PESHAWAR: The Khyber Pakhtunkhwa province`s forest sector has the potential to earn around Rs32 billion ($113.1 million) from the carbon market annually due to its capacity to sell 11.8 million carbon credits, show official documents.

The forest department`s documents said carbon credits were tradable certificates, which could be used by companies, governments and businesses to offset their emissions.

According to them, one metric ton of CO2 equivalent (CO2eg) removedfrom the atmosphere or avoided from releasing into the atmosphere is called one carbon credit and carbon credits are traded through the voluntary carbon market or compliance market. The potential of the capabilities to earn such a huge amount surfaced in the recent feasibility study conducted by the forest department that has divided carbon credits into three categories along with the potential and its worth.

The documents said Khyber Pakhtunkhwa had the capacity to earn $19.14 million by marketing 0.84 million carbon credits through afforestation, reforestation and revegetation (ARR) on 66,496-hectare area.

The ARR refers to new plantations in barren areas, while the established plantations, which are less than three years old, are also `eligible` under ARR.

This is the most common type of forestry projects and is in highdemand in the carbon market. It fetches the highest price for the credits generated from this type of activity, according to the official documents.

They revealed that the province has the potential to sell 9.3 million carbon credits at $85 million through bringing improvement in the forest management over two million hectares of land. The third category is reducing emissions from deforestation and degradation (REDD), which can earn another $8.65 million to sell 1.7 million carbon credits for avoiding the unplanned deforestation and degradation over 109,519 hectares of land.

Director (Forestry Research) at the Pakistan Forest Institute Dr Anwar Ali told Dawn that the province would sell carbon credits for 48 years after the completion of the process for its registration and certification.

He said the marketing of carboncredits was a complex process and required upfront costs for which the forest department would hire private parties or organisations to pursue its case and help the department market carbon credits.

Secretary of the forest and climate change department Shahid Zaman said the province had 70,000-hectare potential area, which was barren and good for fresh plantation to be done after reaching agreement with private investors and partners.

He said that most of the potential land for plantation was located in the southern and merged tribal districts of the province.

`The new plantation will further increase the forest cover in the province, which currently stands at 27 per cent of the province,` he said.

Mr Zaman said the other benefits of the forest carbon projects included improved environment, production of timber and non-timber products forlocals and provision of the best possible environment for wildlife.

According to documents of the forest department, the voluntary carbon market is operated by private organisations without the involvement of United Nations Framework Convention on Climate Change, Paris Agreement, or the governments` supervision. It enables private investors, governments, NGOs and businesses to voluntarily purchase carbon credits to offset their emissions.

The value of VCM reached $2 billion in 2021-22 and $1 billion in 2024 and could go up to $40 billion by 2050.

Many international companies like Microsoft, Google and Apple, aviation industries, hotel chains, multinational corporations and industries are the major buyers in the VCM.

The official documents show that carbon credits are issued, monitored and verified according to stringent, internationally-recognised standardsand allow businesses to compensate for their unavoided emissions reliably and transparently.

According to them, KP has made substantial green investments in the last 10 years, with the forest cover increasing by six per cent through the implementation of the Billion Trees Afforestation Project and Ten Billion Trees Tsunami Programme.

The documents also revealed that the coverage of protected areas and national parks in the province had gone up from 10 per cent to 17 per cent. The Billion Trees Plus project is the new ADP scheme to be implemented in the province.

According to the documents, all these efforts have increased the sequestration potential, the capacity of natural or artificial systems to capture and store carbon dioxide, to 11 million tonnes annually, while the potential could further increase by bringing more area under plantation.