LOCAL industries should find innovative ways to reduce carbon emissions in their production chains in order to compete on the global scale, Finance, Economic Development and Investment Promotion minister Mthuli Ncube has said.

His remarks come at a time the European Commission is set to introduce the carbon border adjustment mechanism (CBAM) starting in 2026, which will be used to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the European Union (EU).

This CBAM regime aims to ensure the carbon price of imports is equivalent to the carbon price of domestic production. This ensures that the EU's climate objectives are not undermined through confirming that the price has been paid for embedded carbon emissions generated in the production of certain goods imported into the EU.

This is an innovation aimed at fostering green industrialisation and consequently affecting trade.

“Hence, in 2026 for any company to export into the EU zone, (it) should have a licence and a record of how the goods were produced, including how carbon was emitted. Companies will pay penalties just to export,” Ncube said this week during the International Business Conference, which ran along the Zimbabwe International Trade Fair in Bulawayo.

“This calls for our local industries to find innovative ways to reduce carbon emissions in their production chains in order to compete on the global scale.”

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The minister said Africa had enormous potential for development of renewable energy sources, particularly solar and wind.

“The continent is endowed with some of the best solar resources in the world and there is excellent wind resources, particularly along its coastline. I spent a lot of time developing all manner of technologies for increasing the energy supply,” he told the conference.

“But then in the end, we figured out that the best way to help was just to invest in solar energy. So right now, the country could easily achieve an 80% supply of electricity from solar energy and wind energy,” the minister added.

In essence, Ncube said developing renewable energy sources in Africa could help to reduce the continent's reliance on fossil fuels and reduce carbon emissions, as well as creating new opportunities for economic development, job creation, and poverty reduction.

As part of the United Nations Framework Convention on Climate Change, Ncube said the country sought to contribute to the ambitious global mitigation goals as agreed under the Paris Agreement.

“(For) Zimbabwe's low emission development strategy, we do have a strategy, which covers the period 2020 to 2050. This actually sets the costs for reducing emissions, while at the same time ensuring sustainable socio-economic development for the country,” he said.

“The strategy is based on the government's economic planning and covers mitigation measures across four key sectors of energy.

“For instance, viability gap funding is one such instrument aimed to increase electricity access, coined by the government in the national renewable energy policy.

“As a country, we have committed to reducing green investment into the infrastructure planning and delivery process. In addition, a disaster risk financing facility has been established with support from the African Capacity Building Foundation to enhance preparedness and responsiveness to climate related impacts,” Ncube said.

The Treasury boss also noted that climate finance has been mobilised through a programmatic partnership between the joint sustainable development goal fund and local stakeholders with a four-year programme.

Ncube pointed out that climate finance helps countries to reduce greenhouse gases. This can be by funding renewable power  systems like wind, solar and hydro.

It also helps communities adapt to climate change impacts.