Hess Corporation’s decision to buy carbon credits from Guyana will result in an emissions ‘offset’ that is nearly 10 times the company’s total global emissions in 2022. The New York-based global independent energy company has partnered with the government of Guyana in a historic agreement to support the country’s efforts to conserve its extensive forests. The agreement also aligns with Guyana’s Low Carbon Development Strategy 2030.
As per the terms of the agreement, Hess Corporation will purchase 37.5 million high-quality REDD+ (Reducing Emissions from Deforestation and Forest Degradation) carbon credits from the Guyana government between 2022 and 2032, for at least US$750 million. Each carbon credit represents the reduction or removal of one metric tonne of carbon dioxide equivalent (CO2e) emissions by Guyana’s conserved forests, leading to a total offset potential of 37.5 million tonnes of CO2e for Hess.
To put this number into perspective, the company’s total equity Scope 1 and 2 greenhouse gas (GHG) emissions for the year 2022, according to its 2022 Sustainability Report, were relatively flat, when compared with its 2021 emissions of around 3.9 million tonnes. Therefore, the amount of carbon credits that Hess Corporation plans to purchase could offset its 2022 emissions almost 10 times. This signifies a major step forward for Hess’ commitment to achieving net-zero emissions.
The company’s strategy to counter climate change is twofold. On one hand, it seeks to reduce direct emissions and deploy advanced technologies with respect to its operations. On the other hand, it acknowledges the role of market mechanisms such as carbon credits in achieving global emission reduction targets.
“Hess’ carbon credits agreement with Guyana directly deals with avoiding deforestation in Guyana, and this agreement provides us with a unique opportunity to utilise credits from a country in which our production is growing,” the company stated.
The Stabroek Block, in which Hess holds a 30% stake, produced approximately 297,000 barrels of crude per day (bpd) in 2022. Hess’ equity emissions from Guyana in 2022 were 0.7 million tonnes.
The ExxonMobil-led consortium has increased production to almost 400,000 bpd this year and is expected to start up an additional project before year-end, raising production to 600,000 bpd by early 2024. Production will increase to 1.2 million bpd by 2027.
The Texas-based Welligence Analytics had also said last year that the Hess carbon credits deal can offset emissions from the Stabroek Block for a decade.
