Malawi : earns $5 million from carbon trading

Principal Secretary for Natural Resources and Climate Change, Yusuf Mkungula, said in an interview that the government had finalized Malawi’s carbon regulatory framework, legislation designed to facilitate the implementation of carbon trading projects in the country.

Last week, we finalized the validation of the framework with various experts, including those from the Carbon Market Initiative, which was launched by President Lazarus Chakwera last year,

said Mkungula.

He further revealed that the Ministry had received around 38 expressions of interest for various carbon projects from investors, some of whom have already received letters of no objection to the development of project documents. Over the past five years, Malawi has put in place green development mechanisms to promote the sustainable use of natural resources. This, according to Mkungula, has resulted in the generation of 1.5 million carbon credits, of which 75,000 have been sold, raising around 5 million USD (K150 million) for the government.

Reducing Emissions from Deforestation and Degradation in Developing Countries + is a United Nations (UN)-led climate action framework that encourages countries to implement forest protection initiatives within the framework of the UNFCCC Paris Agreement. It aims to limit global surface temperature rise to less than 1.5°C. Malawi has been implementing the REDD+ program since 2012 to mitigate the impacts of climate change, as the country’s economy relies heavily on rain-fed agriculture, making it vulnerable to climate change risks. In 2023, the government launched the Carbon Market Initiative, aiming to generate annual revenues of around 600 million USD (1.4 trillion K).

The initiative aims to capitalize on the country’s estimated 19.9 metric tons of carbon stocks using forest reserves and other land resources. Meanwhile, Total Landcare is implementing a carbon project called Restore Africa in the Mzimba district, Total Landcare project manager Mphatso Thawe urged the government to speed up the implementation of relevant policies and regulations, including Malawi’s carbon regulatory framework.

By planting trees and caring for existing trees and other nature-based resources, landowners earn credits for the carbon stored on their property. These credits are bought by companies to offset their emissions,

said Thawe.

During CoP27 in Egypt in 2022, President Lazarus Chakwera highlighted Malawi’s potential to meet its climate change financing needs through carbon trading, with a capacity to raise over 100 million USD from carbon credits for climate change financing. Carbon markets enable the trading of carbon credits, which allow companies or individuals to offset their greenhouse gas emissions by purchasing them from entities involved in activities aimed at eliminating or reducing emissions.

Carbon markets enable carbon credits to be traded, and these credits allow companies or individuals to offset their greenhouse gas emissions by purchasing them from entities involved in activities designed to eliminate or reduce emissions.