Centres of Expertise

Carbon Markets

Overview

Our Carbon Markets Centre of Expertise works to unlock and channel capital through African carbon markets, to deliver benefits for the continent’s people, environment and economies.

The Centre is involved in projects across all FSD Africa’s core areas – Adaptation & Resilience, Financial Markets, Early-Stage Finance, and Investments. It also collaborates with our Nature and Gender Centres of Expertise, and works closely with governments, the private sector, civil society and regional partners.

Africa’s Carbon Market Potential

Carbon markets revolve around carbon credits – instruments of value generated by projects that reduce greenhouse gas emissions.

Thanks to Africa’s natural carbon sinks, renewable energy resources and low-emission technologies, the continent has the potential to lead the way in generating ‘high-integrity’ credits, which are verified for their genuine impact on emissions.

Scaling carbon markets in Africa to fulfil this potential could mobilise billions to support sustainable development. Thriving carbon markets not only help tackle climate change, but also generate economic benefits like jobs, innovation and improved livelihoods.

But Africa’s potential is not being realised. Systemic barriers – in policy, regulation, capacity and knowledge – limit the scale of the continent’s carbon markets.

African credits are undervalued on the global market, with the co-benefits of associated projects – like biodiversity, job creation and livelihood restoration – not being properly reflected.

We’re addressing these challenges with a unique approach. We work across the whole value chain to strengthen Africa’s carbon markets, from policy and regulation to market infrastructure, financing and local capacity.

By connecting governments, financial institutions, projects and communities, we’re building an ecosystem that attracts capital, delivers high-integrity and high-value credits that generate real benefits for climate and development.

Working alongside all of FSD Africa’s teams and partners, we ensure carbon markets are accessible, trusted and effective. We support carbon interventions across a range of sectors, recognising that both nature-based and non-nature-based solutions will be essential to Africa’s climate and development goals.

We use five core levers to deliver our whole-ecosystem approach:

  • Policy & regulation: Helping governments and regulators create policies, benefit-sharing frameworks and practical rules that make carbon markets fair and trusted.
  • Market infrastructure: Strengthening the systems – trading platforms, registries and digital tools – that improve transparency, reduce costs and make buying and selling credits easier.
  • Capacity building: Equipping all players, from project developers to financial institutions, with the skills needed to participate and benefit.
  • Innovative finance: Designing and supporting financial solutions that reduce risk, unlock capital and attract large-scale project investment.
  • Knowledge & insights: Producing research, sharing lessons and shaping conversations that build confidence in African carbon markets.