Tanzania to Receive Over $20 Billion Investment in Carbon Offset Credits from Global Companies
The voluntary carbon market in Africa is gaining momentum, with Tanzania announcing that it will receive a substantial investment of over $20 billion in carbon offset credits from more than 20 companies. This significant investment comes after the adoption of legislation on carbon trading in Tanzania last year, which brought in over $1 billion in investment. The funds will be used to support carbon trading activities across the country, helping Tanzania achieve its Nationally Determined Contributions (NDCs) goal of reducing greenhouse gas (GHG) emissions by 30% – 35% by 2030.
Dr. Selemani Jafo, the Minister of State in the Vice President’s Office, Union and Environment, emphasized the importance of establishing further cooperation between Tanzania and carbon credit investors and partners. He stated, “We are committed to supporting all investors and stakeholders in carbon trading in our country for the benefit of our economy and future generations.”
Carbon credits are market-based financial instruments that represent a reduction in carbon emissions certified by independent international bodies or governments. As businesses and organizations seek ways to reduce their CO2 emissions, carbon credit markets offer a viable solution. These credits are generated from various projects or initiatives that aim to reduce greenhouse gas emissions. In Tanzania, carbon credits play a crucial role in preserving forests and protecting the livelihoods of local communities. The carbon market presents an opportunity for the country to generate funds and address deforestation and forest degradation.
Tanzania is home to 48 million hectares of reserved forests, providing significant opportunities for carbon trading. With the $20+ billion investment, the carbon market in Tanzania is set to experience a revolution. Each carbon credit is equivalent to one metric ton of CO2 reduction or removal. The 20 companies that have committed to investing in carbon credit projects in Tanzania come from countries such as the U.S., Canada, Switzerland, Russia, Italy, Singapore, Estonia, UAE, and Kenya. Their applications were received by various agencies and institutions in Tanzania. Their investment will protect reserve forests, village forests, game reserves, and community-based wildlife management areas.
Furthermore, Tanzania is working on the largest carbon credit project in Africa in partnership with the Tanzania Wildlife Management Authority and GreenCop Development PTE, a Singapore-based company. This collaboration aims to develop carbon projects in Tanzania, further enhancing the country’s position in the carbon credit market.
Africa has been attracting attention in the carbon credit market, with countries like Zimbabwe and Zambia making significant moves. Zimbabwe, the third-largest carbon credit producer in Africa, recently mandated that half of the sales go to the nation’s treasury. Zambia, the fifth-largest producer, has similar plans. Former South African president Jacob Zuma announced that the Belarus African Foreign Trade Association will list the first carbon credits on a newly created exchange in Zimbabwe, with 2 million credits set to trade on the African voluntary carbon market. Kenya, Africa’s largest supplier of carbon credits, is in the process of regulating its carbon market, while Malawi has established a dedicated agency to address this matter.
Governments in African developing nations are strategically positioning themselves in the emerging carbon markets. They are developing mechanisms and frameworks to ensure reliable carbon credit projects in their respective territories, attracting investors, and innovating nature-based solutions to combat climate change.
This significant investment in Tanzania’s carbon offset credits marks a crucial step towards achieving the country’s environmental goals while providing opportunities for economic growth and sustainable development.