This article was produced with the support of AUDA NEPAD
While Africa bears the brunt of climate change impacts, despite contributing merely 3.9% of global carbon dioxide (CO2) emissions, the continent is awakening to an unprecedented opportunity. Africa holds immense potential for nature-based climate solutions yet captures only 16% of the global carbon credits market – a $1.4bn industry projected to reach between $7-35bn by 2030 and potentially $250bn by 2050.
The climate contradiction
The statistics paint a stark picture of climate injustice. Africa’s average surface temperature in 2024 was 0.86°C above the 1991-2020 average, with North Africa experiencing the fastest warming at 1.28°C above baseline. The continent endured unprecedented flooding, persistent droughts and extreme heat that disrupted agriculture, education and livelihoods.
Southern Africa experienced its worst drought in two decades, with cereal yields falling 16% below the five-year average. In Zambia and Zimbabwe, yields plummeted by 43% and 50% respectively, while West and Central Africa suffered devastating floods affecting over 4m people.
Despite this climate vulnerability, Africa’s participation in global carbon markets remains dramatically underrepresented. The continent currently hosts over 100 carbon credit projects across more than 20 countries, with a collective offset capacity exceeding 90m tonnes of CO2 equivalent annually. However, this impressive project portfolio reflects concerning concentration: renewable energy projects account for 27% of activities, household devices 16%, forestry 14% and energy efficiency 13%, with nearly 90% of recent credit supply historically concentrated in just two project types – cookstoves and deforestation avoidance.
Africa has utilised only 2% of its vast nature-based solution potential monetised through carbon markets, representing one of the world’s most significant untapped opportunities for climate finance and sustainable development.
Economic transformation beyond environmental benefits
Carbon markets offer Africa far more than environmental restoration – they represent a pathway to economic transformation and social development. The voluntary carbon market’s projected growth positions Africa to capture substantial climate finance flows at a critical juncture in its development trajectory.
High-integrity African carbon markets could mobilise up to $6bn in climate finance annually by 2030, while supporting up to 30m jobs across the continent. This economic potential extends beyond pure financial returns – carbon market projects directly contribute to at least 10 of the United Nations’ 17 Sustainable Development Goals, creating synergies between climate action and development priorities including poverty reduction, food security, clean energy access and sustainable economic growth.
Current market signals demonstrate growing investor confidence. The Africa Carbon Markets Initiative (ACMI) has secured over $1bn in demand-side commitments for African carbon credits by 2030, including $650m in purchase intentions from Standard Chartered, Vertree, Nando’s, ETG and the UAE Carbon Alliance, alongside $250m in letters of intent from investors to develop high-integrity projects. Kenya’s experience illustrates the transformative potential. The country’s comprehensive Climate Change (Carbon Markets) Regulations 2024 established a national carbon registry, mandatory community benefit-sharing mechanisms and alignment with international standards, creating a framework that ensures carbon revenues translate into local development outcomes.
AUDA-NEPAD’s strategic leadership
As the premier development agency of the African Union (AU), AUDA-NEPAD serves as the continent’s primary coordinating mechanism for carbon market development. Our organisation’s comprehensive carbon markets study, presented at COP28 in Dubai, identified four fundamental barriers limiting Africa’s participation: lack of understanding about carbon market mechanisms, insufficient institutional capacity, absence of regulatory frameworks and limited access to financial resources.
AUDA-NEPAD’s response to the growth of Africa’s carbon markets has been systematic and ambitious, providing technical assistance and mobilising financial resources for climate adaptation initiatives and climate-resilient development.
Our organisation has established the Centre of Excellence on Climate Adaptation and Resilience in Cairo, serving as a hub for innovative research, knowledge generation and capacity building across the continent. Most significantly, following the 37th African Union Summit’s mandate in February 2024, AUDA-NEPAD is developing the African Gold Standard for Carbon Offsets – the continent’s first indigenous carbon market standard. This groundbreaking initiative addresses concerns about “carbon colonialism” by ensuring African ownership and control over certification processes, methodology approval and benefit distribution mechanisms.
The African Gold Standard represents more than technical innovation—it embodies a fundamental shift toward ensuring carbon markets serve Africa’s sustainable development goals.
The standard, once finalised, will incorporate food security considerations, energy access goals, poverty reduction, job creation and rural economic development alongside climate objectives, with strengthened requirements for community benefit-sharing and transparent revenue distribution frameworks.
Strategic partnerships and global collaboration
AUDA-NEPAD’s approach recognises that Africa’s carbon market transformation requires strategic partnerships across multiple scales. Our partnership with the Global Center on Adaptation focuses on the $25bn Africa Adaptation Acceleration Program (AAAP), which has already channelled over $15bn to build climate resilience for nearly 60m people.
Although climate finance flows to Africa have grown by 48% from $29.5bn in 2019/20 to $43.7bn in 2021/22, with private sector finance nearly doubling to $8bn, this growth represents only 23% of the estimated investment needs for implementing current Nationally Determined Contributions, highlighting the critical importance of carbon markets as a complementary financing mechanism.
Building momentum toward ACS-2
The Africa Climate Summit (ACS-2) in September 2025 represents a pivotal moment for showcasing Africa’s unified approach to carbon markets. Unlike previous climate summits where Africa has primarily advocated for loss and damage compensation, ACS-2 will position the continent as a solution provider and investment destination.
AUDA-NEPAD’s strategy for ACS-2 centres on demonstrating concrete progress in carbon market development. Several African countries have advanced regulatory frameworks in 2024, including Kenya, Ghana, Mozambique, South Africa, Rwanda, Tanzania, Uganda, Egypt, Senegal and Zambia, creating a foundation for coordinated continental action.
The summit will serve as a platform for launching the African Gold Standard, announcing new investment commitments and presenting bankable projects to international investors. With over 6,200 carbon credit projects registered globally in 2024 and 305m tons of credits issued, Africa’s enhanced regulatory frameworks and quality standards position the continent to capture a significantly larger share of this growing market.
The path forward
As Africa prepares for ACS-2 and COP30, the continent stands at a unique historical juncture.
The convergence of growing global carbon market demand, enhanced regulatory frameworks, increasing institutional capacity, and strategic partnerships creates unprecedented opportunities for economic transformation through climate action. The projected growth of voluntary carbon markets to $35bn by 2030 coincides with Africa’s enhanced readiness to participate meaningfully in these markets. The African Gold Standard, combined with strengthened national regulatory frameworks and AUDA-NEPAD’s coordinating role, positions the continent to capture substantial value from its natural climate solutions.
Success will depend on continued coordination between AUDA-NEPAD and member states, sustained political commitment at the highest levels, adequate financial resources to support implementation, and effective engagement with international partners and carbon market stakeholders. The measurable targets – $6bn in capital mobilisation and 30m jobs by 2030 – provide clear benchmarks for evaluating progress.
As the world grapples with the urgency of climate action and the need for massive financial resource mobilisation, Africa’s carbon market awakening represents both an opportunity and a responsibility. The continent that has contributed least to global emissions but suffers most from climate impacts is positioning itself to become a critical part of the solution – not through charity or compensation, but through mutually beneficial partnerships that drive economic development while addressing the world’s climate crisis.
The journey from Addis to Brazil will test Africa’s unity, resolve and strategic vision. But with AU’s leadership, the African Gold Standard’s promise and the continent’s vast natural potential, Africa’s carbon market revolution has begun.
The question is no longer whether Africa can participate meaningfully in global carbon markets, but how quickly the continent can scale its participation to meet both its development needs and the world’s climate imperatives.
