Rwanda's Carbon Market Performance

Rwanda's Role in Africa's Carbon Market Expansion

Rwanda has emerged as a key player in the carbon market landscape across Sub-Saharan Africa, with significant investments and initiatives aimed at reducing greenhouse gas emissions. According to the State of Africa’s Environment Report, released on September 18, the country ranks among the top five regional nations investing in carbon market projects. This report highlights the growing importance of carbon markets in addressing climate change and mobilizing climate finance.

Carbon markets function as trading systems where carbon credits—each representing one tonne of reduced or avoided emissions—are bought and sold. These credits allow companies or individuals to offset their emissions by purchasing from entities that have successfully reduced or removed emissions. Countries like Rwanda are leveraging these markets to attract investment and support climate action through financial mechanisms.

The report outlines eight key topics, including extreme weather events, climate-induced migration, food security, water, disease burden, climate debt, carbon trade, and climate adaptation. Among these, carbon trade is gaining momentum as a critical tool for environmental sustainability.

According to the report, Rwanda holds a 6% share in the regional project capital expenditure, placing it among the top five countries. Other notable contributors include Ghana (9%), Malawi (10%), Nigeria (10%), and Kenya (24%). The remaining Sub-Saharan region accounts for 41% of the investment. By 2024, Africa had approximately one-fifth of the carbon credit projects listed in top carbon market registries. Between 2013 and 2023, about $5.9 billion was invested in carbon projects across Sub-Saharan Africa, highlighting the region’s growing engagement with carbon markets.

Most carbon credit projects in Africa are concentrated in two main areas: forestry and land use, and community-based initiatives such as improved cookstoves. These projects play a vital role in reducing emissions while promoting sustainable development.

Rwanda has been particularly active in this space. The country registered 60 cookstove projects, generating 8,470,992 carbon credits. As of May 2025, 124 million carbon credits had been issued to 444 cookstove-based projects across Africa. At the UN 28th Conference on Climate Change (COP28) in Dubai in 2023, Rwanda launched its National Carbon Market Framework. This framework outlines rules for generating, trading, and verifying carbon credits, ensuring transparency and preventing double counting.

In June 2025, the Rwanda Environment Management Authority (REMA) announced that 19 projects were ready to participate in the international carbon market. These projects are categorized into three main areas: 12 focused on energy-efficient stoves, three on agroforestry and reforestation, and four on water purification. This initiative aligns with Rwanda’s broader goal of mobilizing $6.2 billion in climate finance from 2024 to 2030 as part of its Climate and Nature Finance Strategy.

Article 6 of the Paris Agreement

Rwanda is also working to be ready to participate under Article 6 of the Paris Agreement, which enables cooperative approaches to trading emissions reductions between countries. Article 6 provides guidelines for international cooperation to achieve climate targets through carbon markets and non-market approaches.

Under Article 6.2, countries can enter into partnerships with other nations to transfer emission reductions, known as Internationally Transferred Mitigation Outcomes (ITMOs). In this mechanism, one country pays for an emission reduction project in another country in exchange for emission reduction units or carbon offsets, which can then be used by the paying country to meet its own Nationally Determined Contributions (NDCs).

Article 6.4 establishes a centralized mechanism run by the UNFCCC to certify projects that issue emission reduction units, which can be traded internationally. Rwanda has partnered with the Global Green Growth Institute (GGGI) to assist with operationalizing the framework, building capacity, engaging stakeholders, and making regulatory and procedural arrangements.

Through these efforts, Rwanda continues to strengthen its position in the global fight against climate change, demonstrating how innovative policies and international cooperation can drive meaningful environmental impact.