Price fall affects carbon credit projects as investors back off

HENRY LYIMO in Dodoma

The Minister of State in the Vice-President’s Office (Union and Environment), Mr January Makamba,

SOME carbon credit projects are not taking off after prospective investors backed off due to a global price fall in carbon market, the government has said.

The Minister of State in the Vice-President’s Office (Union and Environment), Mr January Makamba, said in Parliament here that there were no progress in some of the projects designed to offset greenhouse emissions due to a global slump of carbon dioxide to less than one US dollar per tonne of carbon dioxide from about 20 US dollars.

Presenting budget estimates for his ministry for the 2016/2017 financial year, the minister said low carbon prices have been triggered by a failure to reach an adequate agreement at the Copenhagen climate summit in 2009.

The projects include the Mtoni Dumpside Clean Development Mechanism (CDM) in Dar es Salaam, which was supposed to reduce about 200,000 tonnes of CO2 emissions annually through the combustion of methane contained in the biogas extracted from the dump site.

Other projects that have stalled due to global price slump in carbon market include a wind power project in Singida, a geothermal project in Matombo Village in Morogoro Region and a natural gas project for Lindi and Mtwara regions.

Lack of progress in the carbon credit projects had underlined the potential impact on low-carbon investments after failing to deliver a meaningful deal at the Copenhagen Summit, he said.

The minister said the government was optimistic that the carbon market would be revived after an agreement to reduce greenhouse gas emissions was reached at the Paris climate summit in December, last year.

He said the ministry was finalising preparation of new guidelines of running business in carbon market to make sure that the government benefitted from the market.

Mr Makamba explained that the new guidelines, to be used from the next financial year, would consider carbon mechanism, which will be used in carbon market; that is CDM, a mechanism to reduce greenhouse gas emission and deforestation and voluntary carbon markets.

He said the government has communicated with the Ministry of Natural Resources and Tourism to look at how the Forest Act and regulation could be amended to accommodate the changes and ensure the government get adequate payment in carbon market due to efforts taken to reduce greenhouse gas emission for about 50 years.

The government expects to conduct a sensitisation campaign to the public and private companies on how to benefit from carbon dioxide sales through tree planting and forest conservation.