Ethiopia Opens Forest Carbon Market to Private Developers

June 2, 2026

Mintesinot Nigussie

Ethiopia has rewritten the rules governing its forest carbon market, granting private developers and community forest owners broader control over carbon credit assets in a shift that reduces the state’s direct role in trading arrangements.

The changes are contained in the newly enacted Forest Carbon Trading (Amendment) Directive No. 1141/2026, which redraws ownership structures and market participation rules for carbon projects linked to forests and land use.

At the centre of the reform is a transfer of legal authority from the state toward individual forest owners. Under the previous framework, carbon assets generated through jurisdictional programmes were largely managed under a centralised structure dominated by the state-owned Ethiopian Forestry Development.

The revised directive narrows that mandate. Forest owners are now granted exclusive legal ownership over carbon credits generated on their land, while the role of EFD is confined to credits originating from state-administered jurisdictional programmes.

The amendment also allows private developers and cooperatives to opt out of government-led jurisdictional programmes before registration, creating a pathway for independently structured carbon projects aimed at international buyers.

The shift comes as Ethiopian authorities attempt to position the country more aggressively within global carbon finance markets.