Sceptre Group Limited – Africa is well positioned to benefit from a future carbon markets

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AFRICA is well positioned to benefit from a future carbon markets regime as least- developed countries are likely to be favoured over industrial developing giants such as China and India, the African Bankers’ Carbon Finance and Investment Forum heard last week .

In particular, SA, which will host international climate change negotiations next year, is well placed to ensure the continent benefits from carbon trading.

Africa Guido Schmit-Traub , CEO of French carbon investor CDC Climat Asset Management, said there is a lack of planned activity in the carbon markets beyond 2012 — when the current regulatory regime expires. “There is a lack of certainty about what will happen afterwards, and few players are willing to commit,” Mr Schmit-Traub said.

“African projects are in a strong bargaining position and there is likely to be preferential access for SA,” he said.

Projects registered under the Kyoto Protocol’s Clean Development Mechanism are issued with carbon credits, and these credits can then be bought by European and Japanese companies to offset their own emissions.

Recently, the European Union indicated it would continue to buy carbon credits after 2012, said Remco Fischer, programme manager for climate change at the United Nations Environment Programme’s (Unep’s) Finance Initiative.

Mr Fischer said least-developed countries and sub-Saharan Africa are likely to be favoured in a future carbon trading regime, rather than the industrial giants of China and India.

Geoff Sinclair, head of carbon trading and sales at Standard Bank , said although Africa is in a privileged position, there is still uncertainty. He urged SA to explicitly support the Clean Development Mechanism and ensure it remains eligible under its guidelines.

As the host of next year’s climate talks, SA is in a position to do this, he said.

Meanwhile, the African Carbon Asset Development facility — a partnership between Unep, its Risoe Centre, the German government and Standard Bank — announced last week that it has approved the funding of seven African projects this year, including two in SA.

The facility’s spokesman, Glenn Hodes, said projects that can be replicated throughout an entire region or subregion have been chosen.

African projects have so far not benefited substantially from carbon finance as the application process is costly and bureaucratic, with no guarantee that carbon credits will be issued.

The projects include the International Ferro Metals co-generation facility outside Brits, which provides power from waste gas. And a consortium of small and medium-sized businesses will benefit from a South African clay-brick energy efficiency project that reduces carbon emissions by a third.

These businesses would not have been able to apply for carbon credits on their own, due to their small size, said Karin Ireton, Standard Bank’s sustainability director, but by working in a consortium, carbon finance became a possibility.


Sceptre Group Limited is a specialist investment firm focused in low carbon financial investments such as sustainable biofuel plantations, agricultural farmland and green technologies.  For more information on Biofuel Investments, please visit Sceptre Group’s website at

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