Ministry approves Malawi carbon credits auction

Ministry of Natural Resources and Climate Change has authorised private firm Hestian Innovations to auction the country’s carbon credits on the international markets.

The decision is part of the Malawi Carbon Markets Initiatives that President Lazarus Chakwera launched on June 23 last year to boost the country’s foreign exchange earnings through the sale of carbon credits.

At the time, the President said the country had carbon credits estimated at 19 882 394.93 metric tonnes (MT) per annum.

In a presentation yesterday to the Parliamentary Committee on International Relations in Lilongwe, Ministry of Natural Resources and Climate Change Principal Secretary Yusuf Nkungula said they have issued a letter of authorisation to Hestian to auction 1.5 million MT.

The carbon dioxide to be auctioned is valued at about K3.2 billion on the international markets.

He said: “We also have three carbon credits at authorisation level and 36 other carbon credit projects under development.

“The projects are focusing on renewable energy, forest, restoration and waste management in line with nationally determined contributions [NDCs].”

Carbon credits are permits that allow the owner to emit a certain amount of carbon dioxide or other greenhouse gases. Carbon credits can also be issued when a country has undertaken a project to avoid and/or reduce greenhouse emissions.

Nkungula said there is a lot of potential for revenue generation in carbon credits, but cautioned that there were some challenges, including limited climate financing as well as complex and hard to follow procedures to qualify for carbon trading.

In an interview yesterday, Self Help Africa energy programmes manager Will Coley said capacity challenges; structural, technical and financial barriers have undermined Malawi’s capacity to leverage the potential of its carbon credits.

He urged the government and other stakeholders to promote accessibility by removing barriers to entry and empower local organisations and entrepreneurs to

 “There should be transparency and equity in the reforms. Transparency means project development, activities, and governance should be carried out inclusively with information available for scrutiny by all relevant stakeholders,” said Coley.

Self Help Africa recently launched a project funded by the United States Agency for International Development and British Foreign, Commonwealth and Development Office, formerly UKAid, to establish a “coordinating and managing entity”.

The project is dedicated to reducing barriers to accessing carbon finance by local enterprises/organisations in the cleaner cooking sector in Malawi.