Living standards among several Ugandans will soon improve following the country’s eligibility to participate in the global carbon market trade, experts reveal. The government in May 2025 launched Uganda’s National Climate Change (Climate Change Mechanisms) Regulations, 2025 ─ one of the tools required for a country to qualify to trade in global carbon markets. Popularly known as carbon markets, the regulation tackles aspects of compliance, cooperation, and voluntary mechanisms, among the key considerations to enable carbon trade.
“Uganda now meets all basic requirements to participate in carbon markets. For example, we have a Nationally Determined Contribution (NDC), which is being updated, a functional National Greenhouse Gas Inventory (NGGI), a National Designated Authority (NDA -Ministry of Water and Environment), the National Climate Change (NCC) Act (CAP-182), and now the Carbon Regulations.
Government has already approved 13 Clean Development Mechanisms projects for transition to Article 6.4 mechanism of the Paris Agreement, demonstrating our readiness and commitment to leveraging international carbon markets,” said Dr Alfred Okidi, the Permanent Secretary, Ministry of Water and Environment (MWE). The milestone represents Uganda’s readiness to participate in the market mechanisms in line with the National Climate Change (CCA) Act, Cap 182, and Article 6 of the Paris Agreement. The development casts a ray of hope to communities whose livelihoods are entirely dependent on natural resources.
How climate change regulation can facilitate carbon trade?
The regulations will facilitate coordination and enforcement of Uganda’s response to climate change, support implementation of Environment and Social Safeguards (ESS), monitoring and evaluation systems, registration and tracking of carbon credit projects. The regulation provides for MWE as the National y Authority (NDA) on climate change issues in the country. Therefore, potential project developers can now make initial requests to the NDA for approval. The NDA reviews the projects to ensure they meet the requirements, after which, will issue a ‘Letter of No Objection’ permitting the developer to conduct a feasibility study, finalise the project design, and develop a benefits sharing plan- (which outlines how economic, social, and environmental benefits from carbon trade projects will be equitably shared among stakeholders). Subsequently, the developer will apply for final approval from NDA, subject to verification against a specific carbon standard (e.g., Verra’s Verified Carbon Standard) by a third party. Once successful, carbon credits are then issued, which can then be traded in the carbon market.
Carbon credits are generated through controlling the volume of carbon emissions released into the atmosphere. Restoration of degraded wetlands and forests is one way Uganda could reduce carbon emissions. The more credits a country generates, the more potential to attract financial gains. Uganda’s market is considered to be a potential frontrunner in the African continent’s carbon market, with a portfolio of over 33 million carbon credits.
According to global statistics, wetlands, especially peatlands, store more carbon as compared to forests. Uganda’s peatlands alone are estimated to cover 6878Km2 with a carbon stock of 192Mtons. Uganda’s forests are currently estimated to store between 1.1 and 2.4 billion tonnes of carbon, depending on the forest type and degradation level. Forests sequester between 3.75 to 5.5 million tonnes of carbon per year. In 2018, a carbon sequestration survey was conducted, which estimated that Uganda’s forests sequestered about 8 million tonnes of carbon dioxide equivalents. The country has been using these results to search for buyers who can pay for these credits and use the proceeds to increase investment in the forest sector as well as strengthen restoration and conservation efforts.
Potential benefits from carbon projects
Conservation/government funds: Carbon projects provide an opportunity for the government to have access to innovative carbon financing mechanisms, and the resulting financial incentives can have impacts on communities economically, socially, and environmentally. While their primary aim is to reduce greenhouse gas emissions, these projects often deliver direct and indirect benefits to the people who live in or around the project area, including supporting sustainable land use, community conservation initiatives, ecosystem rehabilitation and alternative livelihood options. Local communities can benefit from carbon projects by receiving a share of proceeds from the sale of carbon credits. Some of the projects can support job creation, in areas of forest and wetland monitoring, clean energy production and renewable energy projects.