AN additional 519 590 carbon credits valued at US$3,39 million were issued over a five-month period until August, with Zimbabwe losing out on US$871 408,91 worth of credits that have been retired, it has been established.
In August, according to the world’s leading carbon credits database, the American-based Voluntary Registry Offsets Database (VROD) revealed that as of March 3, this year, approximately 30 774 099 carbon credits had been issued.
Of this amount, only 8 908 880 were active, with the remaining 21 865 219 having been retired.
The issuance of these credits was from 26 carbon credit projects in Zimbabwe.
However, in VROD’s new update as of August 31, 2024, approximately 31 293 689 carbon credits had been issued from 27 projects in Zimbabwe, adding 519 590 to the March total.
From the 31 293 689 carbon credits, only 9 295 023 were active, with the rest having been retired, according to VROD.
That means out of the 519 590 carbon credits issued between March and August, 133 447 were retired and 386 143 remain active.
From the retired carbon credits, these are valued at US$871 408,91.
- Zim eligible for carbon credits: ED
- New perspective: Carbon credits, voluntary carbon markets in Zim
- Zim earmarks incentives for carbon credits
- Understanding carbon credits (II)
Keep Reading
This is because German online statistics platform, Statista, reported that the average price of the voluntary carbon market (VCM) credits was US$6,53 last year.
The government is working on actualising the carbon credits legislation so that the country does not lose out on the carbon credits, which is currently the case as confirmed by Ministry of Environment, Water and Climate, Climate Change Management director Washington Zhakata.
“Since the issuing of SI (Statutory Instrument) 150 of 2023 there has been an increase in the number of players and prospective project developers as well an increased interest in the climate economy although there was a stalling on the part of those who had projects that had been developed and were at various stages,” Africa Voluntary Carbon Credits Market Forum founder and executive director Anglistone Sibanda said.
“This was caused by the avalanche of negative publicity that triggered panic in the international markets scaring away investment and stalling progress on the already existing projects as government took time to come up with a framework.”
Sibanda said even after the framework came into place there were issues of capacity of the Designated National Authority (DNA) that was tasked with the mandate for registration of projects.
Under SI 150 of 2023 Carbon Credits Trading (General) Regulations, it provides for the control and management of carbon credit trading projects.
Under this law, a DNA was supposed to be established within Treasury’s Climate Change Management Department to promote the usage of carbon credits in the market.
However, to participate in the VCM, one must write a letter of intent to the DNA to develop a carbon credit project accompanied by Project Idea Note.
The lack of capacity, therefore, means carbon credit trading cannot be tracked and the country cannot make any returns from it.
“Then there was big contention around the share of profits from carbon credits projects where government demanded 30% of the profits,” Sibanda said.
“This argument is fair on forests and land-based credits because in Zimbabwe land belongs to the state.
“However, this assumption on the part of government created a big challenge on the rest of projects and still remains an issue that needs to be resolved as it scares away investors and creates volatility in the space.
“Some carbon credits projects are capital intensive and have nothing to do with state land or forests and as such it makes business sense to review the benefit sharing and treat carbon business like any other business that pay taxes to government.”
He said the government could develop its own national carbon projects using its own natural resources, which must, as a way forward, be listed as national assets under the Mutapa Investment Fund.
“If anything, government simply needs to formulate regulations to ensure that money acquired through the sale of carbon credits is brought into the country’s banking system and taxes due are paid,” Sibanda added.
