The most consequential instruction at last week’s Tanzania Carbon Market and Investment Forum in Dar es Salaam was not about forests. It was about railways, buses and dams.
Honorable Minister Hamad Masauni gave public institutions six months to identify carbon market opportunities in their projects, naming the Standard Gauge Railway, the Dar es Salaam Rapid Transit system and the Julius Nyerere Hydropower Project, and told them to build emission reductions into planning and design rather than consider them after implementation.
He also announced more than Sh5 billion this year for digital systems to monitor reductions and register projects and credits. The instruction is far more demanding than it sounds.
Consider the numbers. More than 100 projects are registered in Tanzania, yet the minister told a forum in Kigali days earlier that six are generating credits. That gap between registration and issuance is where investors actually live.
The first test is the one every credible carbon standard begins with: would this project have happened anyway? The Julius Nyerere dam is complete and was paid for from domestic resources, so persuading a serious buyer that carbon made it possible would be a very hard sell.
The real prize sits in what has not yet reached financial close: railway sections still awaiting finance, later phases of the bus rapid transit network, future transmission lines. For those, carbon must appear in the financial model and the board papers before the investment decision. I press this question on every client, and a purely legal review rarely asks it: show me the date carbon first entered your numbers. Additionality is a matter of chronology, which cannot be repaired after the fact.
The second test is subtler, and I have not yet heard it discussed in public. Under Article 6 of the Paris Agreement, a tonne Tanzania authorises for sale abroad with a corresponding adjustment is a tonne it can no longer count towards its own national climate target.
Electrified rail, hydropower and mass transit are precisely the large, visible reductions the country will need for its own commitments. Tanzania should decide how much mitigation it is prepared to export, and at what minimum price, before the first letter of authorisation for a public asset is issued. For infrastructure already built, sovereign green bonds or results-based climate finance may simply fit better.
Aviation shows both sides of this trade more clearly than any other sector, and it was telling that the Tanzania Airports Authority sponsored the forum. On the supply side, airports can cut emissions through solar power, efficient terminals and electric ground equipment, and the airports still on the drawing board, the planned green airport for the Serengeti and an international Mwanza, are exactly where that thinking belongs before the first contract is signed. The volumes will be modest. The demand side is not.
Under the UN aviation scheme known as CORSIA, airlines must cancel credits carrying a host-country letter of authorisation and a corresponding adjustment. Industry forecasts put airline demand for the current phase well above 100 million tonnes, while hundreds of millions of otherwise eligible units sit waiting for host governments to sign. The scarce asset in that market is not the tree or the cookstove, but the letter, and only the state can write it.
The third test is who plays and who referees. Public institutions will submit their findings to the National Carbon Monitoring Centre, the same technical system that verifies private projects. As a member of the Centre’s board, I offer this as a point of design rather than criticism: private developers will watch whether public projects move faster or receive a larger share of authorised volumes. A published, rules-based allocation method would protect the Centre’s credibility and reassure the private capital the government rightly wants.
The fourth test is trust. Earlier this month the minister firmly rejected claims that foreign firms had been handed Tanzanian forests, and no such arrangement has been shown to exist. Yet the speed at which the claim travelled is a reminder that carbon is an invisible commodity, and markets in invisible commodities are destroyed by visible doubt. The new digital systems should therefore publish project status, issuance and community payments in a form any citizen or buyer can check.
Tanzania has done the groundwork earlier than most neighbours: regulations since 2022, a dedicated monitoring centre, a registry, and Article 6 authorisation already granted for cookstove credits. The next stage is portfolio discipline, deciding which tonnes to sell, which to keep, and which assets to finance by other means.