Several projects in Zimbabwe that generate carbon credits could come under threat after the government said it plans to control the country's carbon offset trade.
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The Zimbabwean government on May 16 released a national carbon credit framework outlining guidance on the compliance and voluntary carbon markets in the country.
But the framework also stipulates that the government should take 50% of the total revenue generated from carbon credit-projects, while foreign and local investors will be roughly entitled to 30% and 20% respectively.
Earlier in the year, President Emmerson Mnangagwa said that the generation of carbon credits in Zimbabwe needed to be revamped to ensure that the government gets "a fair share of the proceeds from the trade".
"The framework spells out the processes and institutions required to ensure that carbon credits assist the transformation needed to promote climate change mitigation and low carbon emissions in various sectors, among them, energy, and forestry," according to a statement by the Ministry of Information, Publicity & Broadcasting.
Null and void
In a media briefing on May 16, Zimbabwe's Minister of Information, Publicity and Broadcasting Service, Monica Mutsvangwa, also said that all previous carbon credit deals would be "null and void" as the government looks to earn revenue from offsets.
This is likely to have an immediate impact on the voluntary carbon markets as some of the most profitable carbon projects are located in Zimbabwe and in other neighboring African countries,
The Kariba Project in Zimbabwe, operated by carbon finance group South Pole, is one of the world's largest REDD+ forest protection projects. The project has come under heavy criticism after a recent media report alleged that the emissions avoided were vastly overestimated.
In the wake of the report, South Pole said in February it was pausing the sale of credits from the Kariba REDD+ project while it investigated a "discrepancy".
In a statement May 17, South Pole said it was reviewing the announcement by the Zimbabwean government on the carbon credit framework.
"We are assessing the implications that this new potential regulation might have on the Kariba REDD+ project and the local communities. We will comment further when this review is complete," the Switzerland-based company said.
Zimbabwe is also home to a number of cookstove and household devices projects that generate carbon credits.
Many African countries are keen to increase their presence in the voluntary carbon markets.
The Africa Carbon Markets Initiative, which aims to support the growth of carbon credit production and create jobs in Africa, was formed in November.
The new partnership aims to harness Africa's largely untapped potential to contribute to the supply of carbon credits while unlocking billions in revenue.
Countries such as Kenya, Malawi, Gabon, Nigeria and Togo have already started collaborating with the ACMI to scale carbon credit production via voluntary carbon market activation plans.