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- Four trends ready for take-off in Africa’s green economy
Four trends ready for take-off in Africa’s green economy
Looking ahead at the start of a new year is predictable fare. But we do it a little differently. Here is our take on 2024
1.🚁 Heli view: What will happen next in Africa’s green economy
Media loves to predict the future – but of course knows no better than anyone else.
We won’t play that game – of throwing darts in the dark.
Much better to look at how existing trends might evolve.
Most change is gradual rather than out of a clear blue sky.
A. Electric motion takes off on African roads
The EV market achieved a breakthrough in 2023. Several manufacturers opened assembly plants on the continent, bringing down consumer prices. The focus is on buses and electric motorbikes.
Kenya talks of going from 2,000 electric motorbikes to 200,000 by the end of the year. Along with Rwanda, it also saw the introduction of electric buses on regular public routes. South Africa's electric vehicle (EV) adoption has surged by 127%, and the country is set to produce its first EV in 2026.
This paves the way for rapid expansion. The sector has reached a tipping point. But this does not currently apply to cars or electric bicycles, which remain neglected.
B. Pain in the carbon markets is not yet over
The setbacks of last year have not run their full course. Several scandals were reported in newspapers, some in Africa, kicking off heated debates that have yet to cool down. Criticism is still getting louder. Watch for mentions of green colonialism and “blood carbon” (akin to blood diamonds).
The impact on carbon markets will be significant. Trust and credibility suffered a big hit last year that won’t be repaired quickly. By some estimates, deal volume was down by more than 50% for some developers. A recovery is not yet here. And indeed there are problems with monitoring and verification. Still, the carbon markets retain core elite support. John Kerry said at COP28 that carbon markets are needed.
Further minefields loom in the cookstove sector, which relies heavily on carbon markets, as new (tougher) standards are set. On the plus side, biodiversity markets will likely gain independent standing adjacent to carbon markets.
C. Hello to realism in green hydrogen, minerals and industrialisation
Last year saw extraordinary growth in African announcements of green industrial projects. With the pipeline of new ventures now somewhat cleared, attention will turn to what’s actually achievable.
This is no bad thing for the serious players. Robust scrutiny will only strengthen them. South Africa, Morocco and Egypt do have the knowhow to land highly complex projects.
But the lightweights will be shown up. Mauritania is not the most obvious place to have a green hydrogen hub as announced some months ago.
D. Oldies but goldies: Tired solar and mini-grids are powering up
When lots of new money arrives in a complicated place such as Africa’s green economy, tried and tested solutions get new, even outsized attention. New money is conservative. It’s looking for relatively safe bets.
This benefits solar and mini-grids. Their tech is mature. Solar in particular has seen many ups and downs over the decades. It appears we’re now looking at a new upswing in Africa alongside mini-grids.
Cost reductions have helped. Prices at Chinese factory gates keep on tumbling. But a new global climate focus on the continent is the bigger driver. The new money needs to go somewhere… somewhere that’s easy to understand for newcomers.
2. Aviation is climate’s frontier but not yet ready for take-off
Africa will hear a lot more this year about cleaning up emissions from planes. And the first solutions are being trialled.
What’s trending: The continent has the fastest growing aviation sector in the world.
Why it matters: Aviation currently generates 3% of global CO2 emissions.
As other sectors reduce carbon footprints, aviation becomes a more prominent target.
The challenge: Jet engines require high-performance fuel that’s also light-weight.
So far, there is no direct substitute for kerosene.
Hydrogen alternatives still take up too much space on planes.
Batteries are too heavy to be used effectively without major redesign.
Innovative solution: Something called Sustainable Aviation Fuel (SAF) is however taking root.
It cuts CO2 emissions by up to 80% throughout its lifecycle.
And seamlessly blends with regular jet fuel, so can run as a hybrid.
New fuel: SAF is made from diverse feedstocks using various production techniques:
Reclaimed cooking oils or plant oils
Biomass or waste materials processed into liquid hydrocarbons
Renewable alcohols like ethanol or butanol
Other biomass sources processed via thermochemical or biological routes
The downsides: SAF costs are 3-5 times higher than fossil fuel and current feedstock availability is limited.
Proponents remark that the solar industry faced similar issues a generation ago – before prospering. Commercialisation takes time.
More research and innovation will lower costs and boost efficiency, they suggest.
African angle: In recent months, several SAF projects have sprung up on the continent.
Zimbabwe announced cooperation plans with the EU and others to pioneer SAF production by 2030.
Germany's AIREG will champion the use of SAF in South Africa.
A research study by WWF says South Africa has the technical potential to produce up to 4.5 billion litres of SAF annually, following strict sustainability requirements.
Aerospace startup Cloudline raised $6 million to realise carbon-free aviation in South Africa.
Competitive advantage: Proponents suggest Africa has vast potential to generate SAF feedstock, given unused potential in agriculture.
But boosting production would require major investment as well as new regulations to attain high-quality feedstock.
Even proponents say this is a multi-decade undertaking and unlikely to yield quick gains.
The controversy: Views differ whether a food-insecure continent – which Africa will remain in the climate era – should use its agricultural land to power planes.
Higher demand for land and harvested grains would push up food prices.
The result could mean a redistribution of wealth from poor to rich.
Alternatively, SAF production could boost job growth in industrial farming.
Environmental concerns: Beyond humans, SAF may also impact the climate negatively.
Expanding intensive agricultural land use will lead to further deforestation, hit water tables and create biodiversity loss.
Current SAF production, particularly from corn, uses more energy than it replaces.
In sum: The aviation sector will eventually end fossil fuel use like every other industry. But whether African agricultural products are the best alternative remains to be proven.
3. Q&A: Climate leader with answers
Faith Temba is Sourcing Manager Africa at Climate Impact Partners, where she identifies low carbon projects and organisations to bring high-quality carbon credits to the voluntary carbon market. She hosts the first episode of a new podcast called “Ambition To Impact”.
Q: What makes you proud in relation to climate change? A: Climate change hasn’t yet been fully addressed, so it’s more of an incremental process. When I see progress, I feel proud. When my first project achieved registration, we opened a champagne bottle. It was a lake Turkana wind project and my first glass of champagne.
Q: What is the most impactful tool against climate change? A: Our CEO says: it’s a tool box. This problem is so significant, we need all hands on deck. Wherever you are, whenever and however you can, do something. I’m part of one of the options, which is the voluntary carbon market.
Q: And within Climate Impact Partners? A: Partnerships, working alongside entities who are doing something. Helping corporates find quality projects and on the other side, partnering with suppliers to help them raise funds. Working alongside these various entities really has the biggest impact.
Q: What do you tell people who say Africa can leapfrog straight into a fully decarbonised economy? A: Africa is big and very nuanced. There are opportunities to develop on a cleaner path. Hence the Nairobi Declaration. But I would also challenge that to say there is a lot required to support the positive growth narrative in terms of capital.
4. Media monitoring
Farmers first: AfDB initiates a $1 billion fund to protect African farmers from climate change.
Getting exposure: The IFC invests $20m in equity in sustainable infrastructure development.
Pioneers: RMB invests in Koko Networks to fuel innovative carbon financing solutions.
Infrastructure: Emerging Africa Infrastructure Fund raised $294 million.
About time: One of the world's largest hybrid solar and battery storage facilities was installed by Scatec in South Africa.
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Thanks to the Green Rising team for putting this together.