In a groundbreaking move for the African continent, Kenya’s BURN has successfully sold the first-ever carbon credit futures tied to emissions reductions achieved through the deployment of efficient cook-stoves. The company, renowned for manufacturing and distributing over four million environmentally friendly cook-stoves across Africa, marked this significant milestone by selling 10,000 forward contracts at $25 each and 50,000 call options through CYNK, a Nairobi-based platform.
The forward contracts and call options, as detailed in a joint statement released by BURN and CYNK on Monday, are poised to play a pivotal role in promoting sustainability and combating climate change. The call options can be exercised at the same $25 price point over the next seven years.
BURN’s forward contracts are intricately tied to the distribution of electric induction cookers to low-income households in Ghana. These innovative cook-stoves not only enhance cooking efficiency but also contribute to environmental conservation by eliminating or significantly reducing the reliance on firewood or charcoal, consequently curbing deforestation and mitigating greenhouse gas emissions and health-damaging soot.
Notably, each carbon credit issued by BURN represents the removal or prevention of one ton of climate-warming carbon dioxide or its equivalent. This signifies a tangible and quantifiable impact on reducing the carbon footprint, aligning with global efforts to address climate change.
BURN’s initiative demonstrates a commitment to integrating sustainable practices into its business model and leveraging financial instruments to further its environmental impact. The move aligns with the company’s broader mission of providing clean-burning wood and charcoal stoves across the continent.
In a separate development also facilitated by CYNK, the Tamuwa Renewable Biomass Project made strides in the carbon credit market by selling 800,000 call options at a strike price of $10. This complements the 2.2 million forward contracts tied to Tamuwa’s project, which were successfully sold in September.
As Africa takes a pioneering step in embracing carbon credit futures, these initiatives highlight the growing intersection of environmental consciousness and financial innovation. BURN and Tamuwa’s endeavors underscore the potential for businesses to drive positive environmental change while creating economic value through forward-thinking approaches to carbon credit trading. The success of these ventures serves as an inspiration for others across the continent to explore similar sustainable business practices and contribute to a greener, more resilient future.
