The outlook for carbon trading in Africa has been given a boost following the first sale of carbon credits involving two West African counterparts.

The recent deal between carbon finance group Ecosur Afrique and regional vehicle rental company Voltacars Rental Services (VRS) will see the company offer its clients the option of offsetting the CO2 emissions of vehicles leased in Ghana, Ivory Coast and Senegal with carbon credits generated by clean cookstove projects in the Ivory Coast. This energy efficient programme is saving CO2 emissions by reducing the consumption of charcoal for cooking.

It is part of Ecosur Afrique’s effort to foster the deployment of green technologies in Africa using revenues from carbon credits generated under the Kyoto Protocol’s Clean Development Mechanism (CDM).

"The exchange of carbon credits traditionally involves their transfer from developing countries to industrialised countries. We are convinced that the future of the market lies partly in the development of South-South transactions, particularly within Africa, said Fabrice Le Saché, Chief Executive of Ecosur Afrique. “Economies are booming, CO2 regulations are emerging, and local corporates are beginning to understand the business opportunities that can arise from actions that address climate change."

Carbon credits, or certified emission reductions (CERs), are earned from projects that reduce greenhouse gas emissions, each credit equivalent to one tonne of CO2. These CERs can be traded and sold to users that need them to help meet an emissions limitation target, or that are seeking to reduce their emissions on a voluntary basis, which is the case with Voltacars.

Voluntary purchases are made by companies implementing a Corporate and Socially Responsible (CSR) strategy and who may be willing to offer their clients the opportunity to grow their business or heighten their reputation by taking action that benefits the environment.

While the CDM has led to the registration of over 7.500 projects worldwide, only 3% of these are in Africa, and only 1% of CERs are issued from Africa, a statistic that Ecosur Afrique wants to change. It is focused on developing an intra-African flow of carbon credits by building demand for CERs from African corporates such as hotels chains and airlines, who can invite their customers to cancel the emissions they generate.  

The outlook for further South-South deals is promising. In 2016, South Africa will have its own CO2 allowance scheme, and it is likely that more and more companies in Africa will build compliance regimes. “With more than 40 projects in 17 countries, we now have a large portfolio of African carbon credits in terms of volume and diversity,” said Mr. Le Sache. “The challenge now is to increase and expand the demand.”

Clean cookstoves feature prominently among CDM registered projects. Aside from preventing CO2 emissions and reducing deforestation, they bring a range of benefits to local people, including reduced exposure to indoor air pollution from cooking over open fires.

See also: cdm.unfccc.int
Twitter: @UN_CarbonMechs
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Photo by Aurélie Lepage for Ecosur Afrique