The UAE Carbon Alliance has pledged to purchase $450 million in African carbon credits by 2030, as it seeks to connect the high-integrity supply of African carbon credits to high demand from the Middle East.
A non-binding letter of intent with the Africa Carbon Markets Initiative’s Advance Market Signal was signed by Sheikha Shamma bint Sultan, president and chief executive of the UAE Independent Climate Change Accelerators (UICCA), the climate change organisation said on Monday.
The UAE Carbon Alliance was launched by the UICCA in June to help support the transition of companies to a green economy, as set out in the UAE Net Zero by 2050 Strategic Initiative.
A carbon market is a trading system in which carbon credits are bought and sold.
“Our collaboration with the Africa Carbon Markets Initiative provides carbon market buyers in the UAE and wider region with access to high-quality carbon credits in Africa … Through this pledge, we hope to foster more integrated and efficient carbon market mechanisms between our two regions,” Sheikha Shamma said.
The move helps to unlock Africa’s carbon credit generation potential as well as support sustainable investment opportunities and long-term climate impact, she said, adding that carbon markets are a pivotal part of the UAE’s decarbonisation journey.
Africa will play a “fundamental role” in implementing the goals of the 2015 Paris Agreement on climate, officials said ahead of the Cop28 summit in the UAE in November.
The world must ensure that climate finance is more “available, affordable, and accessible” to all developing countries, including those in Africa, Cop28 President-designate Dr Sultan Al Jaber, Kenya’s President William Ruto and African Union Commission chairman Moussa Mahamat said separately in a joint statement released at the Africa Climate Summit in Nairobi on Monday.
International investment must be “massively scaled up” to enable commitments to be turned into action across the continent, the statement said.
At the summit, Irena, in collaboration with Kenya, the UAE, Denmark and Germany, announced a partnership pledging to boost renewable energy in Africa.
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The Africa Carbon Markets Initiative (ACMI) is a collaborative effort incubated by Sustainable Energy for All, the Global Energy Alliance for People and Planet and The Rockefeller Foundation, and rolled out in partnership with the UN Economic Commission for Africa and the UN Climate Change High-Level Champions.
Launched during Cop27 in Egypt, the initiative aims to create, amplify and sustain the next generation of high integrity carbon credits in Africa with the aim of reducing emissions and bringing transparency to voluntary carbon markets in the region.
The critical signal from the UICCA amplifies the ACMI mission “to build integrity via transparency and accountability for high-integrity carbon credits in Africa”, said Paul Muthaura, chief executive of ACMI.
“UICCA’s pledge is a testament to the opportunity created through international co-operation in addressing climate change. Together, we aim to create a sustainable, transparent and equitable carbon market ecosystem in Africa that will drive significant positive impact for our continent and the world,” he said.
To date, the current signatories under ACMI’s Advance Market Signal include Standard Chartered, Vertree, ETG and Nando’s, with an estimated $200 million collected for purchase of African carbon credits by 2030, the UICCA said.
The founding members of the UAE Carbon Alliance include AirCarbon Exchange, First Abu Dhabi Bank, Mubadala Investment Company, Taqa and Masdar, in addition to UICCA as its secretariat.