Posted on :Thursday , 3rd August 2023
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 US$ 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 US$ 1 billion (Sh2.3 trillion), which will be mobilised annually through carbon trading across the nation.
He was speaking on 15th July 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 countryâ€™s Nationally Determined Contributions (NDCs), which targets reducing 30-35% 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.
â€œWe have already entered into a MoU with some companies, and talks with others under the coordination of the National Carbon Monitoring Centre, are in progress.â€
She said that the companies are set to invest in the central governmentâ€™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.
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% 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.