Recently, Didier Budimbu, Minister of Hydrocarbons of the Democratic Republic of the Congo, said that the state would accept applications from crypto companies with reliable financial support to participate in the tender for purchasing new oil and gas fields. However, the question arises: how can cryptocurrency companies be interested in buying such fields?
It all started when U.S. President, Joe Biden, visited Saudi Arabia and urged the governments of the Central African republics to increase oil and gas production in connection with the Russian-Ukrainian conflict. Responding to these urges, the Congolese government has given the go-ahead for oil exploration in the Virunga National Park and the world’s largest tropical peatland, Cuvette Centrale.
To be clear, extraction in these areas had previously sparked a worldwide backlash. In 2014, the global environmental community virtually banned the DRC from drilling in these areas because the territory is a habitat for endangered gorillas.
Despite activists’ protests, the areas will be auctioned by the end of this year. According to Tosi Mpanu-Mpanu, the DRC’s Lead Climate Change Specialist, the country’s priority “is not to save the planet” but to reduce poverty and ensure economic growth.
However, Budimbu suggested that the auction should be attended by representatives of industries that aren’t associated with big oil and gas companies. Namely, cryptocurrency companies and startups within the carbon market. In the case of the acquisition of drilling rights, such participants are invited to keep oil and gas in the ground and instead receive income from selling carbon credits, which will accrue according to the Clean Development Mechanism introduced by the Kyoto Protocol. The sale of tokenized carbon credits based on Ethereum is already widely practiced by the BetaCarbon platform, for example.
Therefore, the Congolese government can obtain the necessary funding to develop the economy without facing the criticism of environmental activists.
It should be noted that Budimbu’s initiative has already received a response. The blockchain startup, Flowcarbon, has shown interest in the purchase. Moreover, news broke of a coalition of several carbon market companies willing to join forces to participate in the bidding.
Rafael Correa, the ex-president of Ecuador, proposed a similar approach to solving economic problems 15 years ago. At that time, Ecuador managed to attract $3.6 billion in investments for the country’s refusal to drill in the Yasuni National Park. However, the investments back then were purely philanthropic and mostly came from environmental organizations.
Now the Congolese government plans to attract capital from the actively developing innovative industry. And it’ll probably be more successful than Ecuador. On the other hand, the fields have a high market value, and it’s unknown whether crypto companies or startups in the carbon market will be able to attract sufficient funding for this purpose.
This approach could be another example of blockchain technology being used for global green initiatives, on par with Avelia, the recently launched blockchain-based platform for Sustainable Aviation Fuel (SAF) credits.
