NDF - Financing for climate change and development projects

NCF: Sustainable Charcoal Business Development in Tanzania [NDF C3 D15]

Checking the fire level in the kiln. Photo: Paula Tommila
Crushing the char powder. Photo: Paula Tommila
Drying produced bio briquettes. Photo: Paula Tommila
Briquette extruder. Photo: Paula Tommila
Setting up the kiln. Photo: Paula Tommila
6.10.2017
The project aimed to reduce deforestation, mitigate greenhouse gas emissions and support local livelihoods by introducing sustainable non-wood based charcoal businesses in Tanzania.

Tanzania
Sustainable Charcoal Business Development in Tanzania
Ref: NDF C3 D15

Nordic Partner: Gaia Consulting Oy
Local Partner: Appropriate Rural Technology Institute - Tanzania (ARTI Tanzania)
Other Partners: n/a
Total Project Cost: EUR 373,036
NCF Financing: EUR 259,250
Agreement Signed: 28 June 2013
Project Classification: Mitigation (with some adaptation benefits)
Duration: 37 Months (completed)

Project Objective

The overall objectives of the project were to contribute to the reduction of deforestation and greenhouse gas emissions in Tanzania through decreasing the need for unsustainable wood in energy production, and to support local livelihoods in creating environmentally, socially and economically sustainable energy businesses. The project has achieved its objectives by establishing and introducing a sustainable business model for community-based non-wood charcoal briquette producing enterprise: Charcoal Briquettes Tanzania Ltd (CBTL).

Description

The project has reduced deforestation, mitigated greenhouse gas emissions and supported local livelihoods by introducing sustainable non-wood based charcoal businesses in Tanzania utilizing renewable biomass residues.

The direct final beneficiaries of the project have been people gaining new business skills, jobs and income generating opportunities. 27 permanent green jobs and income opportunities to 30 small businesses where created during the project implementation. In addition, the project has also benefitted the end-users in regard to improved air quality. The project has trained 782 people (725 in char powder production and 27 in business and production), offered 27 permanent green jobs and created income opportunities to 30 small businesses. The total additional income for the char powder producers generated through briquette production amounted to EUR 15,300.

334 women (46% of total) were trained in char production, hence empowered to generate additional income. Women are engaged in all aspects of CBTL’s operations and value chain from production to sales and marketing, allowing livelihoods improvements and empowerment in line with gender equality. Furthermore, the end-users’ exposure to harmful indoor air pollutants and respiratory problems caused by them has decreased due to the project. Generally more women than men have profited from these benefits.

Relevance for Climate Change

The emissions from land-use change in Tanzania represent some 90% of the total greenhouse gas emissions of the country.  The project has contributed to climate change mitigation by reducing deforestation through replacing unsustainable wood charcoal with charcoal briquettes produced from agricultural and other biomass waste. Over the implementation period the project achieved has reduced the use of traditional charcoal by 120 tonnes, generating direct emission reductions of 1,300 tCO2e. Over an assumed life time project will contribute to a total reduction of 110,000 tonnes CO2e, including direct emission reductions of 30,000 tCO2e (3,000 tCO2ea) based on gradual production increase over the next 10 years for the machinery installed by NCF funding, and 80,000 tonnes CO2e of indirect emission reductions.

Innovation and Knowledge Transfer

The innovativeness of the project lies primarily in recognizing the possibility of utilizing existing market and societal structures in creating a new value chain that can be viable in and of itself. The sustainability of the climate benefits, and in particular the upscaling potential, is interlinked with the viability of the business benefits. In a manufacturing environment, identifying opportunities to harness economies of scale are essential. People buy into a brand, not necessarily into a business or business model. The creation and development of an attractive and sustainable brand is crucial for success in charcoal briquette manufacturing and sales.

Building partnerships with solid, locally established businesses presents multiple advantages. Clear and active communication between project partners is critical for success. Bankability contains the key for securing future funding. This means that the path to profitability must be developed already during a demonstration phase. Ability to secure a steady and high quality supply once demand increases, is critical for upscaling efforts.

More information

Gaia Consulting Oy
ARTI Tanzania