8 Leading Carbon Trade Markets in Africa

The global carbon market reached a record value of $949 billion in 2023. In Africa, carbon markets offer the continent a strategic opportunity to leverage its renewable resources to generate and trade premium carbon credits, providing new revenue streams while advancing global climate goals. Set to unlock billions of dollars for climate finance and economic development in Africa, the Africa Carbon Markets Initiative (ACMI) was inaugurated at COP27 in Egypt. The initiative aims to produce 300 million carbon credits annually, stimulating $6 billion in revenue and the creation of 30 million jobs by 2030.

Kenya

In June 2023, a carbon market auction was held in Nairobi where over 2.2 million tons of carbon credits were sold, becoming the largest carbon credit auction globally. The auction was held by carbon credit trading and investment platform the Regional Voluntary Carbon Market Company and featured a mix of CO² avoidance and removal programs.

Notable carbon projects in Kenya include the Northern Rangeland Trust Carbon Project, which aims to remove 50 million tons of CO² over 30 years; the Kasigau Wildlife Corridor Project; and the Mikono Pamoja Project, which is poised to become the world’s first blue carbon project.

Gabon

In October 2022, Gabon announced the verification of over 90 million tons of carbon credits under the UN-led program to reduce emissions from deforestation and forest degradation (REDD+). These credits will be marketed by the country’s Sovereign Wealth Fund and are expected to fetch a price of between $25-$35 per credit. Gabon represents the world’s second-most forested nation and is the first country to make carbon credits available under the UN’s Framework Convention on Climate Change to counter emissions by preventing deforestation.

Malawi

Malawi’s carbon market potential is estimated at approximately 19 million tons per year. Following an evaluation implemented under the country’s Clean Development Mechanism and REDD+, the Malawian government registered 11 carbon trading projects, the majority of which focus on the distribution of improved cooking stoves.

Mozambique

With an estimated 45 million carbon credits available for trading, Mozambique became a member of ACMI in June 2023, allowing the country to participate in international carbon markets and projects. Mozambique is currently developing a plan to activate its market presence in the carbon trading sector, with a focus on establishing a regulatory framework. Estimates suggest that the country could earn between $200-$500 million per year by producing 10-25 million carbon credits.

Togo

In March 2023, Togo’s government adopted a new decree to support the country’s efforts to strengthen carbon management mechanisms and help boost carbon storage. Committed to collaborating with ACMI to scale carbon credit production, Togo is set to scale up its voluntary carbon market through the implementation of management mechanisms and certified climate action projects.

Nigeria

Last February, Nigeria’s Vice President Kashim Shettima inaugurated a committee comprising officials from key ministries and departments for the country’s ACMI-endorsed Carbon Market Activation Plan. The plan aims to support a sustainable carbon market in Nigeria worth $2.5 billion, while facilitating the implementation of policies that nurture an efficient carbon market ecosystem.

Burundi

As part of Burundi’s nationally determined contribution to reduce greenhouse gas emissions, the country aims to mitigate approximately 16.86 million tons of CO² by 2030, representing a reduction of 23% compared to a business-as-usual scenario. In July 2022, Burundi registered its first clean development mechanism under the verified carbon standard offset program, which aims to issue 82,300 carbon credits to the country’s carbon trade market.

Rwanda

Having launched its National Carbon Market Framework during COP28 in Dubai, Rwanda’s carbon market will operate on a cap-and-trade system, allowing businesses to buy and sell carbon credits. Poised to provide economic incentives for companies to reduce their carbon footprint, the framework is expected to help increase transparency and trust among carbon traders in the country.