Landbank to sell carbon credits to World Bank

The Land Bank of the Philippines (LBP) has agreed to sell carbon credits sourced from methane-capture projects to the World Bank, giving the state-run bank additional revenues of around 2.44 million euros over four years. Landbank, the country’s fourth largest, would act as “coordinating and managing entity" of the “Methane Recovery from Waste Management Project" that encourages piggeries and landfill operators, among others, to adopt technologies to capture methane and use it as fuel to generate electricity. Methane has been said to account for a third of the country’s greenhouse gas emissions. The carbon credits, formally called carbon emission reductions (CERs), would be issued to those that successfully used methane to generate power, substituting for electricity supplied by generation plants using fossil fuel. As coordinating and managing entity, Landbank would acquire CERs from local government units, private piggeries, project developers and service providers, bundle these and sell these to the World Bank under their emission reduction purchase agreement. The agreement, signed yesterday, was undertaken under the auspices of the Clean Development Mechanism (CDM) provided by the Kyoto Protocol that awards CERs to greenhouse gas emission-reduction projects in developing countries. These CERs may be sold to industries or governments in developed countries to reduce their emissions. In a statement, Landbank President Gilda E. Pico said the agreement affirms the bank’s commitment in addressing global warming. “Landbank is the very first bank in the Philippines to venture and seal a carbon-purchase sale agreement with a carbon buyer for CDM projects," she said. World Bank Country Director Bert Hoffman said in the same statement that the agreement with Landbank shows how carbon finance could be used to encourage private and public investments in projects aimed at reducing greenhouse gas emissions. “Individual projects, while important, produce small volumes of emission reductions and benefit only a few players. The use of a programmatic approach allows multiple projects to be combined under one institution or intermediary, like Landbank, thus generating significant impact, and benefiting more players including poor communities," he said further. World Bank would purchase the CERs from Landbank using funds from the Spanish Carbon Fund. Landbank notched P5.4 billion in net profit in the nine months to September last year. - BusinessWorld