Kuensel | Yangyel Lhaden | June 26, 2024
The Dagachhu Hydropower Project, between 2015 and 2023, generated about 700,000 tonnes of carbon emission credits—tradeable emissions—earning more than Nu 7.77 million, according to Gem Tshering, minister for energy and natural resources.
This information was shared by the minister during the question-and-answer session in the National Assembly yesterday.
The question was raised by Naiten Wangchuk, MP for Mongar constituency, who inquired about the potential for carbon market trade and the progress of trades from registered hydropower projects under the Clean Development Mechanism (CDM).
The carbon market is a system that allows for the buying and selling of carbon credits to regulate and reduce greenhouse gas emissions.
Naiten Wangchuk highlighted Bhutan’s potential in carbon trading, noting the country’s reputation as carbon negative with a sequestration capacity of 8.5 million tons of carbon dioxide—ten times more than the national carbon dioxide emissions.
Dagachhu is one of the three registered CDM projects under the Kyoto Protocol. The other two hydropower projects are Mangdechhu and Punatsangchhu.
Bhutan adopted the Kyoto Protocol in 1997 and the Paris Agreement in 2015, both international treaties committing to the reduction of greenhouse gases to combat climate change.
The CDM, outlined in Article 12 of the Kyoto Protocol, permits countries with emission-reduction commitments to implement emission-reduction projects in developing countries.
Naiten Wangchuk also inquired about the revenue generation from Punatsangchhu projects, plans to register new renewable energy projects under Article 6.4, and the potential revenue from upcoming projects.
Article 6.4 of the Paris Agreement enables countries to voluntarily cooperate in implementing their climate actions and facilitates the use of international carbon markets to achieve emission reductions.
Gem Tshering said that due to the status of the Punatsangchhu Hydropower Project, it could not participate in the carbon trade market so far. “Although Bhutan is part of the Paris Agreement and the Kyoto Protocol for carbon trading, both have not been fully operational. This is why Druk Holding Investment (DHI) is venturing into carbon trading.”
The DHI is working with Singapore for Bhutan to enter into the carbon market.
“In the 13th and 14th plans, 5,413 megawatts (MW) of hydropower, 2,526 MW of solar energy, and 28 MW of wind energy are planned to be constructed,” Naiten Wangchuk said. “The existing registered renewable energy projects and future projects that are in the pipeline could potentially generate a good amount of revenue from carbon trading if pursued with vigor under the Article 6.4.”
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