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Africa’s carbon markets 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 ecosystem.
According to the findings of a new report, 2025 African Carbon Market Outlook, published by the Africa Carbon Market Network, Africa is well positioned to become a global leader in carbon offsetting driven through climate mitigation and sustainable development with the right investments, governance frameworks, and technological innovations.
The report noted that Africa is in a unique position to lead the way in ensuring that carbon market growth aligns with the principles of climate justice.
It said Africa is poised to become a global leader in carbon markets with projected yearly growth of 15 per cent – 20 per cent and 30 million jobs by 2030, with revenue expected to surge to $120 billion by 2050.
The report highlighted that countries such as South Africa, Kenya, Zimbabwe, Tanzania and Ghana are leading the way in aligning their policies with global carbon pricing mechanisms. 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 are poised to attract substantial investments.
As the carbon market expands, there is increasing scrutiny of the social and ecological impacts of offset projects, as well as demand for social integrity in carbon projects.
“African countries are taking ambitious steps to establish robust frameworks for carbon markets. The strengthening of policy frameworks with the introduction of carbon taxation, integrated emissions trading systems, and setting up of national registries are all significant drivers,” said Dr Okeh Sadiq, lead author and Editor of the Carbon Free Africa Network.
Sadiq said, “We must not underestimate the challenges. There is a pressing need for greater liquidity as smaller carbon projects often struggle to gain traction due to financing constraints.
Many African nations also face technical barriers such as lack of infrastructure and expertise in carbon project development.
“The challenge is to ensure the democratisation of Africa’s carbon markets as regional integration deepens. We must provide the enabling conditions where smaller-scale projects, especially those led by local communities, and smallholder farmers can have greater access to funding and resources.”
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