The DRC must put in place a regulatory framework for carbon markets to secure funding for implementation of climate action and sustainability projects

Noel Casserly & Phil Malula – July 2025

Background

Many African countries now recognise that carbon credits offer a significant opportunity to boost climate finance and build resilience. African countries such as South Africa, Kenya, Zimbabwe, Tanzania and Ghana are leading the way in aligning their policies with global carbon pricing mechanisms. Countries such as Ghana, Kenya and Zimbabwe are putting in place bilateral cooperation agreements with European Governments on the use of carbon credits under Article 6 of the Paris Agreement.  The EU has just taken the first steps to opening up the opportunity for the use of international carbon credits for compliance with EU emission reduction targets. The time is right for the DRC to put in place institutional and governance arrangements for the operation of high-integrity carbon markets.

Projected growth of African Carbon Markets

The Paris Agreement introduced a new system under Article 6 to improve the way international carbon credits (ITMOs) work. This system includes rules to avoid double counting, ensure credits are real, and improve transparency. The rules for the use of International Transferable Mitigation Outcomes (ITMOs) were finalised at last year’s Climate Conference of the Parties (COP) in Baku.

Many African countries now recognise that carbon credits offer a significant opportunity to boost climate finance and build resilience. They argue that the generation of credits in areas where they are in high demand, will support the protection of tropical forests and ecosystems. 

The African Carbon Market Outlook 2025 (ACMO25), which was published in May 2025 by the Africa Carbon Market Network concludes that Africa's carbon markets, both for voluntary and compliance carbon credits, are expected to see rapid expansion in 2025 and succeeding years underpinned by the continent's extensive natural resources and ecosystems. Equally important for African carbon markets is the demand for social integrity in carbon projects. As the carbon market expands, there is increasing scrutiny of the social and ecological impacts of offset projects. Africa is in a unique position to lead the way in ensuring that carbon market growth aligns with the principles of climate justice. 

ACMO25 concludes that with these systems in place, Africa is poised to become a global leader in Carbon Markets with projected annual growth of 15% -20% and 30 million jobs by 2030, with revenue expected to surge to $120 billion by 2050. With the African carbon market currently valued at $2.4 billion, projections show it could double in the next decade, thanks to increasing global demand for voluntary and compliance carbon credits.  By 2030, up to 300 million credits could be issued. By 2050, that number could reach 1.5 billion, generating $6 billion in revenue.

Focus on High-integrity and Climate Justice

The private sector's interest in Africa's carbon markets is an undeniable trend for 2025. International companies, climate finance institutions, and development banks are heavily investing in Africa's carbon offset projects. Key sectors such as renewable energy projects, sustainable agriculture and forest conservation and expansion are poised to attract substantial investments. But the focus must be on high-integrity and climate justice when putting in place the policy and governance frameworks. The importance of smaller scale projects led by local communities must be recognized and the need for increased scrutiny of social and ecological impacts. Prof concluded by outline the potential for Africa to become a global leader in carbon markets, but with a focus on climate justice.

Africa’s success depends on building robust governance structures. These must include: Transparent benefit-sharing mechanisms, Strong policy and regulatory frameworks, Environmental and social safeguards, Long-term data and impact monitoring systems.

Revised EU Emission Reduction Targets

The recent announcement by the European Commission that it will allow EU member states to make limited use of international carbon credits to meet their emission reduction targets will give a boost the market for compliance credits. At the end of May the European Union advised that it is on track to reach its 2030 climate targets. The European Commission expects greenhouse gas emissions to fall by 54% by 2030 compared to 1990, very close to its 55% target following an analysis of member states' energy and climate plans for the coming year.  But some Member States within the EU are facing a much bigger challenge to meet emission reduction targets as part of the EU’s effort sharing decision.  For example, Ireland’s Environmental Protection Agency most recent emissions, report, published at the end of May, concludes that even with the best-case scenario, and using available flexibilities, Ireland simply will not meet its EU target based on all the additional climate policy measures outlined and planned by the Government.  The latest greenhouse gas emissions projections from the EPA indicate that emissions would fall by up to 23% by 2030 if every climate policy and measures currently planned by the Government is fully implemented on time.

On the 2nd July the European Commission proposed a target of 90% reduction in net greenhouse gas emissions by 2040 compared with 1990 levels. However, some flexibility is now introduced whereby up 3% of the target can now be met by relying on Article 6 international carbon credits.

Wopke Hoekstra, the EU Climate Commissioner, has made a strong case for the use of high-integrity carbon credits as a means of generating emission reductions to meet future targets, as well as much needed finance for climate action and sustainability projects in developing countries.   Some EU countries are moving ahead anyway. Sweden has signed bilateral cooperation agreements on Article 6 with Kenya and Zambia. Norway has also signed a cooperation agreement with Zambia and Switzerland has signed a cooperation agreement with Ghana.

An Opportunity for the DRC

Ghana, Tanzania, Uganda and Zimbabwe have all put in place governance and institutional frameworks to support the implementation of carbon markets.  The DRC which has a huge wealth of natural resources and precious eco-systems can take lessons on best practice elsewhere in Africa to secure the much needed investment to protect and these resources and enhance livelihoods but also contribute to global goals on climate action and sustainability.

Noel Casserly is a consultant and advocate on climate action and sustainability and is a Board member of Avenir Vert.  He is the founder of SmartEarth consultancy. He worked with Irish Government for 30 years where he led the Irish delegation to UNFCCC. He has been nominated to the UNFCCC roster of Climate Experts by Irish Government.

Phil Malula is the founder and CEO of Avenir Vert in DRC.  He is project lead on a climate resilient agriculture, water- energy programmes in DRC.  He facilitates project partnership with Pegasus Capital Advisors, the DRC government and UNDP, Producers Trust and other partners in the DRC