A presentation from the International Emissions Trading Association (IETA) at the annual African Petroleum Refiners and Distributors Association (ARDA) 2023 conference, has shown a path for the development of carbon credit markets on the continent.
Andrea Abrahams, Managing Director, Voluntary Carbon Markets at IETA, talked about both the challenges and opportunities that carbon credits present for oil and gas companies in Africa.
“With such a growing energy demand, the growth potential for the carbon credits market in Africa is acute, considering the continent has to achieve both energy security and emissions reductions,” she said.
Abrahams stressed on the necessity for state level implementation of emission reduction training and the development of pricing schemes. Awareness for both public and private companies is also necessary, so that both sides can interact and enhance the industry.
The presentation shed light on the current state of affairs for the voluntary carbon market (VCM) in Africa with Abrahams saying “VCM is unregulated and presents an opportunity for Africa to implement carbon emissions reductions projects without a lot of national or global policy interventions. VCM is bringing finance from the private sector into African countries, which would otherwise not be there and helping fill a market void with more African countries participating in the sector than in the compliance market.”
According to Abrahams, there are up to ten African countries already actively engaged with VCM projects. Simultaneously Kenya, Ghana, Ethiopia, Malawi, Tanzania and Mozambique are working on other carbon reductions mechanisms that could transform into equivalents of compliance markets found in the U.S. and Europe.
She also highlighted partnerships between countries as a potential pathway for African carbon credit utilization. Ghana and Switzerland already have an agreement for buying and selling emission reduction allowances, as part of the Paris Agreement.