Gabon Carbon Credits Seen Fetching as Much as $35 a Ton

(Bloomberg) -- Gabon’s environment minister said the country’s carbon credits may fetch $35 a token with the African country planning the release of a record 90 million credits onto the voluntary carbon market as it seeks ways to finance the conservation of its carbon-absorbing forests. 

“My own ballpark would be $25 to $35,” Lee White, Gabon’s environment minister, said during a webinar on Friday. “That’s about the right price right now.”

Gabon is the world’s second-most forested nation and has created the credits via the United Nations Framework Convention on Climate Change’s REDD+ mechanism.  White expects they will be ready for sale this month.

Read: Gabon Record Carbon Credit Sale a ‘Litmus Test’ Before COP27

The credits will be marketed by the country’s sovereign wealth fund and sold via a new platform, redd.plus, a collaboration between S&P Global’s IHS Markit, CBL commodity exchange, and the Coalition for Rainforest Nations, which represents over 50 developing countries.

“We can’t keep paying developing countries pennies on the dollar” and expect them to implement their climate action plans, Kevin Conrad, the coalition’s executive director said on the call. “We have to have a fair carbon price in order for that sustainable transition that we require.”

Similar credits are selling on the redd.plus platform for about $16, and some have warned the massive Gabon offering could make the price drop.

“If 90 million tonnes from Gabon over ten years can flood the market, then the market is not fit for purpose and the global community has to do something to fix this,” White said. “My prediction is there is the appetite out there because the world is slowly coming to terms with the seriousness of climate change.”

The country plans to use the revenue from the sales for a biodiversity fund, a community development fund, to refinance debt, to support its budget and to expand its sovereign wealth fund to invest in climate resilience infrastructure, Akim Douada, the fund’s chief executive officer, said on the call. 

The credits still need to be registered on the UNFCC’s Lima REDD+ Information Hub and then entered into the registry of Gabon’s sovereign fund before they’ll enter the market, White said. 

A carbon credit is a token representing a ton of emissions removed, reduced or avoided from the atmosphere.

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