Africa’s involvement in carbon markets is gaining momentum, even as global climate leadership faces uncertainty. With many African countries launching initiatives to curb deforestation and reduce emissions, the continent is striving to position itself as a potential key player in carbon trading.
However, amidst the escalating climate crisis and the urgent need for sustainable development, a crucial question looms: can carbon markets genuinely serve Africa’s interests, or do they risk becoming an avenue for exploitation?
Understanding the carbon market landscape
The carbon market operates as a trading system for CO₂ and other greenhouse gas emissions, where individuals buy and sell carbon credits to restrict emissions and address climate change, and involves two main types:
- The compliance market, which is government-mandated and legally binding
- The voluntary market, which is governed by independent standards.
Projects that generate carbon credits fall into two categories:
- Removal projects such as tree planting that actively absorb CO₂
- Avoidance projects, such as renewable energy, that prevent emissions
Independent organizations verify and issue the credits, allowing businesses to offset their carbon emissions.
Africa’s journey and data landscape
Africa’s historical contribution to global CO2 emissions is remarkably low. Home to approximately 17% of the world’s population, the continent accounts for just 4% of global CO₂ emissions. In 2024, Africa’s total CO2 emissions were around 1.399 billion tonnes, whereas China’s, for instance, stood at 11.172 billion tons.
Over 60% of Africa’s carbon emissions originate from three countries:
- South Africa with 432.2 million tonnes
- Egypt with 226.2 million tonnes
- Algeria with 156.4 million tonnes
Africa currently hosts over 100 carbon credit projects across more than 20 countries. While data on absolute volumes can be fluid, the majority of recent credits have stemmed from:
- Renewable energy (27% of capacity)
- Cookstoves (16%)
- Forestry & Land Use (including REDD+, Afforestation/Reforestation, and Improved Forest Management) (14%)
- Energy efficiency (13%)
Recent trends show a growing appetite for African credits. According to the Africa Carbon Markets Initiative (ACMI) Status and Outlook Report 2024, demand for credits from the continent rose by 11%, despite a 22% reduction in global demand. The ACMI forecasts Africa could tap an annual market worth US$6–30 billion by 2030 through reforms and strategic marketing.
How much CO₂ African projects offset
Africa is believed to have a huge potential to offset carbon dioxide, particularly due to its forests, which can absorb billions of tons of CO2 annually. The Congo Basin rainforests alone have the potential to absorb 1.2 billion tons of CO2 every year.
Other ongoing projects are already contributing to reducing emissions. For instance, BURN Manufacturing, a leading clean cookstove company operating across Africa, reports having reduced over 50.9 million tons of CO₂ through the distribution of more than 5.4 million cookstoves across 20+ countries.
The ACMI’s target of retiring 1.5-2.5 gigatons of CO₂ annually by 2030 further illustrates the immense potential for large-scale carbon sequestration and avoidance in Africa.
Top African countries leading in VCM activity
Several African nations are at the forefront of the Voluntary Carbon Market (VCM). Although there is no aggregated data, online sources allow the following countries to be noted as the top five.
1️⃣ Kenya accounts for about 20% of Africa’s total carbon credits, being the continent’s leader. It hosted the world’s largest carbon credit auction in 2023, selling over 2.2 million tonnes of carbon credits.
2️⃣ Zimbabwe generated 4.2 million carbon credits in 2022. In six months of 2024 alone, the country issued 519,590 carbon credits worth some US$3.39 million. The country has implemented a major REDD+ project covering over 800,000 hectares of forest.
3️⃣ Gabon, whose territory is almost 90% covered by forests, became the first African country to receive sovereign-level payment for preserving its rainforest under the mechanisms of the United Nations Framework Convention on Climate Change. Moreover, in 2022, it held one of the biggest carbon credit sales, reportedly raising more than US$2 billion.
4️⃣ Nigeria aims to issue up to 30 million carbon credits annually by 2030, under the ACMI initiative. The move is expected to drive US$500 million into the country’s budget annually.
5️⃣ Tanzania announced plans in 2023 to secure US$20 billion in investments in carbon credits by foreign companies but by July 2024, it had only managed to collect US$13.4 million, arousing criticism of mismanagement.
Projects demonstrating potential
Ghana – Jurisdictional REDD+ (A Model for Equitable Sharing): Ghana’s government has engaged in a World Bank Forest Carbon Partnership Facility program to reduce deforestation across specific jurisdictional areas. In 2023, Ghana received US$4.8 million as the first tranche of payments for verified reduced deforestation, with a vital aspect being that nearly 70% of these funds are earmarked for local communities. This funding is being disbursed directly to support healthcare, agriculture, and water projects in participating villages.
Kenya – Kenya Agricultural Carbon Project (KACP) (Agroforestry & Soil Carbon): Launched in 2009 in partnership with the World Bank’s BioCarbon Fund, KACP empowers 30,000 smallholder farmers across 22,000 hectares in Kenya’s Nyanza and Western Provinces. It focuses on Sustainable Agriculture Land Management practices, including agroforestry (planting trees alongside crops), cover cropping, and composting. This was the first project in Africa to store carbon dioxide in both trees and soil, pioneering a model that compensates smallholder farmers for their environmental services. The project generates carbon credits verified by Verra’s Verified Carbon Standard.
Displacement and harm
While well-managed carbon projects can attract investment, create jobs, and fund local needs such as clean energy and forest restoration, on the other hand, carbon trading comes with a number of challenges, which in many cases discourage regions partaking in it.
- Numerous cases of forcible displacement have been documented since the implementation of carbon offsetting projects has intensified. The Ogiek community in Kenya’s Mau forest was forcibly evicted, and their homes were destroyed. In Uganda, the implementation of REDD+ initiatives reportedly led to the displacement of 8,000 people. In the DRC, families were evicted to make way for a Total Energies offset project.
- Local communities have repeatedly complained that carbon projects undermine development by limiting access to land, rivers, and forests without consulting them, and worsening food security.
- Carbon offsetting projects seem to have gained a reputation for enriching outsiders to the detriment of locals through mismanagement, undervaluation, etc. The African Development Bank noted that foreign companies pay just US$1-3 per ton of carbon offsets, whereas in the EU market, for instance, one ton is worth at least 200 euros. Additionally, local communities often receive only a tiny fraction of the benefits.
Key recommendations for Africa:
1️⃣ Full community consent: Genuine, prior, and informed consent from local and indigenous communities is non-negotiable for any land-based carbon project. According to the World Bank’s Environmental and Social Standard 7, communities should be able to say no when projects affect indigenous land or livelihoods.
2️⃣ Strong additionality and permanence: Projects have to deliver real, new impacts that would not have otherwise occurred. Carbon reductions must be verifiable and long-lasting. Pedro Moura Costa, a respected carbon‑credit scientist and IPCC lead author, has long emphasized rigorous integrity around additionality, leakage, monitoring, and permanence.
3️⃣ Fair and transparent benefit-sharing: The UN University’s UNU‑INRA panel warns of “justice deficits” and calls for community ownership and equitable revenue distribution. Clear mechanisms are needed to ensure that a significant portion of carbon revenues directly benefits local communities, funding essential services and alternative livelihoods.
4️⃣ Robust national regulatory frameworks: African nations need to establish and enforce their own stringent standards for carbon projects, including national registries and independent oversight. Dr. Hanan Morsy of UNECA calls for data integrity, clear rules, and revenue-sharing requirements so that carbon finance benefits communities, not just the intermediaries.
5️⃣ Prioritizing indigenous solutions: African countries should define their climate goals based on their own sustainable development priorities, focusing on internal green solutions (e.g., 100% renewable energy transition) rather than solely relying on offsets to compensate for the emissions of others. Climatologist Fatima Denton has urged an end to an overreliance on carbon trading and more investments in local clean energy and resilience.
6️⃣ High-integrity partnerships: Engaging with partners committed to high-standard credits (like LEAF’s $10/ton floor) and robust social and environmental safeguards are vital. African Business Corporation’s CEO, Samaila Zubairu, cautions that Africa must present its natural capital with stronger negotiation power and avoid undervaluing its resources in low-grade offset deals.
