From forests to funds: Tanzania’s Sh46.9 trillion carbon market set to experience a revolution

• Tanzania attracts over 20 corporations, including international investors, with a total investment value exceeding $20 billion (Sh46.9 trillion) in the booming carbon offset market. 
• The adoption of regulations and guidelines on carbon trading in Tanzania leads to an influx of over $1 billion (Sh2.3 trillion) in annual investments, supporting the nation’s commitment to reduce greenhouse gas emissions by 30-35 percent by 2030. 
• Tanzania’s vast protected forests, spanning 48 million hectares, create a lucrative market for carbon trading, offering a unique opportunity to capitalize on natural resources and drive sustainable economic growth.

With the government reportedly attracting over 20 corporations that want to invest over $20 billion (Sh46.9 trillion), the production and sale of carbon offsets are finally turning a profit in Tanzania.

Since the regulations and guidelines on carbon trading were adopted last October, according to Dr. Selemani Jafo, Minister of State in the Vice President’s Office (Union and Environment), investment has attracted more than $1 billion (Sh2.3 trillion), which will be mobilized annually through carbon trading throughout the country.

He was addressing yesterday at the Tanzania Private Sector Foundation’s (TPSF) High-Level Inter-Ministerial Dialogue on Carbon Trading.

Tanzania is on the cusp of a new age, one in which the carbon market may produce considerable benefits for the environment, local people, and the National Treasury, even if carbon offsets are intended to alleviate the consequences of climate change.

One metric ton of carbon or another GHG is equal to one carbon offset, which costs $65 (or around Sh152,100). According to Dr. Jafo, carbon trading would help the nation’s Nationally Determined Contributions (NDCs), which aim to reduce GHG emissions by 30-35 percent by 2030.

“We need to establish further cooperation between Tanzania and carbon credit investors and partners for our economy and future generations,” said Dr Jafo. “We are committed to supporting all investors and stakeholders in carbon trading in our country,” he added.

According to Tanzania Forest Service Agency (TFS), Tanzania Wildlife Management Authority (Tawa), Tanzania National Parks Authority (Tanapa), and Ngorongoro Conservation Area Authority (NCAA) deputy minister for natural resources and tourism Mary Masanja, over 20 companies had submitted applications.

The investors are from Kenya, Russia, Singapore, the United States, Canada, the United Arab Emirates (UAE), Switzerland, Estonia, and Italy, according to Ms. Masanja. She stated, “We have already entered into a Memorandum of Understanding with some companies, and talks with others under the coordination of the National Carbon Monitoring Centre, are in progress.”

She said that the businesses planned to make investments in the central government’s game reserves, village woods, community-based wildlife management areas, tree planting programs, reserve forests, and more.

According to Ms. Masanja, Tanzania has 48 million hectares of protected forests, creating a market for carbon. “With the introduction of the carbon trade regulations, we are optimistic that citizens will stop cutting down trees, and instead capitalize on the available potential,” Ms. Masanja highlighted.

In this time of swift global change, according to TPSF Executive Director Raphael Maganga, it is critical for Tanzania to take a strategic position in the carbon market.

“With over 51 percent of the land covered with forests, Tanzania has a unique opportunity to capitalize on our rich natural resources,” said Mr Maganga. “We need to embrace renewable energy solutions and implement environmentally friendly projects that will attract investment, create jobs and contribute to our economic growth,” he added.