Switzerland strikes a significant carbon credit agreement with Ghana's Wahu Mobility
In a groundbreaking move, Ghana has struck a carbon credit deal with Switzerland, marking the first-ever African bilateral carbon credit transaction of its kind and the largest globally in volume. This deal, involving the transfer of 11,733 tonnes of verified emission reductions under Article 6.2 of the Paris Agreement, is set to have significant implications for the global e-mobility sector and Africa's role in the carbon market.
The deal highlights Ghana's commitment to clean transport technologies, as electric mobility through bicycles is one of the key projects authorized under this carbon trading deal. This move demonstrates how carbon finance can directly support the adoption of clean transport solutions in Africa.
The project financing enabled by the carbon credits incentivizes the scaling up of low-emission mobility solutions. This can contribute to reducing urban air pollution and dependency on fossil fuels, thereby improving the overall quality of life in Ghana's cities. The success in Ghana may encourage other countries to follow suit, integrating e-mobility projects into their carbon credit programs, thereby increasing investment flows and technological diffusion in this sector globally.
For Africa, Ghana becoming the first African country to issue carbon credits compliant with the Paris Agreement sets a precedent and blueprint that could accelerate the development of carbon markets across the continent. This deal may catalyse significant financial investment in African climate projects, with Ghana's carbon market estimated to attract US$1.1 billion by 2030, creating thousands of green jobs.
The emphasis on building local capacity, especially youth skills in carbon market participation, highlights a sustainable approach to embedding Africa within global carbon finance ecosystems. Ghana's experience, combined with ongoing bilateral agreements in countries such as Senegal, Malawi, Tunisia, and Kenya, suggests growing African leadership and engagement in international climate cooperation and carbon trading mechanisms.
The deal could accelerate Africa's role in the global carbon market while enabling cleaner transport solutions for thousands of local delivery riders. Ghanaian electric bike startup Wahu Mobility, which plans to deploy 117,000 e-bikes over the next five years, is poised to become a carbon finance leader on the continent. If Ghana can maintain rigorous standards and successfully execute its early deals, it could continue to be a carbon finance leader on the continent.
Switzerland, aiming to cut emissions by 65% by 2035 (vs. 1990 levels), is one of the key buyers in this deal. The project targets 752,684 tons of CO2 equivalent in avoided emissions by 2030. Much of Switzerland's carbon credit buying is done through the Klik Foundation, funded by Swiss fuel importers. Klik is developing 12 projects in Ghana worth up to $1.1 billion in investments.
The deal took two years to get validated and approved by both countries. CEO Valerie Labi stated that this authorization marks a pivotal moment for Wahu Mobility and Africa's e-mobility sector. Layla Khanfar, a research associate at BloombergNEF, emphasized the need for establishing integrity in the Article 6 carbon market to unlock demand from corporate buyers and governments. Ghana aims to sell 24 million tons of CO2 credits under Article 6, and these avoided emissions will be packaged into carbon credits (ITMOs) and sold to Switzerland.
Michael Abrokwaa, Klik's Ghana GM, stated that the deal will accelerate the energy transition by bringing in technologies that wouldn't have happened in the next five years. Ghana has recently set up a carbon registry and approval committee to position itself as a key Article 6 hub. This development underscores Ghana's commitment to playing a significant role in the global carbon market and contributing to the global fight against climate change.
- The carbon finance from this deal is directly supporting the expansion of environmental-science projects in Africa, particularly the adoption of clean technologies in the transport industry.
- The success of Ghana's carbon credits in the global market could attract substantially more finance for industry and science, contributing to the advancement of climate-change mitigation efforts across the continent.
