Stakeholders call for carbon trading framework reforms

DAR ES SALAAM: CARBON trading stakeholders have called for reforms to carbon trading framework after Carbon Tanzania temporarily halted its YaedaEyasi Landscape Project due to shifting global market demands and rising compliance costs.

The suspension comes as international buyers increasingly favour carbon credits certified under the Integrity Council for the Voluntary Carbon Market’s (ICVCM) Core Carbon Principles (CCP), while existing domestic regulations make it costly for local projects to meet the new standards.

Speaking to the Daily News recently, Carbon Tanzania Chief Executive Officer, Ms Sally Capper said the project had suffered a sharp decline in funding as buyers shifted away from traditional REDD+ forest protection credits.

“The decision comes as the project faces a sharp decline in funding as a result of global demand that is prioritising Core Carbon Principles (CCPs)-labelled carbon credits, which entail high costs to upgrade projects to new methodologies and a prohibitive domestic regulatory framework,” Ms Capper said.

She said the temporary suspension would allow stakeholders to address the challenges and identify solutions that would enable the project to transition to CCPlabelled standards and secure long-term funding.

The Yaeda-Eyasi Landscape Project protects about 108,000 hectares of dryland forest in northern Tanzania, the ancestral homeland of the Hadza hunter-gatherers who have lived in the area for thousands of years.

Implemented since 2013 through a partnership between Carbon Tanzania and Hadza and Datooga communities, the project works with 11 villages involving about 63,000 people across Manyara and Arusha regions.

Ms Capper said the changing voluntary carbon market had significantly reduced demand for conventional REDD+ credits, with many buyers now preferring carbon removal projects over emission reduction initiatives.

She said Tanzania also lacks some of the national datasets required under the new CCP methodologies, making it difficult for local project developers to transition their credits quickly to meet emerging global standards.

According to her, the combination of changing market expectations and regulatory costs has disrupted revenues earned by communities participating in carbon projects.

“Funds are actively being sought to bridge the gap until the project can upgrade,” she said.

While reaffirming Carbon Tanzania’s commitment to its community partners, Ms Capper said the current framework places an unsustainable financial burden on project developers.

“Our primary duty is to ensure they continue to receive the financial benefits of their stewardship. To do that, we need to bridge this funding gap and work alongside other stakeholders to build a regulatory framework in Tanzania that actually enables high-quality carbon projects to succeed,” she said.

She said similar regulatory challenges had also forced Carbon Tanzania to pause development of another project covering the Tongwe and Masito forests in western Tanzania.

The company is evaluating how that initiative can achieve long-term success for local district councils, surrounding communities and the company within the existing regulatory framework.

Ms Capper said the experience highlighted the importance of transparent and supportive policies in unlocking both the economic and ecological value of Tanzania’s forest resources.

“To make nature-based carbon projects viable in Tanzania over the long term, the national carbon trading regulatory framework needs to be reformed,” she said.

She warned that without regulatory changes, high investment and compliance costs could threaten the viability of community-based carbon projects across the country.

According to 2024 Uongozi Institute report, Carbon Trading in Tanzania, also calls for stronger regulatory and institutional frameworks, improved coordination across the sector and benchmarking Tanzania’s carbon trading system against more developed regional and international markets.