Published by Joshua Olayori on January 25, 2022
Today, Africa makes up only about 2% of the global carbon market. With funding from the World Bank, Africa governments, and corporations, numerous environmental and power projects are being planned to bring reliable, clean energy while reducing the greenhouse gas emissions for the country. From carbon capture to sustainable soil, carbon projects are demonstrating results for the country.
There have been deliberate attempts to capture carbon and store it in geological formations that can hold it for several years or forever. Carbon Capture and Storage (CCS) is a technique for capturing carbon emissions from large point sources (coal-fired power plants, coal-to-liquid fuel plants, and power stations) and moving them to underground geological formations. The International Energy Agency estimates that by 2040, CCS will contribute to 20% of total emissions reduction.
Source: Afrik21
South Africa is set to inject large amounts of carbon dioxide deep into the ground from 2023 since it has the largest emission profile Africa. The project will be carried out in Leandra, a town in Mpumalanga Province where there is a concentration of carbon emissions. With a potential storage capacity of 150 gigatons of carbon, geological mapping has commenced at the country's first carbon capture and storage (CCS) site. Funding for the project will be from a $23 million World Bank grant. The original deadline for the World Bank grant to fund the CCS project was originally set for December 2021; however, that deadline has now been pushed out to 2023.
The budding carbon market in Africa makes up only 2% of the global carbon market. Projects from South Africa and North Africa account for the largest portion of the 2%; the projects are under the Clean Development Mechanism (CDM) which resulted from the Kyoto Protocol. The CDM allows projects cutting down carbon emissions in developing countries to earn certified emission reduction (CER) credits, each equivalent to a ton of carbon dioxide.
These credits are tradable assets that industrialized countries can purchase to meet emission reduction targets under the Kyoto Protocol. One of the CDM projects in Africa is the Itezhi-Tezhi (ITT) hydropower plant and transmission line in Zambia. The project comprises the construction, operation, and maintenance of a 120-megawatt baseload hydropower station at the Itezhi-Thezi dam on the Kafue River.
Source: Agence Francaise de Developpement
Backed by a public-private partnership, the ITT project is hinged on generating clean energy and ultimately reducing carbon emissions. The amount of emission reductions spearheaded by this project is about 590,000 metric tonnes of carbon dioxide equivalent per year.
Also active in the African carbon market is Starsight Energy, a renewable energy company in Nigeria, providing commercial and industrial solar power. Supported by Helios Investment Partners, Starsight Energy was the first renewable energy company in Nigeria to receive carbon credit accreditation. It got carbon credits after shifting its power and cooling services from majorly diesel-based electricity to a mix of solar, battery, and diesel hybrid systems. The carbon credits were accredited by the Verra Verified Carbon Standard (VCS) Program.
Over the years, Kenyan farmers have learned sustainable agricultural land management (SALM) practices that can boost their yield, improve soil fertility, and trap carbon. This is made possible by the Kenya Agricultural Carbon Project (KACP) executed by a Swedish nongovernmental organization (Vi Agroforestry) and funded by World Bank’s BioCarbon Fund, the French Development Agency, and the Syngenta Foundation for Sustainable Agriculture. One of the practices adopted by the farmers to keep carbon trapped in the ground is the use of nitrogen fertilizers. Farmers in Nyanza and Western Provinces of Kenya, working with KACP have stored 25000 tons of carbon dioxide while cultivating 45000 hectares of land. Since KACP started using carbon credits approved by VCS in 2014, the farmers have been profiting from carbon credits issued under SALM carbon accounting. The income from the trading of carbon credits is paid by the BioCarbon Fund.
Source: Climateaction.org
In 2019, the Intergovernmental Panel on Climate Change (IPCC) reported that agriculture is directly responsible for up to 8.5% of all greenhouse gas emissions, with another 14.5% majorly from deforestation in the developing world to access more land for food production. The cognizance of this reality and Ghana’s commitment to the UN Framework Convention on Climate Change prompted Ghana’s recent agreement with the World Bank. The five-year Emission Reductions Payment Agreement (ERPA) with World Bank’s Forest Carbon Partnership Facility (FCPF) Carbon Fund generates a performance-based income of up to US$50 million for carbon emission reductions from the forest and land-use sectors of Ghana.
Prior to this time, Ghanaian farmers have had to cut down trees in the forest to expand their cocoa farms. However, with a current partnership between Ghana’s Forestry Commission, Cocoa Board, and the private sector, the country is decreasing carbon emissions by promoting climate-smart cocoa production. In Ghana’s agreement with the World Bank, the FCPF Carbon Fund is obligated to make initial performance-based payments for reductions of 10 million tons of carbon emissions (up to US$50 million). Other African countries that have signed the ERPA are Mozambique and the Democratic Republic of Congo.
Although there is a lingering difficulty in running businesses in Africa, all stakeholders must be aware of the potential of Africa in the global carbon market. With increased investment in clean energy, the architecture of considerate legal frameworks, proper regulatory systems, maximization of other sources of finance, and more funding for carbon-cutting projects, Africa’s carbon market is poised to expand exponentially.
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