Azerbaijan Achieves Historic Milestone With First Int'l Carbon Credits For Hydropower

A historic milestone has been achieved in Azerbaijan's energy sector. The Hydro-3 project, covering the“Mirik” and“Qaraqışlaq” small hydropower plants in Lachin district, developed through a partnership between SOCAR Trading and AzərEnerji JSC, has successfully entered the international carbon market.

As reported by AzerNEWS, the project was registered on May 28, 2025, by Gold Standard, one of the world's leading carbon certification bodies, and the carbon credits for the Hydro-3 project were officially issued on January 28, 2026.

These carbon credits represent the first internationally recognized credits for renewable energy in Azerbaijan. Covering the period from April 2024 to August 2025, the project generated a total of 10,745 carbon units, demonstrating a measurable and verifiable contribution to greenhouse gas reduction.

This achievement underscores the successful implementation of Azerbaijan's green energy strategy and highlights the internationally recognized renewable energy potential of the Garabagh region.

What is a carbon credit, and why does it matter for Azerbaijan?

A carbon credit represents the reduction, avoidance, or removal of one ton of CO2 from the atmosphere and can be traded internationally. They are generated by projects such as renewable energy production, energy efficiency improvements, or reforestation, and are verified by international standards like Gold Standard.

Carbon credits allow companies or countries to offset their emissions while creating financial incentives for green projects. For Azerbaijan, carbon credits are particularly important because they promote renewable energy development, generate international revenue, support the energy transition, and highlight the country's commitment to climate action.

Projects like Hidro-3 in Lachin show how small hydropower plants can reduce emissions, earn credits, and demonstrate the untapped renewable energy potential of regions like Garabagh, making green energy investments both environmentally and economically valuable.

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