Carbon offsets are intended to mitigate the effects of climate change, and Tanzania is on the verge of a new age, one in which the carbon market can provide major benefits to the environment, local people, and the National Treasury.
Producing and selling carbon offsets is finally becoming a lucrative business in Tanzania, with the government reported to have attracted over 20 companies that are set to invest over $20 billion (Sh46.9 trillion).
Minister of State in the Vice President’s Office (Union and Environment), Dr Selemani Jafo, said since the regulations and guidelines on carbon trading were adopted last October the investment has attracted more than $1 billion (Sh2.3 trillion), which will be mobilised annually through carbon trading across the nation.
He was speaking yesterday during the High-level Inter-Ministerial Dialogue on Carbon Trading in Tanzania, organised by the Tanzania Private Sector Foundation (TPSF).
While carbon offsets are meant to address climate change effects, Tanzania stands at the threshold of a new era, one in which the carbon market can yield significant benefits for the environment, local communities, and the National Treasury.
One carbon offset, which is equal to one metric ton of carbon or other greenhouse gas (GHG), is sold at $65 (about Sh152,100).
Dr Jafo said carbon trading will contribute to the country’s Nationally Determined Contributions (NDCs), which targets reducing 30-35 percent of GHG emissions by 2030.
“We need to establish further cooperation between Tanzania and carbon credit investors and partners for our economy and future generations,” said Dr Jafo.
“We are committed to supporting all investors and stakeholders in carbon trading in our country.”
Deputy minister for Natural Resources and Tourism Mary Masanja said the applications of over 20 companies had been received by the Tanzania Forest Service Agency (TFS), Tanzania Wildlife Management Authority (Tawa), Tanzania National Parks Authority (Tanapa) and Ngorongoro Conservation Area Authority (NCAA).
The investors, said Ms Masanja, are from Kenya, Russia, Singapore, USA, Canada, United Arab Emirates (UAE), Switzerland, Estonia and Italy.
“We have already entered into a Memorandum of Understanding with some companies, and talks with others under the coordination of the National Carbon Monitoring Centre, are in progress.”
She said that the companies are set to invest in the central government’s reserve forests, village forests, tree planting programmes community-based wildlife management areas, and game reserves, among others.
Ms Masanja said Tanzania has 48 million hectares of reserved forests, which is an opportunity for the carbon trade.
“With the introduction of the carbon trade regulations, we are optimistic that citizens will stop cutting down trees, and instead capitalise on the available potential,” underscored Ms Masanja.
TPSF executive director Raphael Maganga said that in this era of rapid global transformation, it is crucial for Tanzania to position itself strategically in the carbon market.
“With over 51 percent of the land covered with forests, Tanzania has a unique opportunity to capitalize on our rich natural resources,” said Mr Maganga.
“We need to embrace renewable energy solutions and implement environmentally friendly projects that will attract investment, create jobs and contribute to our economic growth.”
Mr Maganga said if Tanzania is to attract more investors in carbon trading, it is imperative that it does not deter potential investors with excessive fees and bureaucratic hurdles.
“Instead, let us focus on maintaining a simple and attractive regulatory framework as per the blueprint that positions Tanzania as the most favourable investment destination for the nascent carbon industry,” he recommended.
“Simplifying and streamlining regulations is key to attracting both foreign and domestic investors.”
“By trading carbon credits, we have the potential to foster innovative solutions, encourage technological advancements, and protect our planet for future generations,” said Mr Maganga.
“And as the Tanzania private sector, we have a Call to Action, we must act now.
Tanzania Investment Centre (TIC) principal investment officer Nestory Kissima said the government was set to prepare a special package for carbon trading.
“Carbon trading is of paramount importance. You cannot take it lightly,” asserted Mr Kissima.
Reports have it that the value of the global carbon market soared 13.5 percent in 2022 to a record high of 865 billion euros.
This growth was mainly due to an increased demand for carbon permits, which culminated in surging prices.
