Carbon trading projects play a vital role in Tanzania’s efforts to combat climate change and achieve sustainable environmental development. These projects are governed by specific regulations that provide a legal framework for their control and management. The objective of these regulations is to enhance environmental conservation and contribute to global greenhouse gas emissions reduction targets.
Under the regulations, the Minister responsible for the Environment in Tanzania holds overall responsibility for climate change matters, including carbon trading. The ministry serves as the Designated National Authority or National Focal Point, linking Tanzania with international climate change processes and facilitating the registration of carbon trading projects under compliance and voluntary mechanisms.
To initiate a carbon trading project in Tanzania, a Project Proponent must apply for approval by submitting an application form and paying the required non-refundable application fees. The Designated National Authority or National Focal Point reviews the project idea within a specified time frame. Once approved, the Project Proponent develops a detailed Project Concept Note, which outlines the key elements and objectives of the project.
Upon submission of the Project Concept Note, the Designated National Authority or National Focal Point reviews it and issues a Letter of No Objection if the project meets the necessary criteria. If improvements are needed, the authority provides recommendations to enhance the Project Concept Note.
After obtaining the Letter of No Objection, the Project Proponent is required to develop a comprehensive Project Document within a specific timeframe. The Designated National Authority or National Focal Point reviews the Project Document to ensure compliance with the regulations and submits the project proposal to the Minister responsible for the Environment for Endorsement of Implementation.
Once the Endorsement of Implementation is granted, the Project Proponent has a specified period to commence the implementation of project activities. This timeline emphasizes the importance of prompt action to address climate change and achieve tangible results.
Costs and benefits sharing arrangements in carbon trading projects in Tanzania consider factors such as the capital invested and the roles and responsibilities of project stakeholders. In land-based projects, the Managing Authority, typically the property owner, is entitled to 61% of the gross revenues generated from the sale of Certified Emission Reductions. The remaining 39% is allocated, with 9% paid to the Designated National Authority or National Focal Point. However, projects with high initial investment costs involve negotiated arrangements between the Managing Authority and the Project Proponent.
To ensure fairness and equity in costs and benefits sharing, the Designated National Authority or National Focal Point provides guidance and facilitates transparent negotiations among project stakeholders.
It is essential to adhere to the regulations governing carbon trading projects in Tanzania. Non-compliance is considered an offense, with penalties including fines ranging from TZS 10,000,000 to TZS 10,000,000,000 (approximately USD 4,000,000) and the possibility of imprisonment for up to 12 years.
By promoting and supporting carbon trading projects, Tanzania aims to make a meaningful contribution to global efforts in reducing greenhouse gas emissions, while simultaneously advancing sustainable development and environmental conservation within the country.
The requirement to register a carbon trading project
Carbon Tanzania projects should meet two (2) requirements in order to operate.
Procedures to establish and operate carbon trading projects
- The project proponent or Managing Authority shall apply for approval of the carbon trading project idea to the Designated National Authority or National Focal Point by filling the application form prescribed in the First Schedule;
- The completed application form shall be accompanied with proof of payment of a non-refundable application fee of between USD 250 (for citizens) and USD 500 (for non-citizens) as prescribed in the Second Schedule;
- The Designated National Authority or National Focal Point shall within thirty (30) days process and respond to the proponent on the registration of the project idea;
- Where the requirements for application have been complied with the Designated National Authority or National Focal Point shall direct the proponent or the Managing Authority to develop a Project Concept Note. The project proponent (in collaboration with Managing Authority or project partners) shall have ninety (90) days from the date of registration of the project idea to develop a Project Concept Note.
- The Project Concept Note shall then be submitted to the Designated National Authority or National Focal Point for review and scrutiny accompanied by proof of payment of project registration fees (1% of the expected CER from the project) as prescribed in the Second Schedule and consent from the Managing Authority in the form of extract minutes in line with established procedures of the respective authority;
- The Designated National Authority or National Focal Point shall within thirty (30) days of receiving the Project Concept Note issue a letter of no objection for a qualified Project Concept Note as prescribed in the Third Schedule or a letter of recommendation for improvement of the Project Concept Note;
- The project proponent (in collaboration with Managing Authority or project partners) shall have twelve (12) months to develop a Project Document after obtaining the letter of no objection. The proponent may by way of written notice request for an extension of time by stating the reasons for the delay to develop and submit the Project Document and an extension time of not more than six (6) months may be given;
- The Project Document submitted to the Designated National Authority or National Focal Point must abide by accepted international standards on carbon trading including validation of the project where required;
- The Designated National Authority or National Focal Point shall within thirty (30) days from the receipt of the Project Document and upon satisfaction that the Project Document meets all the requirements, submit to the Minister responsible for environment (the Minister) the project proposal for endorsement of implementation (the letter of endorsement shall be prescribed in the Fourth Schedule); and
- The proponent shall within two (2) years after receiving the endorsement start implementing the project.
Instances where the endorsement may be cancelled
The endorsement for project implementation may be cancelled in the following circumstances:
- where the proponent has voluntarily cancelled the project by submitting an official notice;
- where the endorsement was obtained through misrepresentation;
- where the continued operation of the project activity is likely to be injurious to the environment or human health;
- where the project activities are overridden by other public interests;
- where there was insufficient or holding of information in the application process;
- failure to submit the Project Concept Note or Project Document within the prescribed time;
- failure to commence the project activities within the prescribed time; and
- non-compliance with the project requirements as stipulated under the Regulations.
Offences and penalties
It is an offence to:
- provide false, misleading or deceptive information in order to secure an endorsement;
- to fail to furnish information related or connected to the project as required by the provisions of the Regulations;
- violate any conditions attached to the grant of endorsement under the Regulations; and
- implement a carbon trading project without endorsement issued under the Regulations.
Any person who violates the provisions of the Regulations commits an offence and upon conviction shall be liable to a fine of not less than TZS 10 million (equivalent to USD 4,279) but not exceeding TZS 10 billion (equivalent to USD 4,279,000) or imprisonment for a term not exceeding twelve (12) years or to both fine and imprisonment. In addition, a person convicted of any of the above offences shall be prohibited from engaging in any carbon trading project.
The review process
- a person aggrieved by any decision made under the Regulations save for a decision of the Minister may appeal to the Minister;
- without prejudice to the above, any person who is aggrieved by the decision of the Minister may apply for a review to the Minister; and
- the appeal or review above shall be determined by the relevant authority within fourteen (14) days from the date of receipt of the appeal or review.
Environmental Management (Control and Management of Carbon Trading) Regulations, 2022
Kanuni za Udhibiti na Usimamizi wa Biashara ya Kaboni za Mwaka 2022
For more information contact,
Prof. Eliakimu Zahabu
National Carbon Monitoring Centre (NCMC)
Sokoine University of Agriculture
P.O Box 3009
Morogoro – Tanzania
Telephone: +255 23 2 604648
Fax: +255 23 260 4648
Mob: +255752596503
Email: ncmctanzania@sua.ac.tz
Website: https://www.ncmc.sua.ac.tz
