December 7, 2022 saw the adoption of two presidential decrees, one creating the Benin Carbon Projects Registration Authority (AEPC) and making it mandatory for all carbon projects to be registered with it, and the second setting out the registration procedures. These two presidential decrees have made it possible to establish an administrative framework securing all of Benin’s past, current and future carbon assets, whether from private or public projects, and thus guaranteeing transparency, quality and their compliance with the country’s sustainable development objectives.

The Registration Authority has been set up to list all past, present and future carbon projects in Benin, to promote them, and to oversee the management of the register. It will also play the role of regulator, ensuring that projects comply with regulations by authorizing their registration. Project owners will then be able to submit their projects directly to international certification standards. The aim of these combined actions is to increase the transparency and competitiveness of the carbon market in Benin and of the carbon credits generated internationally. The AEPC is a tool for implementing part of Benin’s strategy for optimizing carbon finance and sustainable development.

Carbon credits offer organizations and individuals the opportunity to offset their own emissions while supporting sustainable development, thereby contributing to global efforts to combat climate change. One carbon credit is equivalent to the reduction or sequestration of one metric ton of carbon dioxide (CO2) from the atmosphere.

When an organization, state or company manages to reduce its CO2 emissions below its authorized quotas, it generates a surplus which it can sell to other organizations, states or companies having difficulty reducing their own emissions. This system works like an exchange market, where ecologically responsible companies, governments and organizations can sell their surplus carbon credits to those who are less so. This approach is beneficial for the planet, encouraging states, companies and organizations to reduce their pollution and seek out more environmentally-friendly practices.

Overall, carbon credits are a tool for regulating and reducing the amount of CO2 in the atmosphere, thereby helping to combat climate change. Essentially, they are an incentive mechanism designed to encourage people to adopt environmentally-friendly behavior and avoid exceeding carbon emission limits.

Les crédits carbone trouvent preneurs auprès d’une variété d’acteurs, parmi lesquels, on compte notamment :

• Les entreprises acquièrent des crédits carbone pour compenser leurs propres émissions de gaz à effet de serre.
• Governments can purchase carbon credits to meet their emission reduction commitments under international agreements, such as the Paris Agreement, or to comply with national climate policies and regulations.
• Some individuals choose to acquire carbon credits on a voluntary basis in order to offset their personal carbon footprint, be it emissions linked to air travel, the use of personal vehicles or domestic energy consumption.
• Environmental non-governmental organizations (NGOs) and other entities purchase carbon credits to support specific projects, promote sustainable development or advocate climate action.
• Financial institutions and investors can acquire and trade carbon credits as a commodity, invest in carbon offset projects in search of potential returns, or hedge against climate risks.
• Some brokers and intermediaries specialize in buying and selling carbon credits on the market, acting as intermediaries between buyers and sellers.

The cost of a carbon credit can vary considerably depending on a number of parameters. Carbon credits come from a variety of projects, each with its own production costs,
methodologies, locations and impacts. Several factors influence the price of carbon credits:

• The nature of the project, whether it involves renewable energy production, reforestation or methane capture, can have an impact on the cost of producing carbon credits. Each type of project involves varying levels of investment, technology and
  technology and complexity, which can influence the price.
• Project location can lead to variations in costs related to land, labor, materials and regulatory compliance. Projects located in remote areas or in regions with higher development costs can result in more expensive carbon credits.
• Larger projects can benefit from economies of scale, leading to lower unit costs for the production of carbon credits. Smaller projects may have higher costs due to the absence of the benefits of economies of scale.
• Different types of project may be subject to different monitoring and verification procedures, including those related to nature-based or technological solutions, and these procedures may be accompanied by different assessment costs. This differentiation can result in varying prices for carbon credits.
• Some carbon credits may be more expensive because of the additional social, environmental or economic benefits they offer, due to the certification standards chosen. These benefits may include preserving biodiversity, supporting local communities or creating jobs. It is essential to consider not only the price, but also the overall impact and credibility of carbon credits when making a decision.

A carbon registry is a comprehensive digital system designed to monitor carbon emissions and carbon offset projects. This tool is widely used to monitor, document and verify the environmental impact of activities generating greenhouse gas emissions, from business to transportation to energy production.

The register records actions taken to reduce or offset carbon emissions, such as tree planting, switching to more environmentally-friendly energy sources or improving energy efficiency. The register guarantees the reality and effectiveness of these measures, playing a fundamental role in the fight against climate change by providing a means of tracking and managing initiatives aimed at reducing the carbon footprint of various entities.

Carbon registries make it easier to quantify and verify the environmental impact of various projects and initiatives, while enabling carbon credits to be traded. This possibility encourages new actions to reduce emissions and reinforces the fight against global warming. They also enable the exchange of carbon credits between buyers and sellers, and guarantee against any double-counting of credits when an exchange takes place.

The Voluntary Carbon Market (VCM) is a market system dedicated to the buying and selling of carbon credits that are not subject to an emissions reduction constraint or mandatory limit. It provides a platform where organizations can voluntarily offset
their greenhouse gas emissions by purchasing and retiring carbon credits. This enables companies and individuals to take steps to consciously reduce their impact on the environment.

Offsetting involves the reduction of greenhouse gas (GHG) emissions by one entity in order to counterbalance the emissions produced by another. The aim of offsetting is to achieve an overall reduction in emissions, even if an entity cannot directly reduce its own emissions, but rather helps to promote actions outside its value chain.

Although the terms are often used interchangeably, there is a distinction between carbon offsetting and carbon credits. A carbon credit is a transferable unit representing the reduction or elimination of one metric tonne of CO2 equivalent, while a
carbon offsetting refers to the act of offsetting an organization’s or individual’s greenhouse gas emissions by purchasing and retiring carbon credits.

A methodology is a set of guidelines and procedures put in place to calculate and estimate the amount of greenhouse gas (GHG) emissions reduced or eliminated by a specific project.

Accreditation is the impartial assessment of conformity assessment bodies to verify their competence and impartiality in carrying out specific activities, such as testing, calibration, inspection, validation, verification and certification. This assessment is carried out in accordance with internationally recognized standards.

Additionality is a key concept in voluntary carbon markets and climate initiatives. It stipulates that a project must result in a reduction or elimination of greenhouse gas emissions that would not have occurred in the absence of the project. In other words, the project must exceed current practice, and must not be required by law or regulation. The aim of additionality is to ensure that carbon credits or offsets reflect real, new emissions reductions. Without the concept of additionality, there is a risk of financing projects that would have happened anyway, without additional incentives, thus failing to deliver genuine environmental benefits and distorting the market.