Carbon markets: Players support emissions trade

Stakeholders in the energy sector have called for adequate support towards concretising Uganda’s place in global carbon trade.

The call was made during a meeting with MPs on the Climate Change Committee on Thursday.

Carbon trade, also known as emissions trading, is a market-based approach that allows countries or organisations to buy and sell carbon credits. A carbon credit is a unit that represents one tonne of greenhouse gas emissions avoided, reduced, or removed from the environment that can be traded to generate revenue.

Ms Beatrice Anywar, the junior Environment minister, while meeting the House committee on Climate Change on July 20, disclosed that Uganda has collaborated with a number of institutions and actors in carbon markets. She added that the country is one of the carbon market frontrunners in Africa, with nearly 30.6 million tonnes of carbon credits issued under the Clean Development Mechanism and Voluntary Carbon Market standards.

“Government has ratified the Paris Agreement and developed a climate action plan known as Nationally Determined Contributions. In 2022, the government committed to reduce emissions by 5.9 percent below business-as-usual levels in 2030,” Ms Anywar said.

She added that the government will explore a non-greenhouse gas policy to improve support for carbon market participation. Some of the measures to be included in the policy include the national target to increase renewable energy access from the current 51 percent to 100 percent by 2040 for electricity access and 15 percent to 50 percent for clean cooking.

“International carbon markets are some of the sources of financing, which can also be used for adaptation and mitigation efforts,” Ms Anywar said, adding, “Government is strengthening the enabling environment by developing regulations and enhancing capacity development to harness available opportunities.”

Ms Irene Bateebe, the Energy ministry’s permanent secretary, said there is a steady growth in demand for global carbon credits. This, she added, is attributed to a growing number of businesses and corporate net-zero commitments.

Ms Bateebe, however, observed that the carbon markets ecosystem in Uganda is fragmented with mostly small-scale projects that offer minimal opportunity diversification.

“Through the Climate Finance Unit, the ministry will diversify and scale-up Uganda’s carbon trade project portfolio, develop national policies, regulations and guidelines and build validation and verification capacity,” she said, adding that nearly eight million credits were issued between 2012 and 2020 from projects developed under the Clean Development Mechanism like Bujagali Hydropower Project and West Nile Electrification Project.