R-evolution, a subsidiary of Swedish tech group Hexagon, will supply multi-dimensional intelligent mapping services of The Bahamas’ seabed, providing the necessary data to enable a blue carbon trading market in the country.
- R-evolution will provide intelligent mapping services to map the Bahamian seabed.
- The world’s largest seagrass bed is located in the Caribbean country, storing hundreds of millions of tons of CO2.
- The Bahamian government sees the mapping of the seabed as a crucial step to establishing the world’s first blue carbon credit market.
R-evolution applies Hexagon’s digital reality technology to nature-based solutions
Hexagon (STO:HEXA-B), a Swedish provider of automation technologies, launched R-evolution in 2021. Its aim was to leverage Hexagon’s sensor, software and autonomous solutions to address environmental problems. Since then, R-evolution has also launched a venture capital arm to invest in green tech innovation.
R-evolution is involved in four project areas around sustainability. It provided hardware- and software-based monitoring solutions for the construction and operation of a solar park near Malaga, Spain. It entered the green hydrogen space through a strategic partnership with Hydrogen Utility to provide digital twin technology, and is also looking to apply the same technologies to wind energy projects.
In December 2021 it collaborated with ocean conservation NGO Beneath The Waves to map the seagrass meadows of the Caribbean Islands. The NGO partnered with R-evolution to validate its initial findings as well as to provide a solution for year-on-year change detection and health monitoring of the seagrass ecosystem.
Blue carbon credit trading can provide support for Bahamian economic challenges
Re-evolution and Beneath The Waves now plan to expand the current coverage to include 1,100 square kilometres in The Exumas, Bahamas. Overall, R-evolution estimates that the seagrass meadows make up an area of 92,000 square kilometres. The project will provide the necessary data and support needed by the government of The Bahamas to begin trading blue carbon credits.
This is vital for the country’s economy, as the government believes it will attract much-needed investment. The Bahamas is among the island nations in the Caribbean that are most vulnerable to climate change-related disasters.
In its most recent country report, the International Monetary Fund projects that the economy of The Bahamas will take until 2024 for the country to recover to pre-pandemic levels. It also highlights worsening medium-term growth challenges as public finances are in a “more precarious state” compared to previous years, due to a difficult near-term financing situation, rising inflation and the country’s high vulnerability to natural disasters.
Establishing the first blue carbon credit trading market faces challenges
The Bahamian government passed the Carbon Trading Bill in July 2022, which provides for the state to retain 85% of the revenues generated by blue carbon credit trading. It formed a company called Carbon Management Ltd. to manage its blue carbon assets. Trading was expected to be conducted through the crypto exchange FTX, which is based in the Bahamas.
FTX, however, filed for bankruptcy in November 2022 due to excessive customer withdrawals. This will require the Government to find an alternate means of offering the blue credits, which it had planned to do by the end of 2022. Currently, Bahamian blue assets are being verified by the Voluntary Carbon Standard.
Tapping the potential of blue assets to drive the net zero transition
Blue assets, or blue carbon ecosystems, have been gaining attention for their ability to mitigate climate change by capturing and storing CO2. According to the World Economic Forum, coastal and marine ecosystems can store up to five times the carbon per acre of tropical rainforests. As such, investing in blue carbon projects becomes an important pathway to achieving the goals of the Paris Agreement.
According to UNESCO, 50 Marine World Heritage sites that make up less than 1% of global ocean area host 21% of the world’s ecosystems. This helps store 15% of the blue carbon, equal to 10% of global greenhouse gas emissions. The awareness being created by UNESCO and NGOs is leading to a blue carbon gold rush.
In March 2022, global commodities trader Trafigura purchased the first tranche of blue carbon credits from the Delta Blue Carbon Project in Pakistan. It comprised 3 million units of blue credits, while the whole project, spanning an area of wetlands of 865,000 acres, is considered the largest mangrove restoration project in the world.
Looking ahead to a brighter blue carbon future for the Bahamas
Sorting out the means to trade blue carbon credits could provide The Bahamas with a substantial financial opportunity. Anthony Ferguson, director of Carbon Management, reportedly said at COP27 that there is potential for 9 million blue carbon credits available for trade from the country by 2030.
Depending on prevalent carbon prices, this could be significant. The addition of co-benefits can raise the price of standard carbon credit, according to carbon marketplace provider Climate Trade. Blue carbon credits also have many co-benefits, such as mangroves providing protection to coastal areas from weather, while also providing an ecosystem for flora and fauna.