INTERVIEW: Benin announces first Article 6 pilot carbon projects
Quantum Commodity Intelligence – The West African country of Benin has a solid pipeline of 40 projects, 18 months after clarifying its policy on carbon credits, Adidjatou Hassan, a senior official within the Ministry of Economy and Finance and President of Benin's Carbon National Authority, told Quantum.
Benin was one of the first nations globally to specify its framework for carbon credits following the finalisation of Article 6 of the Paris Agreement at COP26 in November 2021, and is in the process of launching officially the first projects as well as looking for additional investments.
The country passed two bills in December 2022 that defined an overall framework for carbon credits and created a carbon market authority, called Autorité d'Enregistrement des Projets Carbone (AEPC), in charge of handling project registration.
AEPC sits both under the Ministry of Environment and the Ministry of Economy and Finance.
The bills give powers to approve carbon certification standards for use in the country as well as any Corresponding Adjustments (CAs) for private projects.
CAs are a greenhouse gas accounting practice under the Paris Agreement that remove credits from a host country's emissions ledger to avoid them being double counted towards two countries' emissions goals, and are a key goal for some investors.
Benin has said it will negotiate with developers on a case-by-case basis both the fee paid to the Treasury and whether it will allow CAs for a specific scheme, but is confident the setup is conducive to further investments in the country.
A major concern that triggered the need for such governance is whether a specific project overlaps with the country's "unconditional" target under its Paris goals, in which case the export of CAs may prevent it from achieving its targets.
Some countries, such as Kenya and Tanzania, have chosen to publicise blanket taxation levels for carbon projects, while others prefer the case-by-case approach.
"We ensure national ownership of Benin's carbon assets via coordination and approval of projects generating carbon credits, centralisation of these carbon credits held at the national level," said Hassan, who is in charge of the carbon credits portfolio.
"Because we want to remain attractive to private developers, our approach is to say, once we have validated the project which is in line with our action plan, development, with our Nationally Determined Contribution (NDC), we can enter into a partnership with the private promoter to transfer or grant them 100% or part of the carbon credits that they will generate," she added.
Energy and soil carbon
The authorities have identified two key sectors under Article 6 – energy and agriculture – and Hassan said of the 40 carbon projects currently in the pipeline, around 30 are energy-related.
The rest are in the farming sector, which makes up nearly one third of the country's GDP and 70% of employment.
So far, the energy projects include upstream production in solar or biomass farms, clean cooking and energy efficient buildings, she said.
Benin has also piloted carbon projects under Article 6.2 of the Paris agreement managed directly by central authorities, rather than private developers, the first such example worldwide.
One such pilot, for agroforestry, already covers 190,000 hectares in four regions, known as Agence Territoriale de Développement Agricole (ATDA) in Benin, and has potential to grow by around 15,000 hectares per year for agroforestry and 30,000 hectares per year for field crops over the next several years.
Adidjatou Hassan said it covers various crops, such as cotton, corn and soy, as well as the planting of cashew trees and other types of trees to fight desertification.
"There are some projects on which we are perhaps a little too early that need methodologies specifically created and adapted to our context," Hassan said.
Benin is also in the process of finalising agreements with major carbon standards, including US-based registry Verra and Switzerland's Gold Standard, and other international carbon standards.
These agreements will include communication protocols so that projects can be listed both in the national carbon registry and these registries.
Last week, Verra hosted a two-day "capacity-building workshop" in the country, which covered Article 6, Verra's new cookstove and REDD+ methodologies, and brought together attendees from government, the NGO sector and international organisations.
From 2022, any project registering in Benin had to list under AEPC.
