LONDON, Jan 29 (Reuters) – A plan backed by global energy trader Trafigura to restore African woodlands has picked its first four carbon removal projects and aims to invest at least $1 billion over their 40-year lifetime, its carbon trading chief told Reuters.
Part of the Miombo Restoration Alliance, a public-private initiative engaged with 11 central and southern African governments, the projects cover 675,000 hectares and aim to restore woodlands that would remove over 50 million tons of climate-damaging gases.
Launched at New York Climate Week 2024, the alliance aims to restore Miombo woodlands, an ecosystem which supports over 300 million people but faces challenges including deforestation, climate change and unsustainable land use.
Countries across the Global South are increasingly keen to develop their local carbon markets and sell credits to fund protection of the environment and their transition to a low-carbon economy as official aid from richer countries declines.
The non-profit organizations International Conservation Caucus Foundation and Conservation International will convene participants and help develop the projects. Trafigura will be the main financial backer but hopes to bring in other partners.
“We really see the carbon markets as critical, as being able to channel private sector capital in a way that makes these projects long-term and sustainable,” Hannah Hauman, Head of Carbon Trading at Trafigura told Reuters.
HIGH-QUALITY CREDITS
As well as contributing to the costs of setting up and investing in the projects, 100,000 community members, farmers and the governments of Mozambique, Zambia, Tanzania and Malawi will also take part in revenue-sharing agreements which will vary from 10-60% depending on the nature of the project, she said.
The projects include a restoration project in Malawi totalling over 550,000 hectares that has one of the largest native species nurseries in Africa, and an agroforestry plan to restore degraded land in Zambia that will benefit 45,000 farmers, Trafigura said.
While the price paid for the credits will vary, all are likely to be considered high-quality and could be bought by countries or companies to help meet their climate targets. Similar credits have sold for above $50 per ton of carbon, which would equate to at least $2.5 billion across the four projects.
Hauman said Trafigura would help sell the credits, which should eventually also come from projects across other countries involved in the alliance, including Angola, Botswana, Namibia, Zimbabwe, Congo Republic, the Democratic Republic of Congo and South Africa.
(Reporting by Susanna Twidale and Simon Jessop; Editing by Aidan Lewis)
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