Carbon offset projects ‘having positive impact’

The carbon offset projects being undertaken in Tanzania by a Norwegian company, Green Resources ASA (GRAS), have begun to make remarkable progress in addressing the challenge of climate change and contributing significantly to national poverty alleviation efforts.

The conglomerate, which operates in the country as Green Resources Limited (GRL), grows trees for generation of carbon credits and bio-energy and for manufacturing wood products. As one of the largest forestation companies in Africa, GRL also operates in Mozambique and Uganda, and to a small extent in Southern Sudan.

Driven by the belief that forestation is one of the most efficient ways of developing and improving social and economic conditions for people in rural areas, the company had planted over 10,000 hectares of new forests in the country by the end of last year. Available data show that the tree planting company has generated more new trees than any other private company in Africa during the past ten years.

“A record 6,000 hectares of new forests were planted in 2010. In addition, the company holds more than 300,000 hectares of land for future planting and conservation,” GRAS noted in a recent statement.

In Tanzania, GRL has operations in Mufindi and Kilombero districts in Iringa and Morogoro regions, respectively. Sao Hill Industries of Mufindi in Iringa is its industrial operation in the country, which is East Africa’s largest sawmill, and the largest electricity pole plant in the region.

 “Up to the end of the 2010/11 planting season, the company had already planted about 13,000 hectares of new forest in the two districts,” the executive director of GRL, Mr Mwaniki Ngibuini, told Insight in a recent interview.

According to him, the company’s strategic mission in the country includes developing the forestry sector as a way of contributing to national efforts to alleviate poverty through sustainable development. He said the reforestation projects also contribute toward climate change mitigation through reduction of greenhouse gas emissions.

Mr Ngibuini further said that fighting poverty and provision of social services should not be shouldered by the government alone, but also be supported by the private sector, including business enterprises. Equally, he noted, all segments of society and sectors of the economy should be involved in the protection and conservation of the environment, which is increasingly being degraded by greed for profits and challenges of economic development.

Commenting on the achievements of the company’s operations in Tanzania, Mr Ngibuini said they include a long-term lease for 32,555 hectares for reforestation activities in the southern highlands. The company has also created 300 permanent jobs and employs an average of 1,000 temporary workers every year from the local communities in the areas where it operates.

The company also has a modern tree nursery at Makungu Village in Mufindi District, with a capacity of raising five million seedlings per year. In 2009, GRL entered into carbon revenue sharing agreement with the villages surrounding its project areas. Under the initiative, 10 per cent of all carbon offset proceeds are given to the communities for their social-economic development.

“This is very important because it enables these farmers to see direct, tangible benefits of the project in their locality, and of course they now can send their children to school and supplement their household incomes,” Mr Ngibuini told Insight.
By the end of 2010, the company had spent over Sh1 billion for implementation of several community development projects in the southern highlands. Among other things, they included improving education facilities through construction of classrooms and water wells.

He said that under the carbon trade project, four villages early this year received some $83,744 (about Sh125 million) from the company. The beneficiaries were villagers from Uchindile and Kitete villages in Kilombero District and Mapanda and Chogo villages in Mufindi District.

The project, which generated the revenue, was the first Agriculture, Forestry and Other Land Use (Afolu) project to be registered under the Voluntary Carbon Standard (VCS) in the world, and first to be verified successfully. The VCS is a fully-fledged carbon offset standard focusing on greenhouse gas (GHG) reduction attributes only, and does not necessarily require projects to have additional environmental or social benefits.

It is a new standard intended to cover GHG emissions reduction projects developed for voluntary markets. Voluntary offset markets function outside of the compliance markets and enable companies and individuals to purchase carbon offsets on a voluntary basis.

The primary purpose of undertaking carbon projects-- whether compliance or voluntary-- is to contribute to the mitigation of global climate change, which is already a great menace to the world.

Commenting on the need for proper climate change management strategies and initiatives, the Iringa Urban Member of Parliament (MP), Rev Peter Msigwa, said the challenge was huge both at national, regional and international levels. He said it was not a crisis for advanced economies alone, but also poor countries like Tanzania, which would be adversely affected if stringent measures were not timely taken to address the matter.

 “Climate change is one of the few uphill challenges the global community is facing and therefore more consolidated efforts are needed to deal with the natural calamities, which are always rendering havoc to mankind and the universe,” he pointed out.

Established in 1995, Green Resources ASA (GRAS) is a plantation, carbon offset, forest products and renewable energy company that has over 70 shareholders. It employed more than 5,300 people at the end 2010 and has invested $100 million in its African operations since its inception.

GRAS said in a recent statement that its operational strategy is based on sustainable development of the areas in which it operates. Through an International Finance Corporation credit line, it has been implementing an investment programme to expand and modernize its saw mill operations in Sao Hill, Tanzania, and establish additional plantations in the country as well as in Uganda and Mozambique.

Among other things, the programme seeks to achieve internationally recognized green certifications such as FSC, CDM and ISO 14001/9001; to plant 9,000 hectares of land with eucalyptus, pine, teak and indigenous trees, and to expand its equipment for harvesting and wood transportation.

The statement further noted that GRAS’s plantation an
d wood waste-to-energy projects will address the issues created by deforestation by increasing the amount of trees planted every year, thereby functioning as a carbon sink.

They will also create carbon offsets that will add to revenues, generate electricity from fuels produced by sustainably managed forests, provide a source of power poles for electric power distribution systems, and generate significant employment in rural areas for some of the poorest people in the countries where it operates.