Where Africa Stands Today
The good news is that the transition pathway is clear. The UNFCCC has defined procedures for CDM projects and Programmes of Activities (PoAs) to request migration to PACM before the deadline (UNFCCC, 2023). This gives developers of renewable energy, afforestation and efficiency projects the ability to preserve their investments rather than start from scratch.
At the same time, initiatives like the African Carbon Markets Initiative and support from UNECA, the NDC Partnership and bilateral donors are helping governments strengthen their Designated National Authorities (DNAs), build national registries and train staff. Countries with stronger CDM legacies — South Africa, Kenya, Morocco and a few others — are already piloting Article 6 projects and drafting bilateral agreements (NDC Partnership, 2024).
South Africa: With one of the largest CDM portfolios in Africa, particularly in renewable energy and industrial energy efficiency, South Africa has leveraged this base to prepare for Article 6 transactions. Its Designated National Authority (DNA) has been active in clarifying approval processes, while South Africa has also engaged in bilateral discussions on Article 6 cooperation, particularly with European buyers (World Bank, 2023). Pilot projects in sectors like renewable hydrogen and carbon capture are being structured to test how corresponding adjustments and reporting will work under Paris rules.
Kenya: Known for its geothermal and clean energy projects under the CDM, Kenya is emerging as a regional innovator in carbon markets. The government has enacted legal frameworks that clarify carbon rights and revenue-sharing with local communities (Government of Kenya, 2023). Kenya is also part of international initiatives exploring Article 6 pilots, including discussions with Switzerland, which has been one of the most active Article 6 buyers globally. These pilots are designed not only to secure international demand but also to feed directly into Kenya’s climate strategies.
Morocco: Morocco’s extensive CDM portfolio in wind and solar energy provides a strong foundation for Article 6 activities. The country is actively exploring bilateral agreements with European partners, leveraging its role as a key energy exporter in the region. Morocco’s Ministry of Energy Transition has signaled its intent to align carbon markets with its broader green hydrogen roadmap, which is central to its industrial decarbonization strategy (UNECA, 2024).
Many of these Article 6 pilots
are small-scale, early-stage, or focused on readiness (capacity building). Few
are yet generating large volumes of carbon credits with clear buyer demand
under Article 6.4 or with robust registry/corresponding-adjustment systems. Even
with pilots, some countries still lack fully operational rules on how Internationally Transferred Mitigation
Outcomes (ITMOs) are authorised, how they interact with Nationally
Determined Contributions (NDCs), how corresponding adjustments are managed,
what legal contracts look like, and how property rights, etc., operate.
In addition, the pilot nature means higher risk, and many investors are cautious until they see stable market participation and clear demand. Transparency around methodologies, accounting, price risks, etc., remains a concern. Similarly, these Article 6 pilots are experimenting with different approaches; convergence on best practices (baseline methods, additionality, leakage, permanence, etc.) is still underway. Furthermore, differences across countries/sectors complicate a standardised rollout.
Nevertheless, these early movers are not just benefiting themselves — they are creating templates for other African countries. By testing registry systems, piloting corresponding adjustments, and negotiating bilateral deals, South Africa, Kenya, and Morocco are ironing out the legal and technical kinks. Their progress could help establish regional standards or even inspire shared registry platforms, reducing costs for less-prepared countries.
What are the ‘Early Wins’?
The existing CDM infrastructure offers a base to build on, reducing transaction costs. The UNFCCC decisions and CDM guidance enable eligible projects to transition rather than restart, preserving investment certainty for many renewables, Afforestation and Reforestation (A/R) and efficiency Programmes of Activities (PoAs). That has already unlocked interest in submitting transition requests.
In addition, targeted donor support is creating “early mover” countries that can demonstrate success. For example, regional reports show active private sector and donor financing for readiness and registry work, enabling an “early mover” cohort of projects to convert quickly.
Also, developers and buyers are showing an appetite for new Article 6 credits, especially where governments signal openness.
These are important confidence signals — they prove the transition is possible, not just theoretical.
The Challenges Ahead
Despite the above optimism, Africa’s readiness is uneven. Many DNAs remain understaffed and underfunded, struggling to develop robust approval systems or connect registries to international platforms (World Bank, 2023). The quality of credits is also under scrutiny: older Carbon Emission Reductions (CERs) face questions about additionality and whether they align with tougher Paris-era integrity standards.
Perhaps the biggest challenge lies in policy clarity. Host countries must decide how transitioned credits interact with their own NDC targets and whether to allow their use internationally. Without this, project owners face uncertainty over market demand and credit pricing.
Finally, technical hurdles persist. Linking registries, applying corresponding adjustments, and ensuring transparent accounting require digital infrastructure that many countries have yet to establish (UNFCCC, 2023).
Looking Forward
Africa’s transition to PACM will likely happen in waves. The first successes will emerge from better-prepared countries and projects. But unless governance systems, financing and technical tools are scaled rapidly, many others risk being left behind.
The pathway is there. The early wins are encouraging. The real question is whether Africa can convert them into a continent-wide success story — one that ensures not just participation, but leadership in the next era of global carbon markets
References
· UNFCCC
(2023). Decisions on the transition of CDM activities to the Article 6.4
mechanism. Available at: https://unfccc.int
· World
Bank (2023). State and Trends of Carbon Pricing 2023. Washington, DC:
World Bank.
· NDC
Partnership (2024). Africa Article 6 Readiness Support Initiatives.
Available at: https://ndcpartnership.org
· Conservation
Rising (2025). Kenya and Switzerland Sign Carbon Credit Trade Deal.
Available at: https://www.conservation-rising.com/p/kenya-and-switzerland-sign-carbon-credit-trade-deal
· Hespress
(2020). Morocco, Germany Sign Green Hydrogen Cooperation Agreement.
Available at: https://en.hespress.com/17129-morocco-germany-sign-green-hydrogen-cooperation-agreement.html
· Hiba
Press (2024). Morocco and Germany Strengthen Climate and Energy Alliance.
Available at: https://en.hibapress.com/7703.html
· Department
of Forestry, Fisheries and the Environment (DFFE), South Africa (2023). Draft
South Africa Article 6 Framework. Pretoria: Government of South Africa.
Available at: https://www.dffe.gov.za/sites/default/files/docs/draftsa_article6_framework.pdf
· South
African Revenue Service (SARS) (2024). Phase Two of the Carbon Tax –
Discussion Paper. Available at: https://www.sars.gov.za/wp-content/uploads/Legal/DiscPapers/Legal-LPrep-DP-2024-03-Phase-two-of-the-carbon-tax.pdf
No comments:
Post a Comment