Introduction to the Voluntary Carbon Market in Africa

As global awareness of climate change intensifies, the Voluntary Carbon Market has emerged as a vital tool for countries to mitigate greenhouse gas emissions. In Africa, where the effects of climate change are increasingly apparent, the VCM presents an opportunity to invest in projects that sequester carbon, enhance livelihoods, protect biodiversity, and foster resilience.

While the VCM in Africa started relatively slowly — with the first credits issued on the continent dating back to 2003, compared to 1996 globally — Africa’s influence in the global carbon market has been steadily increasing. According to the Berkeley Carbon Trading Project’s Voluntary Registry Offsets Database (2024)*, the number of credits issued and retired in Africa has grown significantly between 2018 and 2024, respectively multiplying by 3 and 4 (graph below).

As a result, the share of African projects in the annual global credits issued has risen from 13.5% in 2018 to 25% in 2023. This represents a remarkable growth trajectory, as the continent increasingly attracts investment and interest from international companies seeking to offset their emissions.

* The database tracks carbon offset projects, credit issuances, and retirements across four major registries: American Carbon Registry (ACR), Climate Action Reserve (CAR), Gold Standard, and Verra (VCS).

Today, the voluntary carbon market in Africa is thriving, with projects spanning across renewable energies (wind, solar, geothermal), energy efficiency, reforestation, sustainable agriculture and community-based projects (cookstoves, clean water). The 2024 Berkeley Database suggests that more than 2,000 African projects have issued credits since the market’s inception. These projects have collectively issued 300 million carbon credits (equivalent to around $2.2 Bn**), with 151 million retired to offset emissions ($1.2 Bn). The majority of these credits have been registered under two main standards: the Verified Carbon Standard (VCS) – 66.5%, and Gold Standard – 33.5%.

Similarly to the rest of the world, the bulk of carbon credits in Africa are derived from emission reductions or avoidance (85%), with only a small proportion of credits linked to mixed credits (12%) and even fewer to pure removals (3%). This makes removal projects and Nature-Based Solutions particularly rare and attractive to investors on the continent.

In terms of project typology, the forestry and land-use sector remains dominant in Africa, accounting for 50% of the credits issued. This is primarily driven by  forest conservation projects (88%), with a lesser proportion attributed to reforestation or sustainable grassland management.

The second key sector in Africa is household and community-based projects, which represent 42% of total credits issued. These are mostly driven by clean cookstoves (78%), with other notable contributions from clean water initiatives (10%), energy efficiency programs (5.8%), and community boreholes (5.6%).

Renewable energy projects, though still limited, account for 6.5% of credits issued.

In terms of regions, East Africa leads the market, accounting for 44% of Africa’s projects, with Kenya alone representing 50% of that total. Southern Africa follows with 29%, Central Africa makes up 14%, and West Africa 12%, while North Africa contributes just 1%. Key countries with the highest number of carbon offset projects include Kenya (296 projects), Uganda (250), Rwanda (204), Malawi (131), and Madagascar (119).

**Pricing reference MSCI

The Africa Carbon Market Initiative (ACMI) is a pioneering initiative aimed at accelerating the development of carbon markets across Africa. Launched in 2023, it is part of the broader effort to support the continent’s contribution to global climate action. The primary goal of the ACMI is to create a robust and transparent carbon market infrastructure to enable African countries to tap into the growing global demand for carbon credits.

In line with this initiative, several African countries have made significant strides in establishing and refining their carbon regulatory frameworks in the past few years.

In East Africa, Kenya has introduced the Climate Change Act (2016) and completed it with the newly released Climate Change (Carbon Markets) Regulations (2024). Both documents create a legal framework for carbon trading and outlines procedures for the development of carbon offset projects. Rwanda also appears as a country favourable to carbon investors, with one of the first Corresponding Adjustments approval released globally on a carbon project.

In Southern Africa, South Africa has made notable progress with its carbon tax policy, which includes provisions for companies to offset a portion of their tax liabilities through investments in certified carbon projects (Department of Environmental Affairs, South Africa, 2019). Mozambique has also established a clear and favourable legal framework to implement carbon projects with the Decree No. 23/2018.

In West Africa, Ghana has implemented the Ghana Forest Investment Programme (GFIP), which focuses on enhancing forest management and conservation (Ghana Forestry Commission, 2019). This program supports the development of carbon credits from reforestation and afforestation projects.

The evolution of these carbon regulations is significantly impacting the landscape for carbon offset projects in Africa, encouraging other countries to also work a clearer legal frameworks and supportive policies.

Despite the positive developments, several challenges persist in the regulatory landscape. Unclear or complex regulatory requirements or heavy compliance costs are prohibitive for both project developers and investors. Small and local entities lack the expertise needed to navigate complex regulatory requirements (Huang et al., 2020).

However, these challenges also present opportunities for growth. Looking ahead, the future of the voluntary carbon market in Africa appears promising. As regulatory frameworks continue to evolve, they will likely encourage increased investment in carbon projects, enhance project credibility, and align national efforts with global climate goals.

Despite their importance and potential, there are still relatively few removal carbon projects in Africa that generate carbon credits.

Removall, committed to advancing the African carbon initiative, has been developing and investing in African carbon projects for over three years. Nearly 40% of the projects in the portfolio are based in Africa. Some of these projects have already been certified and generated their first carbon credits in 2024, including credits with corresponding adjustments. Significant investments have been made in projects in Mozambique and Rwanda, while additional opportunities are currently being developed in Tanzania, Uganda, Rwanda, Kenya, Ghana, Madagascar, and other countries.

In line with our commitment to the continent, Removall recently opened an office in Nairobi to strengthen operations, better identify new project opportunities, and improve the management of investments in the region. This strategic move will help scale up the impact and continue driving sustainable development across Africa.

It is crucial to remember that carbon offset projects in Africa are not just about environmental outcomes; they are deeply tied to development, the livelihoods of local communities and biodiversity. These projects often support the preservation of ecosystems, enhance agricultural productivity, provide clean energy, and improve health outcomes—directly impacting the lives of millions of people.

Unfortunately, at times, the ongoing debates and criticisms around carbon market integrity, and the complexities of environmental standards in developed countries can overshadow the urgent need for greater investment in Africa’s carbon projects. While these debates are important, they must not detract from the immediate need to channel more financing into projects that can deliver both environmental and social benefits. The reality on the ground is that for many African countries, the voluntary carbon market offers a rare opportunity to address both climate change and development challenges in tandem.

• Berkeley University, Voluntary Registry Offsets Database v2024-08-31. The database, developed by the Berkeley Carbon Trading Project, contains all carbon offset projects, credit issuances, and credit retirements listed globally by four major voluntary offset project registries—American Carbon Registry (ACR), Climate Action Reserve (CAR), Gold Standard, and Verra (VCS).
• Department of Environmental Affairs, South Africa. (2019). Carbon Tax Act.
• Ghana Forestry Commission. (2019). Ghana Forest Investment Programme (GFIP).
• Government of Kenya. (2016). Climate Change Act.
• Huang, J., et al. (2020). « Challenges in Carbon Market Development in Africa. » Environmental Science & Policy, 107, 89-95.
• MSCI pricing database.