Context
Coffee production in Costa Rica was closely linked to the country’s national identity and provided employment to up to 150,000 people during harvest. Moreover, the activity accounted for nearly 8% of national domestic production (GDP). Costa Rica was among the first countries globally to set a target to achieve carbon neutrality. Coffee production represented up to 10% of national greenhouse gas (GHG) emissions. To reduce the carbon footprint of the sector and maintain sustainable coffee production in the future, the government of Costa Rica planned to implement mitigation measures in a participatory process between 2011 and 2021.
Goals and approach to transformational change
Costa Rica’s project “Low-Carbon Coffee NAMA” involved a sector-specific approach focused on a climate-friendly transformation of the entire value chain of one of the most important economic sectors in the country. The project offered technical and policy advice to change production and processing practices in the sector, which is the source of about two percent of the country’s greenhouse gas emissions. The project focused on the efficient use of fertilisers, reduced water and energy consumption in coffee processing, support for agroforestry systems, and strategy development to promote low-carbon coffee.
Components and support mechanisms
The project supported three financial products to boost low-carbon coffee production and processing. A credit line to commercial banks for preferential loans for low-emission investments in mills and GAPs at farms (each USD 10,000 – 1 million), a subsidy for smaller technologies for farmers and millers (maximum USD 10,000 per investment) and a grant for a results-based payment scheme for the planting of shade trees. The subsidy mechanism has resulted in leveraging EUR 3.6 million due to lenders’ contributions by the end of 2021. Investments and in-kind contributions by ICAFE, MINAE, BCIE and HIVOS of EUR 2.7 million were leveraged by the end of 2021. Furthermore, the project supported feasibility studies and offers trainings to financial institutions.
Long-term impact
The project achieved mitigation by an efficient use of fertilisers, improved water management and wastewater treatment, an aerobic treatment and energetic use of pulp, improved ovens and boilers and increased use of solar drying and carbon fixation due to the planting of shade trees.
The five-year program was prolonged to a total program lifetime of seven years to extend the subsidy scheme for smaller technologies and the results-based payment scheme for the planting of shade trees.
The project intervention resulted in reduced greenhouse gas emissions (direct and indirect) amounting to 107,451 tCO2e. It directly benefitted 9,851 people. The potential for transformational change, measured by the degree to which the supported activities catalyse impacts, was rated at 3. Additionally, the project mobilised EUR 2,796,931 public finance for carbon-neutral investment and development, and EUR 5,163,130 of private finance for the same purpose.
Visit the project’s official website [available in Spanish] as well as here to learn more about it.
1Source: GHG inventory of 2005.
