Zimbabwe’s business community has been urged to invest in decarbonisation to remain competitive on the fast-growing global carbon trading market.
The call was made at the Business Council for Sustainable Development Annual Conference held in Bulawayo recently, where stakeholders highlighted the economic risks of inaction and the opportunities presented by the carbon market.
Never Gariromo, a carbon asset development specialist at the Institute of Sustainability and Development Finance, said industries must urgently adopt green production methods and invest in renewable energy to lower their carbon footprint.
“Industries must invest in green production methods to lower carbon intensity, especially in sectors like iron and steel,” Gariromo said.
“This will reduce Carbon Border Adjustment Mechanism (CBAM) fees imposed on EU importers.”
Gariromo stressed the importance of transitioning to renewable energy sources like solar and wind power.
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“This is crucial for sustainable development,” he said.
While the European Union’s Carbon Border Adjustment Mechanism poses a risk, Gariromo believes it is manageable with preparation.
“Carbon markets are an opportunity and CBAM is a major risk, but manageable with preparation,” he said.
Zimbabwe's major emitting sectors face challenges like outdated equipment and limited emission tracking systems.
The EU's CBAM will impose a carbon tax on Zimbabwean products with high emissions, reducing export competitiveness.
A carbon credit player suggested that the government enact laws requiring foreign-owned companies to pay carbon tax through local carbon credits.
“This avoids relying on foreign markets that buy at lower prices,” he said.
The source also proposed a regional approach, suggesting Sadc enacts a combined carbon framework to regulate carbon credit sales.
There has been rapid growth since 2020 in voluntary carbon projects in several key sectors: forestry (REDD+), agriculture, renewable energy, waste management.
Zimbabwe launched a new Carbon Trading Framework and has a National Carbon Registry with a revenue-sharing formula (30% government and 70% developer and community).
The Zimbabwe Carbon Market Authority has licensing and oversight mechanisms.