About
The Transformative Carbon Asset Facility (TCAF), in operation until the end of 2031, is a climate protection scheme set up by the World Bank, in which the Climate Cent Foundation and the Swiss State Secretariat for Economic Affairs (SECO) have jointly participated with a share of USD 12.5 million each since 2017. Among the other investors are the governments of Germany (USD 2 million), Great Britain (GBP 60 million), Canada (CAD 3 million), Norway (USD 80 million), Sweden (USD 25 million) and Spain. The fund has a total endowment of around USD 210 million.
The countries involved in the TCAF aim to make use of the possibility set out in Article 6 of the Paris Agreement for signatory states to cooperate on a voluntary basis. Along with Norway and Sweden, the Climate Cent Foundation plans to use the certified emission reductions achieved by TCAF-funded activities toward fulfilling national emission targets. Great Britain and the SECO, on the other hand, plan to use their resources toward climate finance, which explicitly precludes counting certificates toward national emission targets.
Current status
To date (August 2024), only one agreement has been concluded for the purchase of certificates. It was signed with the project "Innovative Carbon Resource Application for Energy Transition" (iCRAFT) in Uzbekistan. The project creates incentives for the Central Asian country of Uzbekistan to reform its energy subsidy system with the aim of reducing fossil energy use and thus carbon emissions. By 2026, the government aims to reduce energy subsidies in such a way that prices in the power and gas sectors cover costs. The funds provided by the TCAF are used to cushion the impact of rising energy prices for lowest-income households and to fund campaigns to raise awareness as to the necessity and the benefits of cost-covering energy prices.
With these reforms, over the years 2022–2027 Uzbekistan is anticipated to reduce its greenhouse gas emissions by an estimated 60 million tonnes of CO₂ in total. The verification of emission reductions achieved in 2022 was finalised in April 2024. Of the verified 3.6 million tonnes of CO₂ reductions, climate finance investors took on and paid for 500’000 tonnes.
Funding possibilities are being assessed for a handful of other activities. These are located in Egypt, Nepal, Pakistan, Thailand and Vietnam and belong to the fields of waste management, energy, transport and rice cultivation.
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