May 26, 2024

COP27: EnergyAlliance, SEforALL, UN Economic Commission for Africa launch billion-dollar Africa Carbon Markets Initiative

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Oredola Adeola

Africa Carbon Markets Initiative (ACMI), has been officially launched with the commitment by the 14-member steering committee of African leaders, Chief Executive Officers(CEOs), and carbon credit experts, to dramatically expand Africa’s participation in voluntary billion-dollars carbon markets.

The African Carbon market was launched in Egypt, on Tuesday, at the ongoing COP 27, in collaboration with the Global Energy Alliance for People and Planet (GEAPP), Sustainable Energy for All (SEforALL), and the UN Economic Commission for Africa, with the support of the UN Climate Change High-Level Champions, including Mahmoud Mohieldin and Nigel Topping.

EnergyDay had earlier published a report announcing the confirmation of Vice President, Prof. Yemi Osinbajo, Dr. Akinwumi A. Adesina, President of the African Development Bank Group, Damilola Ogunbiyi, Chief Executive Officer, UN Sustainable Energy for All (SEforALL, as members of the fourteen-member steering committee of the African Carbon Markets Initiative.

The Africa Carbon Markets Initiative (ACMI), the new and innovative Climate Change solution, is expected to pioneer a voluntary billion-dollar worth carbon market on the continent and also create millions of new jobs in Nigeria alone, over the period of energy transition.

Meanwhile, EnergyDay’s check showed that despite the incredible opportunity that carbon markets offer, African countries were only issued  only 15%  out of over $700m total credits released from 2016 to 2021.

The continent has been projected to increase its carbon credit potential with the formation of the ACMI. A recent estimate showed that Africa could generate $50bn per year, from at least 1.5 – 2.5 Gt of CO2e annually at USD20/tonne CO2.

UN Global Crisis Response Group’s 3rd Brief on Energy highlights the opportunity for carbon markets to provide the necessary financing to overcome issues related to the high upfront costs of clean energy projects.

ACMI at the launch in COP27, announced a bold ambition for the continent, to reach 300 million credits produced annually by 2030. This carbon production commitment is likely to unlock six billion in income and support 30 million jobs.
By 2050, ACMI is targeting over 1.5 billion credits produced annually in Africa, leveraging over $120 billion and supporting over 110 million jobs.

Damilola Ogunbiyi, Chief Executive Officer, UN-based Sustainable Energy for All (SEforALL)/Co-Chair of UN-Energy, in her remark in Egypt said, “The current scale of financing available for Africa’s energy transition is nowhere close to what is required. Achieving the Africa Carbon Markets Initiative targets will provide much-needed financing that will be transformative for the continent.”

Gillian Caldwell, USAID Chief Climate Officer said, “The African voluntary carbon market will only succeed if people trust that African credits are driving real climate action and having a positive human impact. As the VCM scales in Africa, USAID and ACMI will ensure that it does so with integrity as a core pillar.”

EnergyDay gathered that the ACMI is collaborating with global integrity initiatives like the Integrity Council for the Voluntary Carbon Market (IC-VCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI), as well as other regional carbon market platforms, as part of measure to stimulate the production of high-integrity credits for the continent.

The steering committee of ACMI released Africa Carbon Markets Initiative, Roadmap report: Harnessing carbon markets for Africa at the initiative’s COP 27 launch event.

The report identifies 13 action programs to support the growth of voluntary carbon markets (VCMs) on the continent.

Although voluntary carbon markets are already growing at a rapid rate, EnergyDay gathered that the remittance of African credits has grown by an average of 36% annually over the past five years.

Experts have called for aggressive action by member countries and the steering committee, with a view to maintaining the level of growth already garnered over the new few years.

Nigeria and other African countries have made commitment to collaborating with ACMI to scale carbon credit production via voluntary carbon market activation plans.

Professor Osinbajo in a recent statement ahead of COP27 said, “On the journey to net zero emissions, the Federal Government is pioneering a voluntary billion dollars’ worth Carbon Market on the continent, a new and innovative Climate Change solution which will create, over the period of the energy transition, millions of new jobs in Nigeria alone, according to estimates of international experts.

“ACMI estimates suggest that Nigeria alone could produce up to 30 million carbon credits per year by 2030, which at $20/credit would be worth over half a billion dollars annually. At this level of production, the industry could potentially support over 3 million Nigerian jobs. And Nigeria has only a portion of Africa’s total potential—the impact on the continent as a whole could be far greater,” the VP said.

Osinbajo disclosed that Nigeria has through the recent launch of its Energy Transition Plan(ETP) unveiled a strategy outlining how it intends to achieve the global net zero emissions target by 2060 while also eliminating energy poverty.

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