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Corner of John Mbita & Nationalist Roads
P.O BOX 30147
Lusaka, Zambia
+260211252395 || +260211252394 || +260211252391
Carbon Markets are carbon pricing mechanisms enabling governments and non-state actors to trade Green House Gas emission credits in order to achieve climate targets and implement climate actions cost effectively. There are two types of Carbon Markets: Compliance and voluntary. In compliance markets such as national or regional emissions trading schemes participants act in response to an obligation established by a regulatory body. In voluntary Carbon Markets, participants are under no formal obligation to achieve a specific target. Instead, non-state actors such as companies, cities or regions seek to voluntarily offset their emissions, for example, to achieve mitigation targets such as climate neutral, net zero emissions (UNEP)
Zambia’s Carbon Market Framework has been established to support the development and implementation of high integrity carbon projects and overall Carbon Markets, emphasizing sustainable development, compliance with national regulation and alignment with international requirements.
Carbon credits represent verified reductions in emissions that can be traded to meet emission reduction targets.
Carbon Finance is the finance/payment received for the delivery of emission reduction. It is a new innovative tool that can be used to leverage private and public investment into projects to reduce greenhouse gas emissions. Zambia’s approach to ensuring access to carbon finance includes ensuring that projects meet high-quality standards and comply with national regulations.
Climate Finance on the other hand is financial resources drawn from public or private, national or international sources in the form of grants, loans or domestic budget allocations for the purpose of implementation of mitigation or adaptation activities.
Zambia has made emission reduction pledges through Nationally Determined Contributions (NDCs), Zambia is committed to reduce its greenhouse gas emissions by 25% (at Business As Usual (BAU) level of international support prevailing in 2015) and towards 47% (with substantial international support) compared to 2010 levels. Details of the pledge and the implementation framework may be found here:
https://ndcpartnership.org/country/zmb
Carbon Project Developers can participate in Carbon Markets Projects by submitting proposals and requests for authorisation to the Ministry of Green Economy and Environment (MGEE) in accordance with the detailed guidance set forth in the Carbon Market Framework. MGEE approves projects that meet all evaluation criteria, that ensure projects contribute meaningfully to climate mitigation and align with national agenda. The key principles surrounding the eligibility criteria include:
Ensuring Environmental Integrity: Emphasizes the need for accurate measurement and reporting of emission reductions to prevent overestimation and ensure real, verifiable environmental benefits.
Sustainable Development: Projects should align with both local and global sustainability objectives, promoting ecological and socio-economic benefits that support broader development goals.
Ambition Raising: Encourages greater climate action through ambitious emission reduction strategies and mechanisms, aligning with Zambia’s commitments under the Paris Agreement.
1. Submission: Project developers submit requests and proposals for consideration of authorisation to the MGEE. Submissions occur at two stages;
a. Mitigation Activity Idea Note (MAIN). A preliminary submission for which the developer may receive a Letter of No Objection to proceed and develop the idea further.
b. Mitigation Activity Design Document (MADD), a secondary detailed submission for which the developer may receive a Letter of Approval and Authorisation to proceed to implement the project and on meeting approval conditions be authorised to transfer the generated mitigation outcomes (ITMOs)
2. Preliminary Review by MGEE (A6 Secretariate): A6 Secretariate conducts an initialreview to ensure completeness of the documentation in line with what’s required, eitherat the MAIN or MADD stage of submission.
3. Technical Evaluation by TSCCC: The TSCCC, also interchangeably called the Designated National Authorityperforms a comprehensive evaluation, against the Article 6 criteria with regards environmental integrity, ambition raising and sustainable development contributions.
4. Approval by MGEE: Based on the TSCCC’s recommendations, the MGEE provides an approval, i.e. a letter of No Objection or a Letter of Approval and Authorisation, depending on the stage of the application. All the while ensuring, the approval aligns with Zambia’s NDCs and overarching climate policy.
Carbon Project proposals are preliminary reviewed by the Ministry of Green Economy and Environment (MGEE) through the A6 Secretariate. The Secretariate review ensures completeness of the documentation in line with what’s required, either at the Mitigation Activity Idea Note (MAIN) or Mitigation Activity Design Document (MADD) stage of submission.
Once MGEE approves, there is a technical evaluation by TSCCC that performs a comprehensive evaluation, against the Article 6 criteria with regards environmental integrity, ambition raising and sustainable development contributions. Based on the TSCCC’s recommendations, the MGEE provides an approval, i.e. a letter of No Objection or a Letter of Approval and Authorisation, depending on the stage of the application. All the while ensuring, the approval aligns with Zambia’s NDCs and overarching climate policy.
Ministry of Green Economy and Environment (MGEE) conducts completeness checks within 5 work days and informs the (Mitigation) Activity Proponent (AP) on the outcome:
The Technical Climate Change Committee for Mitigation (TSCCC-MIT) convenes at least once per quarter and further on need-basis. MGEE compiles all submissions and provide submissions via email to all the TSCCC-MIT members and alternates at least 14 calendar days before the meeting.
The TSCCC-MIT members review all submissions before the meeting and during the meeting the TSCCC-MIT makes decisions on all submissions following the evaluation criteria.
MGEE provides written feedback to the AP on the TSCC-MIT’s decisions within 10 to 30 work days after the meeting, depending on whether the project is at the MAIN or MADD phase. In the case of rejection, MGEE informs the AP on the specific missing requirements, and invites the AP to resubmit with revisions, if of interest.
Communities can participate in Carbon Markets through the development of Carbon Projects in any of Zambia’s NDC sectors. The projects developed must be in line with the guidance provided in the Carbon Market Framework.
Communities can also partner and or actively collaborate through participation with new and or already existing carbon projects in any of Zambia’s NDC sectors including projects that are contributing to Reducing Emissions from Deforestation and Forest Degradation (REDD+).
The Article 6 Secretariate under the Ministry of Green Economy and Environment (MGEE) is responsible for the coordination of Carbon Market activities in Zambia. Please contact us. Email Options: a6secretariate@mgee.gov.zm for more information.
If the cash flow of your activity demonstrates an IRR that is below the IRR benchmarks described above, then the project has demonstrated financial additionality, and the project may be eligible to access carbon finance. You may then proceed to the next step: The calculation of the carbon price required to meet the IRR benchmark.
To do this, project developers must include a “carbon revenue stream” to their project cash flow model. Depending on the amount of emission reductions generated by your project, the price per emission reduction needed can be inserted in the cash flow to achieve the respective IRR benchmark. This resulting value determines the minimum price per emission reduction (carbon price) required to make the activity financially viable. This price must be communicated to the Carbon Market Secretariat at the Ministry of Green Economy and Environment (MGEE) and the Technical Committee on Green Economy and Climate Change as the Designated National Authority (DNA).
The CMR, Indicator N°3 requires the consideration of the unconditional NDC in baseline setting. Specifically in the case of cookstove projects, project proponents are encouraged to use the most recent MoFuss value (estimating the fNRB for Zambia) and to define fNRB as a parameter to be monitored (i.e. not parameter fixed ex-ante). This approach allows to reflect future changes in policies and regulation in baseline setting. E.g. the government may decide in the future to expand the current ban of charcoal production to additional districts having an impact on fNRB. By using fNRB as a monitoring parameter, this would be efficiently reflected. This is a guidance and not requirement.
The CMR define technical requirements (i.e. the 16 indicators) but equal procedural requirements for validation processes. These are repeatedly neglected causing delays and incremental costs.
Please be aware, that the CMR requires DOEs to become registered with the A6 Secretariat. This is a simple and swift process, where the DOE has to confirm knowledge of the CMR and its requirements to be reflected in the validation report and equally the requirement to engage a national GHG expert based in Zambia. The latter assures that the validation team is familiar with activity data and emission factor data of the national GHG inventory (consistency is desired given the nature of the Corresponding Adjustment) and the national GHG expert can contribute in-depth knowledge of national policies regulations to the validation work stream.
Missing this requirement leads by regulation to a rejection of your application.
The CMR Indicator N°12 requires that the mitigation activity carry out an ex-ante
sustainable development (SD) impact assessment, covering both quantitative as well as qualitative aspects. In particular, project developers are required to apply one of the existing SD tools as provided in the CMR (e.g., the 16 indicators), which enables a more comprehensive assessment of both positive as well as negative impacts envisaged during the entire project lifecycle. These impacts should be assessed across the three key categories: economic, social and environmental.
The internationally recognized tools include SD tools for Article 6.4, Gold Standard SDG Impact Assessment Tool, Verra Sustainable Development Verified Impact Standard. If an alternative impact assessment approach or framework is adopted, a clear rationale and justification must be provided, along with a description of the applied approach and methodology, and they should adhere with the international standards and best practices. Furthermore, the identified impacts should be linked to and incorporated into monitoring indicators or parameters, forming an integral part of the regular monitoring and reporting cycle. The assessment should aim to present a balanced and reasonable
representation of impacts, avoiding the understatement of potential negative effects or the overstatement of anticipated positive outcomes.
P.O BOX 30147
Lusaka, Zambia
+260211252395 || +260211252394 || +260211252391