Senegal, Switzerland authorize Article 6.2 carbon credits from EV project

Senegal and Switzerland have authorized the first carbon credits under their bilateral Article 6.2 agreement, backing a program to replace Dakar's aging diesel taxi fleet with electric vehicles in a deal that advances both countries' climate targets while opening a new front in Africa's quest to scale its carbon markets.

The Senegal Mass Car Electrification program, developed by Motion Energy Group, implemented by Mbay Mobility and supported by Switzerland's KliK Foundation, will generate Internationally Transferred Mitigation Outcomes that Switzerland will count toward its Nationally Determined Contribution under the Paris Agreement, the companies and countries said in a statement Sept. 25.

The authorization marks Senegal's first mitigation activity under Article 6, positioning the West African country alongside Ghana as one of the continent's most active host countries.

ITMO volumes

The project, which runs from August 2024 to the end of 2030, is expected to yield total emission reductions of 175,993 metric tons of CO₂ equivalent, all of which will be converted into tradeable ITMOs, according to official documents.

Just eight battery electric vehicles were active in 2024, generating a modest 8 mtCO₂e, but the fleet is projected to grow to over 6,000 BEVs by 2030, producing 72,279 mtCO2e in that year alone.

"Climate action is of great importance in Senegal, and the international carbon market mechanism is seen as a great opportunity to mobilize investment and accelerate the implementation of transformative and innovative mitigation activities," Papa Lamine Diouf, Head of Mitigation and Carbon Market Division at Senegal's Directorate for Climate Change, Ecological Transition and Green Finance, said.

Senegal is almost entirely reliant on oil, namely diesel and gasoline, for its transport fuels, with transport emissions growing by 50% between 2011 and 2021, according to the International Energy Agency.

The project targets this high-use, high-emission segment directly, combining EV imports with a fintech-enabled lease-to-own financing model designed to overcome the barriers that have historically made EVs prohibitive in Senegal.

"Carbon finance under Article 6 has made this possible, and we see it as the foundation for electrifying transport right across the region," Ben Cavanagh, Director at Motion Energy Group, said.

Article 6 trade

Article 6 of the Paris Agreement enables countries to transfer carbon credits earned from eligible domestic projects to other countries, helping them meet their climate targets. Under Article 6.2, countries can transfer emission reductions that count toward their domestic climate targets or sell them to other countries for use toward their own Nationally Determined Contributions.

The KliK Foundation has emerged as one of the most active buyers of Article 6.2 ITMOs globally. The foundation has previously backed electric bus programmes in Bangkok and clean cooking projects in Ghana, with Switzerland establishing itself as a pioneer in operationalizing bilateral Article 6 agreements.

Switzerland has established itself as a pioneer in operationalizing Article 6 globally, having forged a comprehensive network of bilateral agreements, implementation deals, letters of intent, and memorandums of understanding with multiple host countries.

More than 110 bilateral deals have been signed under Article 6.2, according to data compiled by S&P Global and the UN Environment Program, though activity has been slow to scale. The first batch of Article 6.2 certified electric vehicle ITMOs traded at around $12-$13/mtCO₂e in January 2024, sources told Platts, part of S&P Global Energy.