Nov. 01, 2023
Sumitomo Corporation concludes Agreement on procuring carbon credits from mangrove planting in Indonesia and Memorandum on jointly exploring global carbon credit business
Carbon Credit Purchase Agreement signed with Value Network Ventures Advisory Services
Sumitomo Corporation entered into an agreement with Singapore-based Value Network Ventures Advisory Services (hereinafter, "VNV Advisory"), a company that develops carbon credit projects worldwide, on the long-term procurement of carbon credits generated from the growth of mangroves through the funding of a mangrove plantation to be developed on the island of Sumatra in Indonesia (“the Project").
In addition, a memorandum was signed with VNV Advisory to jointly explore carbon credit projects globally.
Carbon credits garnering attention as societies endeavor to become carbon-neutral
Companies and individuals have been asked in recent years to reduce their greenhouse gas emissions for the sake of achieving carbon-neutral societies by 2050. Referring in a broad sense to a mechanism that enables trading of greenhouse gas reductions/removals, “carbon credits” have garnered attention as a means of promoting decarbonization projects.
Overview of the Project
The Project will see Sumitomo Corporation together with VNV Advisory plant mangrove trees in cooperation with local NGOs and local residents to generate carbon credits (approx. 600,000 t-CO2 in total) for 20 years that will be traded by Sumitomo Corporation mainly to Japanese companies and other customers. Mangroves are an important part of social infrastructure for local residents and local communities as a means of adapting to climate change because they absorb relatively large amounts of CO2 as well as of conserving biodiversity.
Through the Project, Sumitomo Corporation will help realize decarbonized societies by generating mangrove-derived carbon credits. At the same time, Sumitomo Corporation will look to expand job opportunities for local residents and improve their livelihoods as well as to bring about sustainable society in local communities by mitigating tsunami damage and conserving biodiversity.
■Mangrove planting for the Project
Sumitomo Corporation's efforts in the field of carbon credits
Energy Innovation Initiative (EII), an internal organization established by Sumitomo Corporation in April 2021, aims to "create new businesses through the construction of decarbonized and recycling-oriented energy systems." The Carbon Solution Team pursuing the Project within EII was organized in April 2022 to pursue the decarbonization solution business centered on carbon credits across the entire company. Through efforts to encourage the development of carbon credits generated from projects that contribute to substantive greenhouse gas reductions, Sumitomo Corporation will strive to satisfy its commitment to addressing the important social issues of mitigating climate change and realizing circular economies as well as to achieving carbon-neutral societies
Company profile of VNV Advisory
|Value Network Ventures Advisory Services
|Description of business
|VNV has been at the forefront of the movement against climate change by conceptualizing, developing, and executing community-driven initiatives in the South Asian and East African landscapes. These community-led programs have impacted over 7 million rural households and cover over 3 million Hectares under land use and forestry, among other mitigation and adaptation nature-based solutions which aim to restore ownership, dignity, improve livelihoods and foster resilience of first responding communities in least developed and developing nations of the Global South.