INTERVIEW: Colombian carbon group calls for dialogue with govt.

28 Feb 2024

Quantum Commodity Intelligence – Colombia's government should open dialogue with the private sector to help create a legal framework for carbon markets to overcome judicial uncertainty over projects due to the lack of a clear definition of ownership rights for carbon credits, the Colombian Association of Carbon Markets (Asocarbono) told Quantum.

Francisco Ocampo, executive director of Asocarbono, spoke to Quantum following the publication of a report by the group last week that aimed to open a public debate over carbon markets in the country, especially on the back of what it called a lack of "clear signals" from the administration of President Gustavo Petro.

Ocampo said there are huge legal risks for carbon projects in Colombia currently as it remains to be seen whether the government will take a 'big-state approach' that could see projects 'nationalised'.

This has left the country's carbon market practitioners fraught with "uncertainty" not knowing which direction the Petro administration will turn.

"At the moment, all existing projects act on the basis that they are owners of carbon [credits] rights. We have operated for 20 years in Colombia, and there has never been a discussion around [this]," said Ocampo.

"But this discussion is now on the agenda of the current government, as they [may] want carbon credits to belong to the state, although we do not have an absolutely clear signal," he said.

The main problem is that the country still does not have a specific regulation or law for carbon markets, so there is no clear definition of what carbon credits constitute from a legal perspective.

Legal vacuum

According to Ocampo, this legal vacuum causes more uncertainty, particularly in national parks over ownership rights of credits – the state or the park inhabitants, such as Indigenous communities.

"There is no specific norm that talks about the property [rights] of carbon [credits]," he said.

"Currently in the middle of this process [of debating carbon credits ownership], there is a focus on… the participation of Indigenous communities, which are very active, especially the communities from the Amazon, and there is interest as well from communities from other regions in participating in these processes and mainly defend their participation in REDD+ projects and their rights over carbon [credits]," Ocampo said.

Nevertheless, the Colombian government has so far ignored requests from Asocarbono and other market players to start the development of a proper legal framework, said Ocampo, adding that the organisation has been waiting four years for clarity on this.

"We have asked the government on several occasions to open technical discussions in which the [carbon markets] rules can be discussed and allow them to obtain contributions from the association and other sectors that participate in the market," he said.

Ocampo also confirmed to Quantum that Renare, Colombia's national carbon registry, remains out of action despite expectations from market players that the issues regarding its administration would be solved by February.

"[Renare] is not operating," said Ocampo. "And the time for it to be operationalised is absolutely uncertain."

Renare was mandated through Law 1755 of 2015 and later created by Resolution 1447 of 2018, which shifted the registry's administration from the Environment and Sustainable Development Ministry to the country's Institute of Hydrology, Meteorology and Environmental Studies.

However, a lawsuit was filed by Colombia's Indigenous communities, arguing that the shift in Renare's administration was not done properly.

As a result, a ruling by the country's Council of State, the highest court of administrative matters and an advisory body to the government, in September 2022 ordered a temporary suspension of the registry.

The current administration has attempted to solve the issue but has not yet defined which entity will be in charge of administrating the registry.