- The DRC is inviting crypto businesses to bid for oil and gas exploration licenses.
- Thye hydrocarbon minister explained that this auction is to generate financial backing.
- Crypto companies have time until February to submit their bids.
The Democratic Republic of the Congo (DRC) is opening up oil and gas license auctions to crypto and carbon corporations that want to retain fossil fuels in the ground and sell coveted carbon credits instead, despite the fact that environmentalists and Hollywood A-listers alike have vehemently protested against these auctions.
Congo held an auction for 30 exploration areas last month. Some of the exploration areas are Virunga National Park and Cuvette Central, which are the world’s biggest tropical wetland that naturally absorbs carbon from the atmosphere.
To substantiate the argument, Didier Budimbu, the minister of hydrocarbons, stated that auctioning off the exploration zones might generate the funds required to construct offices, schools, and road infrastructure. He continued by saying that, as a sovereign nation, the DRC has the prerogative to use its natural resources.
He proposes not searching for hydrocarbons and instead making money by selling carbon credits to businesses wishing to reduce their emissions. Budimbu further emphasized that point by stating, “If it can help our economy and the country, why not?” He also mentioned,
We’re not doing this to destroy the rainforest, we’re doing it for economic gain… With or without oil, what’s important is that we earn [money].
The outspoken minister recalled, “A few years ago, people shoved their noses into this. We saw actors like Ben Affleck and Leonardo di Caprio get on their high horses and ask for the project to come to a halt,” He further stressed that opening up the auction process is one potential solution. However, there are cash concerns everywhere.
Eni, a major oil and gas company with operations in both France and Italy, has decided to boycott the auction. Major financial institutions, including JPMorgan Chase, Citigroup, Wells Fargo, and Morgan Stanley, refused to provide financing for the East Africa Crude Oil Pipeline in the neighboring country of Uganda, a sign of the growing reluctance of investors to support carbon-intensive projects.
On the other hand, Flowcarbon, a startup intending to convert carbon credits into crypto assets, has indicated an interest in bidding to cease exploration and instead provide carbon credits in the area, as has a coalition of carbon firms led by venture capitalist Thomas Annicq.
Flowcarbon, co-founded by WeWork’s Adam Neumann, is collaborating with environmental organization RedemptionDAO to purchase at least one block with the help of an oil business. The group is also attempting to gather funds through crowdfunding but has so far raised less than $3 million of its $50 million goal.
Furthermore, companies have till February to submit bids. Analysts estimate that devising a technique may take up to two years. However, there is currently no recognized process for bringing credits from foregone oil and gas exploration to the market.