Ethiopia has moved to formalise its entry into global carbon markets, unveiling a directive that establishes ownership, trading rights and regulatory oversight for carbon credits. The move positions the country among a growing number of African nations building legal frameworks for climate finance.
The framework lays out how carbon credits generated from forests and land-based projects can be owned, registered and sold.
Officials say the directive gives legal recognition to carbon as a tradable asset, allowing individuals, communities, and investors who protect or develop forests to claim ownership and transact credits in regulated markets.
The policy establishes that carbon credits must be certified under international standards and registered through designated national institutions, with oversight from agencies such as the Ethiopian Forestry Development. It also introduces obligations for project owners, including maintaining forest integrity and preventing activities that reduce carbon stock.
The move is part of a broader push by Ethiopia to operationalise its carbon market ambitions. The country is simultaneously developing a national carbon market strategy (2025–2035) and a comprehensive legal framework aimed at enabling participation in both voluntary and compliance carbon markets under Article 6 of the Paris Agreement.
Government officials have indicated that the country is working toward full carbon market legislation and could issue millions of credits tied to emissions reductions and forest conservation projects.
The new directive also outlines benefit-sharing arrangements, allowing local communities living near carbon projects to receive a portion of revenues, while federal and regional governments retain a stake in proceeds from carbon transactions.
Experts say the framework is designed to unlock climate finance and attract private investment into sectors such as forestry, renewable energy, and land restoration, helping Ethiopia meet its long-term emissions reduction targets and transition to a low-carbon economy.
Ethiopia’s move reflects a wider trend across Africa, where governments are racing to regulate carbon markets amid rising global demand for offsets. Kenya has introduced carbon market regulations under climate change laws, including systems for project approval, benefit sharing, and national registries.
On its part, Ghana has developed institutional frameworks aligned with Article 6 to govern carbon credit transactions and ensure environmental integrity, while Nigeria has also signaled plans to establish a national carbon registry and regulatory structure, with South Africa operating one of the continent’s most advanced carbon pricing systems through its carbon tax regime, complemented by offset mechanisms.
Rwanda and Uganda are developing guidelines to attract investment into nature-based carbon projects, particularly in forestry and conservation.
Analysts say the emergence of these frameworks marks a turning point for Africa’s role in global carbon markets, with countries seeking to balance investor confidence, environmental integrity, and equitable benefit sharing.
