Sri Lanka’s Carbon Offset Initiatives: Pioneering Sustainability and Carbon Credits

Situated in the heart of South Asia, Sri Lanka is positioning itself as a trailblazer in the global battle against climate change through innovative carbon offset initiatives and sustainable practices. 

A carbon credit is a trade-able permit that authorizes the emission of a specific quantity of carbon dioxide or equivalent greenhouse gases, serving as a key component in cap-and-trade programs to encourage emission reductions, wherein companies can earn, buy, or sell these credits as part of efforts to mitigate and offset their environmental impact. 

Sri Lanka has been proactively involved in various carbon offset initiatives that contribute significantly to the global effort to combat climate change. One noteworthy example is the Integrated Tropical Peatland Restoration Programme, led by the National University of Singapore (NUS), showcasing the nation’s commitment to biodiversity conservation and carbon sequestration. 

In the Sri Lankan context, reforestation, mangrove conservation, and renewable energy projects are focal points in the carbon offset strategy. Initiatives like the ‘Vanaropa’ reforestation program aim to restore and conserve Sri Lanka’s forests, earning carbon credits that can be traded internationally. The nation’s dedication to renewable energy, including solar and wind projects, not only reduces carbon emissions but also generates valuable carbon credits.

Carbon Trading Exchange in Sri Lanka

Sri Lanka is set to introduce legislation for its first carbon trading exchange program. This initiative, specific to Sri Lanka, aims to include projects reducing greenhouse gas emissions and trading resulting emission reduction credits. The exchange program, under the Ministry of Trade and Consumer Affairs, will involve the private sector within the Sri Lankan context. Companies failing to meet emission limits can buy credits from compliant businesses, fostering a market-driven approach to carbon reduction within Sri Lanka.

The Role of Carbon Credits in Sri Lanka

The Sri Lanka Carbon Crediting Scheme (SLCCS) plays a pivotal role in the country’s carbon offset initiatives. In the Sri Lankan context, this voluntary scheme enables companies to earn Sri Lanka Certified Emission Reduction Units (SCERs) by implementing emission-reducing projects. These units can be used to offset the company’s emissions or traded internationally, creating a new revenue stream specific to Sri Lanka.

More exactly, the SLCCS is supporting local clean projects for greenhouse gas emission reduction, specifically designed for the Sri Lankan context. This scheme enhances credibility, transparency, and quality in emission reduction projects, presenting various benefits for the Sri Lankan environment, society, and economy.

Furthermore, Carbon credit projects under SLCCS often involve activities in rural areas, such as reforestation and sustainable agriculture. These projects contribute to employment creation and improved livelihoods for local communities, showcasing SLCCS’s multifaceted benefits.

Carbon Credits and Sri Lanka’s Potential

Carbon credits hold immense potential for Sri Lanka, offering economic and environmental benefits within the Sri Lankan context. By participating in carbon credit programs, Sri Lanka can mitigate climate change, generate revenue through credit sales, foster rural development specific to Sri Lanka, and engage in international collaborations. These initiatives align with Sri Lanka’s commitment to international agreements like the Paris Agreement.

Major Players and Private Sector Involvement

Private sector engagement is pivotal in propelling Sri Lanka’s carbon offset initiatives. In 2021, the discovery of a new species of tree in Indonesia by a team led by Sri Lankan-born conservationist Lahiru Wijedasa sheds light on the potential for the country to earn carbon credits and underscores the potential for private entities in Sri Lanka to contribute to environmental conservation.

Several notable Sri Lankan companies, including major tea producers like Dilmah Tea, have taken substantial steps towards carbon neutrality, making a significant impact in the Sri Lankan context. Dilmah Tea has achieved carbon neutrality by offering a range of carbon-neutral products. 

Sri Lankan Airlines, the national carrier, has become one of only six airlines globally to be accredited for its ‘Flygreen’ program, showcasing the aviation sector’s commitment to sustainability. Moreover, many other companies have started to follow. Such as the Kirkoswald Small Scale Hydropower Project and Weverly Hydropower Project of Bogo Power (Private) Limited, the HPL Solar PV Bundle Project of Horana Plantations PLC, Eagle Power (Pvt) Ltd and the Tokenize Amazon Project. So, what has Sri Lanka done to make this happen?

Sri Lanka’s Climate Fund

The Sri Lanka Climate Fund, established under the Companies Act, focuses on building a low-carbon economy and lifestyle within the Sri Lankan context. The success of carbon credit initiatives, including those under the SLCCS, depends on effective project implementation, monitoring, and verification within Sri Lanka.

Challenges and Opportunities

Despite commendable progress, Sri Lanka faces challenges in sectors like transport, electricity, industry, and waste, which have been slow to adopt carbon reduction initiatives. In the Sri Lankan context, addressing these challenges involves creating a more conducive environment through incentives for low-carbon technologies. Strengthening the SLCCS framework and garnering international recognition can boost demand for carbon credits, attracting more industries to participate within Sri Lanka. Additionally, investing in capacity building and education programs will ensure a pool of experts in low-carbon technologies unique to Sri Lanka.

In conclusion, Sri Lanka’s proactive approach to carbon offsetting and carbon credits, as discussed in the Sri Lankan context, reflects its dedication to global climate goals. With ongoing projects, private sector involvement, and plans for a carbon trading exchange specific to Sri Lanka, the nation stands poised to lead in sustainable development, ensuring a greener and more resilient future for generations to come.

-G. R. Diwyanjalee-