09/04/2026
Ethiopia Unveils Forest Carbon Trading Framework, Opening New Market for Climate Finance
Mar 30, 2026
Ethiopia has established a comprehensive legal framework for forest carbon credit trading, setting rules for the registration, verification, and transfer of carbon credits generated from forest conservation and reforestation activities, according to a directive issued by the Ministry of Agriculture.
Forest Carbon Trading Directive No. 1122/2025, which took effect in December 2025, creates a structured system for landowners, communities, and project developers to generate and trade carbon credits—each representing one metric ton of carbon dioxide emissions reduced or removed from the atmosphere through forest-based mitigation activities.
The directive identifies six eligible mitigation activities for carbon credit generation: reducing deforestation, reducing forest degradation, afforestation, rehabilitation of degraded lands, sustainable forest management, and other forest-related activities to be specified by the Ethiopian Forestry Development. Carbon credits may be generated either through registered Forest Carbon Credit Projects specific local initiatives with defined boundaries or through Jurisdictional Forest Carbon Credit Programs led by regional or national authorities.
Under the directive, all forest carbon credit projects and jurisdictional programs must register with the Ethiopian Forestry Development and obtain a certificate before commencing operations. Project registration requires documentation including a project plan with geo-referenced maps, legal contracts with forest carbon credit owners, letters of support from regional bureaus, and landholding certificates for the project area.
Crucially, the directive establishes that forest carbon credit owners retain the right to transfer ownership of credits to third parties, while the Ethiopian Forestry Development manages the transfer of credits generated under jurisdictional programs.
