on an implementation agreement that enabled the bilateral transfer of carbon credits, which is aligned with Article 6 of the Paris Agreement.
The article governs how countries can pursue voluntary cooperation to achieve their national net-zero targets, through the use of carbon credits.
The upcoming project, which is slated to begin in the fourth quarter of this year, is located in the greater Kwahu area in the east of Ghana, and aims to regenerate an estimated 100,000 hectares of degraded lands, restore the landscape’s biodiversity and transform it into an economically-productive ecosystem for the local indigenous population, said the Temasek-owned investment company in a media release.
It also aims to create new income opportunities for the local indigenous communities through agroforestry practices training and job creation, and empower 22,000 members of the local community with the opportunity to actively participate in the farming system and improve their livelihoods.
The first phase of the project will focus on regenerating deforested cocoa lands and rewilding off-reserve forests across Kwahu East, Kwahu South and Asante Akim North.
The second phase, targeted to start in 2027, will focus on regenerating native tree species across degraded forests at the Kwahu Afram Plains.
Frederick Teo, chief executive officer of GenZero, said that its collaboration in Ghana represents an important effort to ensure the integrity, quality and transparency of the carbon credits being developed, and bring about a positive impact to the local community and ecology of Ghana.
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