Decree No. 37.926/MINAE approves guidelines for regulating and operating the domestic carbon market, aiming to establish and define requirements for Costa Rica's Domestic Carbon Market [Mercado Doméstico de Carbono (MDC)].
This market serves as a tool to support the country's efforts towards achieving carbon neutrality goals by facilitating the commercialisation of carbon credits generated from projects or activities aimed at reducing greenhouse gas emissions. The MDC operates as a voluntary mechanism for generating carbon credits at the local level through Costa Rican Compensation Units [Unidades Costarricenses de Compensación (UCC)].
Project Types:
- Independent projects: For sectors without a registered protocol or developers opting out of protocol participation, projects can be independently registered using an approved or accepted methodology by the MDC.
- Project protocol for national interest activities: In sectors of national interest, the Carbon Board, based on an approved or accepted methodology by the MDC, collaborates with other public or private institutions as deemed necessary to design and register a protocol for projects.
The decree includes the sector that are considered to generate UCC, among these are:
- Forestry: Reforestation, forest management, and forest conservation.
- Energy: New renewable energy sources and energy efficiency on the demand side.
- Other Sectors: UCCs from other sectors can be assessed by the Carbon Board through the development of methodologies and protocols, including calculation and sizing effects of the market, and scenarios demonstrating the quality and competitiveness of UCCs against designated sectors.
Further Considerations:
- A project registry is established to record basic data of each project participating in the MDC, necessary for project and UCC traceability, managed by the Technical Secretariat.
- To mitigate risks associated with Protocol-Embedded Activities (PEA), a reserve account managed by the Carbon Board or the protocol developer, authorised by the Carbon Board, is created. It retains a predetermined percentage of UCCs from each activity to cover performance risks, leakage, or other environmental integrity considerations.
- Carbon experts [peritos de carbono] are responsible for validating projects for inclusion in the MDC, as well as verifying project implementation and monitoring plans. To be accredited by the MDC, professionals must demonstrate expertise in fields related to the project type, and pass the corresponding carbon expert training course.
