Azerbaijan Railways preparing to enter carbon credit market with ADB support

The Asian Development Bank (ADB) has announced two tenders under the Azerbaijan Railway Company Decarbonization Project, Report informs referring to the ADB.

The total consulting budget for the projects is $125,000.

According to the bank, Azerbaijan Railway Company (ADY) has undertaken several decarbonization actions including railway electrification, converting from direct current to alternating current for traction (motive power), rooftop solar installations (photovoltaic and thermal), switching to light-emitting diodes, comprehensive waste management, and railway digitalization.

Furthermore, the ADY seeks to improve its operational efficiency by identifying and implementing renewable energy (RE) and energy efficiency (EE) measures across its infrastructure and operations.

To this end, ADB has announced a second tender for a qualified energy efficiency expert who will assess the potential for energy efficiency improvement and prepare practical recommendations.

The objective of this assignment is to conduct a comprehensive assessment of ADY's energy use and operation practices, identify opportunities for EE improvements across railway operations, infrastructure, and rolling stock, develop a set of prioritized cost-effective recommendations and a roadmap for implementation of EE measures with specific milestones.

As part of another tender, the consultant will carry out tasks aimed at ensuring ADY's successful entry into carbon credit markets, ensuring compliance with international standards, and monetizing carbon units.

ADY seeks to develop a corporate level carbon trading desk aligned with international carbon market mechanisms to monetize carbon credit and contribute to global emission reduction goals. The system will encompass carbon footprint assessment, compliance with carbon market regulations, and strategies for carbon credit trading.

Along with the decarbonization investments, ADY intends to assess potential entry points to access carbon market that will create a monetary incentive for it to reduce its carbon emissions. The objective of this assignment is to support ADY in developing a robust carbon credit monetization strategy, maximizing carbon credit value, and identifying strategic trading opportunities generated from ADY's investments and activities following the international guidelines on carbon trading between countries to meet targets agreed during COP29.

Azerbaijan has been a member of the ADB since 1999. During this period, the bank has provided the country with over $5 billion in loans, including $1.5 billion for transport projects and $1.7 billion for energy initiatives.

The Asian Development Bank was founded in 1966 and is headquartered in Manila, Philippines. Its members include 69 countries, 50 of which are located in the Asia-Pacific region.