In Cambodia, charcoal consumption by households and restaurants represents an annual market of 85 million USD as well as one of the main drivers of forest degradation. Every year, more than 1.6 million tonnes of wood are overharvested, representing the emission of 3 million tCO2e. With socio-economic projections indicating no decrease in consumption in the coming decades, charcoal pressure on Protected Areas will continue to increase, threatening the achievement of the INDC that aim to increase and maintain forest cover at 60%. Currently several economic and regulatory barriers prevent the shift to sustainable charcoal production. Not only non-sustainable charcoal producers do not pay the environmental cost of forest degradation, but they also benefit from an indirect subsidy through a de facto VAT exemption making sustainable charcoal not competitive on the market without direct or indirect external subsidy.
The Ministry of Environment (MoE), responsible for both coordinating the Climate Change response of Cambodia and the management of Protected Areas, is willing to tackle this issue by leveraging private sector investment in sustainable charcoal production, and supporting the conversion of existing producers to sustainable practices.
From objectives to actions
Since May 2015, the General Secretariat for Sustainable Development (GSSD) and GERES have been collaborating together to develop a NAMA (Nationally Appropriate Mitigation Action) on sustainable charcoal and solid biomass fuels to leverage private sector investment, support forest restoration in Protected Areas, and invest in switch towards sustainable practices for traditional producers.
Through this NAMA, the MoE ambitions to tackle the current informal subsidy on non-sustainable charcoal by exempting sustainable producers from VAT, and to progressively increase sustainable charcoal competitiveness by collecting fees on non-sustainable charcoal trade. This domestic financing stream will provide the MoE with the long-term means to accompany the conversion of traditional producers to more sustainable technologies and practices. In the meantime, the Protected Areas buffer-zone will need to be restored to enable the development of sustainable charcoal centers with high-efficiency charcoal kiln technologies. The NAMA will accelerate this transformation by bridging the profitability gap of sustainable charcoal initiatives through result-based subsidy during the transition period.
Project name: NAMA on Sustainable Charcoal Value-Chains in Cambodia
Location: Cambodia, nationwide
Duration: 2 years (2015-2017)
- General Secretariat for Sustainable Development (GSSD) – Ministry of Environment (MoE)
- UNEP-DTU Partnership