Council resolves to auction carbon credits for benefit of communities

29 Jul 2022 in Where We Govern

The City Council yesterday, 28 July 2022, resolved to auction carbon credits earned from the landfill gas (LFG) flaring activities at landfill sites around the City. LFG is a significant contributor to carbon emissions in the country. This gas, made up primarily of methane, is produced via anaerobic breakdown of organic waste in the landfill mass and is thought to have a global warming potential 25 times greater than Carbon Dioxide.

The carbon credits system is a mechanism that encourages developing countries such as South Africa to reduce emissions. Carbon credits are earned for each tonne of greenhouse gas (GHG) that is destroyed through projects that have been registered with the UN-approved Clean Development Mechanism (CDM).

A total of 241 511 credits were issued by the CDM, with a potential revenue value of R24,2 million. These credits have been generated by the Coastal Park LFG project between August 2018 to 2021. The Bellville South LFG project is expected to receive its first issuance of carbon credits in 2022, and Vissershok landfill in 2023. LFG mitigation at landfills is then expected to continue for between 10 to 15 years depending on the age of the landfill, until LFG has been depleted to levels where a project is no longer viable.

The demand for carbon credits on the South African market currently exceeds the supply by approximately 3,4 times, meaning prices are currently inflated and will likely remain so for the near future.  This favourable situation is behind the council resolution to auction the carbon credits rather than use them to offset our own carbon tax liability or retain the issued credits.

Funds from the auction will be ring-fenced to fund projects of the Urban Waste Management Directorate to reduce the health and pollution impacts of waste that will generate additional co-benefits such as job creation for communities.

‘It is encouraging to see so many years of work to develop these projects come to fruition, especially in this way where communities will benefit directly. Climate change is of real concern to the City of Cape Town given our recent experience with the worst drought on record, so I am very pleased to oversee these efforts to reduce emissions. Cape Town is once again showing it is one of the most innovative and forward-thinking among municipalities in South Africa,’ said Mayoral Committee Member for Urban Waste Management, Alderman Grant Twigg.