Domestic carbon market framework gaining global momentum

The country’s newly introduced carbon market framework is positioning it as a key player in global carbon credit trade, with strong demand from both sovereign buyers and corporate investors.

According to Acting Director-Climate Change Unit, Environmental Protection Agency (EPA), Dr. Daniel Tutu Benefoh, Ghana’s framework – approved by the Cabinet – allows the production and sale of carbon credits across sovereign, voluntary and compliance markets.

“We have launched a national carbon market framework that directly responds to the growing demand from sovereign carbon credit buyers, compliance and voluntary markets and others,” Dr. Benefoh noted, highlighting the robust interest being witnessed by the country in this burgeoning industry.

Under this system, he explained, carbon credits must undergo stringent verification, vetting and government approval before they can be priced and sold. The framework covers key components of the global carbon market – including Article 6 markets, voluntary markets and the airline market.

To streamline this process, EPA has developed the Ghana Carbon Registry System that aims to ensure transparency and accountability in the carbon credit trade.

Dr. Benefoh was speaking a ‘carbon emissions forum’ in Accra, and revealed that Ghana currently has 43 projects in the pipeline aimed at generating carbon credits….with 13 projects onboarded to the Registry.

The country is working closely with five sovereign governments to create demand for these credits, having already finalised agreements with Switzerland, Singapore and Sweden, he added.

“Now you can create a credit and sell it to investors there,” he added, referring to the international partnerships that have been forged.

He added that US$850,000 has been unlocked from 12 projects under the Swiss agreement.

Additionally, he said, the country is in talks with South Korea and Liechtenstein – and has initiated its first agreements with global energy giants such as BP and Mercuria Energy. However, he added, these are framework agreements and not commercial – meaning price negotiations are not part.

Furthermore, he pointed out that Ghana’s active role in the compliance carbon market has garnered international recognition, with the International Trade Administration (ITA) recognising it as currently the most active African country in this space.

Government is also exploring partnerships with major players in the voluntary market, such as Trafigura, Marubeni, and GenZero, as well as engaging with REDD+ initiatives under the World Bank.

Dr. Benefoh has already confirmed that Ghana secured some US$4.9million from the World Bank following successful delivery of 973 kilotonnes of emission reduction units through the Forestry Commission’s REDD+ projects.

During the forum – ‘Beyond the surface: Exploring the current state of carbon emissions in Ghana’s extractive industry’ – organised by PwC Ghana, Dr. Benefoh entreated local businesses to exploit the opportunities carbon markets present.

He stressed that businesses need to strive at taking advantage of them, particularly emphasising value creation existing within the market.

Dr. Benefoh mentioned, for instance, that on this development’s policy-side is the National Energy Transition Framework’s introduction – which is estimated to come some US$650 billion, an investment opportunity that he said the private sector should endeavour to tap.

A partner at PwC and ESG Lead, Richard Ansong, emphasised that while Ghana’s foundational framework for carbon trading is strong, companies must now actively engage to tap into the market’s full potential.

“Many companies have set net-zero targets, but some of their emissions cannot be abated; meaning they will need to purchase carbon credits. Ghana, with the right structures in place, could greatly benefit from this market,” he said.

Mr. Ansong pointed out that despite numerous companies announcing ambitious emissions reduction goals, only 31 percent have moved beyond planning to take concrete action. This represents an opportunity for Ghana to position itself as a major carbon credit supplier.

However, he said, for the country to achieve a just and equitable transition to a low-carbon economy, carbon market participants must consider the broader social impacts.

“Transition plans must take into account the impact on jobs, skills and local communities, particularly youth, women and indigenous populations,” Mr. Ansong said.

He acknowledged that the shift to a low-carbon economy is expected to result in the loss of 78 million jobs globally, but noted that it could also create up to 103 million new jobs – an opportunity for sustainable growth if managed properly.

Furthermore, Mr. Ansong announced that PwC has set a 2030 global target to achieve net zero, adding “We plan to go 100 percent renewable”.