Zambia is expecting to generate at least 10 projects under the UN's new carbon market mechanism, mostly by transferring projects from the voluntary carbon market (VCM).
At least five Zambia-based VCM projects could be transitioned to the new mechanism under Article 6.4 of the Paris climate agreement next year, head of the environment ministry's green economy and climate change department, Ephraim Mwepya Shitima, told Argus in a recent interview.
By contrast, Zambia expects to transition only one or two projects from its limited portfolio under UN predecessor the clean development mechanism (CDM), although others might decide to follow suit if they see that "it works", Shitima said.
Zambia also expects two projects generated under the new Paris Agreement Crediting Mechanism (PACM) proper to be validated next year, thanks to the Supporting Preparedness for Article 6 initiative that provides support to Zambia, Colombia, Pakistan and Thailand.
The PACM, a centralised mechanism for trading carbon credits, is expected to launch next year following agreement on outstanding details at the UN Cop 29 climate summit starting in Baku, Azerbaijan, next week. The more advanced and less regulated bilateral carbon market mechanism under Article 6.2, which has already seen some activity, also depends on agreement at Cop 29 to provide clarity on registries, and the scope and timing of project authorisations.
There is an overall expectation that agreement will be reached at this Cop, following years of slow progress and failed deals, not least because the Cop presidency has named Article 6 a priority.
The lack of progress on Article 6.4 so far has not stopped project developers in Zambia, Shitima stressed, which have received support from the Zambian government. The government is also working on setting up a registry, although if it does not succeed in time, Zambia will use the international registry earmarked for countries unable to set up their own.
And despite the credibility crisis the VCM has suffered since early last year, the standard of Zambia's VCM projects — mostly registered under Verra and Gold Standard — is sufficiently high to allow them to transition to the PACM, Shitima said.
It is not yet clear whether the PACM will allow all forestry activities, which constitute most of Zambia's VCM projects. Afforestation and reforestation will be included, but the trickier "avoided deforestation" category is still being negotiated.
For forestry projects, carbon storage permanence is an important issue, and the Article 6.4 supervisory body recently proposed relatively strict conditions in the shape of a buffer pool for unavoidable reversals and insurance for avoidable ones. These rules have been criticised as possibly too strict and costly for host countries.
But Zambia welcomes these "stringent" rules, Shitima said. The country's green economy and climate change law, expected to come into force by the end of the year, will provide the legal basis for charging proceeds from project developers. These will go into a climate change fund, some of which will cover costs for dealing with reversals or guaranteeing the permanence of removals.
Zambia is also in talks with buyer countries under Article 6.2 and expects to sign bilateral agreements with Sweden — with which it already signed an initial agreement — and Norway in Baku.
