Op-Ed: Are carbon credits an economic goldmine or missed opportunity?

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With its vast forests, rich biodiversity and low emissions, Africa has unmatched potential in voluntary carbon markets. However, despite its advantages, the continent contributes only 2–3% of global carbon credits. Marvine Aluko, a data analyst, views this as a missed opportunity in a market projected to reach $50 billion by 2030.

• Challenges such as high certification costs, unclear policies, and limited technical capacity hinder Africa’s progress. Nevertheless, early leaders like Kenya, Gabon, Mozambique and Rwanda demonstrate what can be achieved.

• Mr Aluko says Africa must take decisive action: Establish national frameworks, enhance technical capacity, ensure fair revenue-sharing, and foster regional collaboration. While carbon credits won't solve every issue, they can stimulate climate adaptation and promote green investment.

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By Marvine Aluko

Data Analyst and Climate Finance Expert

(This article was first published on LinkedIn on May 06, 2025)

In the global climate change discourse, Africa is often portrayed as a victim, a continent bearing the brunt of rising temperatures, extreme weather events, and climate-induced food insecurity. Yet beneath this narrative lies a counterintuitive truth: Africa holds one of the world’s most potent, underutilized tools in the fight against climate change, carbon credits. 

If harnessed strategically, carbon markets could become a multi-billion-dollar economic driver for African nations. But is Africa ready to transform this hidden asset into sustainable wealth or will this become another missed opportunity?

Carbon credits are permits representing the reduction or removal of one metric ton of carbon dioxide (CO₂) from the atmosphere. These credits are sold to companies, institutions, and countries seeking to offset their emissions to meet regulatory requirements or corporate sustainability goals.

There are two main types of carbon markets. Compliance markets which are governed by laws (e.g., the EU Emissions Trading System) and voluntary carbon markets (VCMs), where companies and individuals buy offsets on a discretionary basis.

Africa’s comparative advantage lies in the voluntary market, particularly through nature-based solutions such as forestry, land restoration, climate-smart agriculture, and renewable energy projects. The continent’s vast landscapes, high biodiversity, and low industrial emissions make it ideal for generating credits that meet global sustainability standards.

According to the Global Carbon Market Survey 2023, Africa only accounts for 2-3% of the global carbon credit supply. Meanwhile, the voluntary carbon market could be worth over $50 billion by 2030, up from less than $2 billion in 2020. Why is Africa trailing in a game where it should be leading?

Key Barriers to carbon credit trade are high entry costs and complex certification standards including. Getting a project verified by bodies like Verra or Gold Standard can cost over $100,000. Lack of enabling policy frameworks is also another challenge. Most African countries do not yet have comprehensive carbon market policies or clear rules under Article 6 of the Paris Agreement. Low technical capacity and risk of greenwashing and exploitative deals.

Despite the challenges, several African countries are pioneering carbon credit strategies with tangible success. Kenya hosts over 20 active carbon offset projects, including biogas digesters, solar mini-grids, and reforestation. Burn Manufacturing, based in Nairobi, has sold over 5 million improved cookstoves, reducing emissions and improving public health. 

Gabon, on the other hand maintains over 88% forest cover, absorbing more CO₂ than it emits. In 2019, Gabon became the first African country to receive payments for forest-based emissions reductions, $150 million pledged by Norway under the Central African Forest Initiative (CAFI).

In Mozambique, the Zambézia Integrated Landscape Management Program uses Reducing Emissions from Deforestation and Forest Degradation (REDD+) to generate credits while integrating local farmers in land-use planning. The program helps communities earn income while preserving forests, combining carbon finance with poverty alleviation.

To unlock the full value of carbon credits, African governments and partners must establish clear policies, build technical and financial capacity, ensure fair benefit-sharing with communities, and collaborate regionally. Strong frameworks, skilled professionals, and equitable systems are essential to transform Africa’s natural assets into sustainable economic growth and climate resilience.

Carbon credits alone won’t solve all of Africa’s economic or climate challenges, but they can become a strategic lever for change. By linking sustainability with financial gain, African nations can fund climate adaptation, reduce poverty, and attract long-term green investments.