A new partnership was launched Nov. 8 at the UN Climate Change Conference in Egypt to drive growth in carbon markets in Africa.
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Register NowThe Africa Carbon Markets Initiative -- led by a 13-member steering committee of African leaders, CEOs and carbon credit experts -- aims to support the growth of carbon credit production and create jobs in Africa.
"ACMI announced a bold ambition for the continent -- to reach 300 million credits produced annually by 2030. This level of production would unlock $6 billion in income and support 30 million jobs," the group said in a statement.
The value of the voluntary carbon market quadrupled to just under $2 billion in 2021 and is widely expected to grow by a factor of at least 15 by 2030 as governments and companies seek to use offsets to help achieve net-zero emissions targets.
Platts assessed nature-based carbon credit prices at $6.15/mtCO2e at the close Nov. 7, down from $6.45/mtCO2e Nov. 4, according to price data published by S&P Global Commodity Insights. That compares with an all-time high of $16.01/mtCO2e on Jan. 21.
The new partnership aims to harness Africa's largely untapped potential to contribute to the supply of carbon credits while unlocking billions in revenue.
The initiative was inaugurated at the COP27 climate summit in Sharm El-Sheikh in collaboration with The Global Energy Alliance for People and Planet, Sustainable Energy for All, and the UN Economic Commission for Africa.
The ACMI is also collaborating with global initiatives like the Integrity Council for the Voluntary Carbon Market and the Voluntary Carbon Markets Integrity Initiative, as well as other regional carbon market platforms, it said.
'Transformative' for Africa
"The current scale of financing available for Africa's energy transition is nowhere close to what is required," said Damilola Ogunbiyi, CEO of Sustainable Energy for All.
"Achieving the Africa Carbon Markets Initiative targets will provide much-needed financing that will be transformative for the continent," she said in the statement.
The ACMI is committed to supporting high-integrity carbon credits where an equitable and transparent distribution of revenue goes to communities, the group said.
Several African nations including Kenya, Malawi, Gabon, Nigeria and Togo shared their commitment to collaborating with the ACMI to scale carbon credit production via voluntary carbon market activation plans, it said.
"Together these countries have a maximum potential to generate 300+ million mtCO2e. Even capturing 25% of this potential, 75 million mtCO2e would be double the total credits issued across the entire continent in 2021," the group said.
ACMI is working with major carbon credit buyers and financiers, such as Exchange Trading Group, Nando's, and Standard Chartered, to set up an advance market commitment for hundreds of millions of dollars for high-integrity African carbon credits.
For example, mobilizing $500 million, at an average price of $10 per carbon credit, could support the development and delivery of at least 50 million mtCO2e, which is equivalent to the total credits retired from Africa from 2010 through 2020, it said.
The group intends to send a strong demand signal for carbon credits across all project types, especially those where Africa has untapped potential. These include nature-based solutions, renewable energy projects, cookstoves and others, it said.
