Page 5 - AfrOil Week 11 2023

AfrOil COMMENTARY AfrOil

But there is room for scepticism about this Additionally, the non-governmental organ-
figure. isation (NGO) argued that the decision to
open the area to hydrocarbon exploration went
Questions about business case against DRC’s agreement with the Central Afri-
Critics have cautioned that forests do not store can Forest Initiative (CAFI), an international
carbon permanently and have noted that some coalition of European, Asian and African states
investors might buy credits to compensate for set up in 2015 by six Congo River basin coun-
increasing emissions. They have also pointed tries, South Korea, the EU and a coalition of
out the shadow cast over the industry by the European states, pledged last year during the
recent scandal over the alleged ineffectiveness COP26 summit in Glasgow to provide $500mn
of projects certified by leading carbon-credit in funding to DRC for deforestation initiatives
provider Verra. over a period of five years. To receive the funds,
Additionally, they have voiced concerns Kinshasa must meet certain requirements,
about corruption and the lax regulatory envi- including granting protected status to 30% of the
ronment in the DRC, saying that the country country’s land area and restoring 80,000 square
might not be in a position to monitor the pro- km of degraded forests and lands.
jects effectively.
Nevertheless, other observers have been Pushing back
more optimistic. One Western diplomat follow- Greenpeace’s critiques did not garner much
ing environmental issues in the DRC told AFP sympathy among DRC officials. According to
that EQX Biome’s plan was very ambitious and a report from AfricaNews.com, Environment
that carbon credits should be explored as a tool Minister Eve Bazaïba said in July that Green-
to fight deforestation, despite criticisms of the peace’s complaints were groundless. The gov-
relatively new mechanism and the fund’s lack of ernment had carried out all of the necessary
experience in the Central African country. environmental studies before making explo-
As of press time, it was still not clear which ration rights available to investors, she said in Even if EQX
IOCs had submitted bids for the 27 oil blocks remarks broadcast on public television.
included in the DRC’s licensing round. The auc- Bazaïba also declared last October that Kin- Biome’s
tions are still open, with the closing dates falling shasa had pushed back against a request from
in July for blocks in the Cuvette Centrale region, the US government. When US climate envoy bid comes
which comprises forests and peatlands, and in John Kerry asked the DRC’s President Felix Tsh- to nothing,
October for other blocks. isekedi to reduce the number of blocks included
DRC’s Hydrocarbons Minister Didier in the onshore licensing round from 30 to 24, the there will
Budimbu has previously indicated that he is president refused, she told Bloomberg. Indeed,
open to bids from carbon-credit groups, and she said, Tshisekedi insisted that country had probably be
Thomas Annicq, the CEO of US-based car- the right to develop its own resources and would other groups
bon-credits firm Oneshot.earth, said that his take measures to protect the environment.
company had expressed an interest in the bid- The minister went into more detail in a sep- that follow its
ding contest. Annicq also stated, though, that arate interview with Reuters, saying that the
Kinshasa had never responded to a request for president had not agreed with the US official’s example
further information. contention that the blocks ought to remain
“I felt like they didn’t take it seriously,” AFP untouched because they encroached upon the
quoted him as saying. He went to say that he Virunga National Park and peat bogs that act as
believed that carbon credits were a better long- a carbon dioxide sink. The DRC has come to dif-
term business proposition than fossil fuels. ferent conclusions after investigating the matter,
The annual value of the voluntary carbon she declared.
market came to around $2bn in 2021, and it is “Those who think the six blocks pose a prob-
projected to rise to $10-40bn per year by 2030. lem should come and re-assess,” she remarked.
She further stressed that the DRC had the
Precedents sovereign right to make decisions about what
Even if EQX Biome’s bid comes to nothing, happened within its own borders, even as the
there will probably be other groups that fol- international community sought to reach a
low its example. The US fund is hardly the first consensus on climate goals. “Nobody can put
organisation to argue that the DRC ought to pressure on us ... [No] convention in the world,
forego the potential financial rewards of hydro- not even the Paris Agreement, forbids a country
carbon development for some other form of from emitting CO2 for development reasons,”
remuneration. she told Reuters.
Last year, for example, Greenpeace repeat- She did tell Bloomberg that DRC officials
edly criticised Kinshasa’s decision to expand the were willing to discuss the matter with Washing-
total number of blocks included in the onshore ton but stressed that these talks would not affect
bidding round from 16 to 30. (The three sites for the outcome of the licensing round.
which EQX Biome has not submitted bids are Since then, Kinshasa has generally continued
gas-bearing blocks in the Lake Kivu region.) It to strike a similar tone – and it will probably keep
also sought to draw attention to the fact that up doing so as long as it sees oil and gas demand as
to 12 of the 27 oil-bearing blocks were located strong enough to justify development. As such,
within the Cuvette Centrale peatlands, a key EQX Biome and its cohorts may be fighting an
carbon sink. uphill battle for some time yet. ™

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