Background 

Ethiopia, in its updated nationally determined contribution (NDC), has set an ambitious emissions reduction target of 68.8% by 2030, requiring an estimated total of USD 316 billion for implementation. Achieving 20% of these targets depends on domestic resources, while the remaining 80% are conditional on international support (technology transfer, capacity building and finance, including carbon finance). As part of these efforts, Ethiopia views participation in international and domestic carbon markets as a strategic and innovative financing tool to generate revenue from exporting high quality carbon credits. Ethiopia has traditionally been a leader regarding the alignment of NDC targets and measures with the flagship development and climate strategies, notably the Climate Resilient Green Economy (CRGE) Strategy, and the Ten-Year Development Plan (2021–2030), led by the Federal Ministry of Planning and Economic Development (MoPD).

In this context, Ethiopia aims to develop a National Carbon Market Strategy to guide its effective engagement in the emerging international and domestic carbon market landscape, guided by Article 6 of the Paris Agreement. This Strategy will build on existing initiatives such as the Green Legacy Initiative, the NDC, the 10YPD, CRGE Strategy, as well as sectoral policies such as the National Non-Motorized Transport Strategy, National Programmes for Electrification, Biogas, Clean Cooking, Irrigation, and more. Moreover, the Strategy will be informed by the carbon market experience that Ethiopia has acquired from participating in the Clean Development Mechanism, voluntary carbon market programmes (Gold Standard, Verra, Plan Vivo), and bilateral cooperation (JCM). Together, these efforts will position Ethiopia to achieve its NDC and Long-Term Low-Emission Development Strategy (LT-LEDS) targets.

The United Nations Framework Convention on Climate Change (UNFCCC) Regional Collaboration Centre for East and Southern Africa (RCC EAS Africa), with financial support from the Collaborative Instruments for Ambitious Climate Action (CiACA) project, contracted Perspectives Climate Group (also referred here as “the Consultant team”) to develop a National Carbon Market Strategy for Ethiopia. A successful inception workshop has been held on January 3, 2025, which provided important information for the Strategy development and helped to identify key stakeholders.

Objectives

The objectives of the consultation meeting include the following:

• Provide an update on the Strategy development
• Raise Awareness
• Further establish a Core Team
• Assess Capacities and Needs
• Align Sectoral Goals
• Provide an overview of next steps for finalizing the Strategy Development

By achieving these objectives, the meeting will initiate the successful development and implementation of Ethiopia’s National Carbon Market Strategy.

Target Group

The target group for this meeting includes a core group of stakeholders leading the Strategy development. Key participants will include representatives from MoPD and sector representatives, as well as private sector stakeholders, financial institutions, and civil society organizations. A broader stakeholder consultation to ensure inclusive engagement and collaboration will subsequently be ensured in future workshops and trainings, in synergy with other A6 readiness efforts.

Engaging these stakeholders ensures that the Strategy reflects a balanced and inclusive approach, leveraging expertise from both public and private sectors to create a robust and effective framework for Ethiopia's participation in international carbon markets.

Key Outcomes

The consultation meeting highlighted the progress made towards the development of the National Carbon Market Strategy – in which the consultants presented a zero draft and participants gave feedback on the different sections.

Participants underscored the need for the Strategy to include an overarching institutional arrangement structure with clear roles and mandates, and that it should serve as a ‘’one stop centre’’ to ease coordination and ensure timely decision-making in terms of approving projects and offering any other necessary assistance to stakeholders involved in carbon projects.

It was also emphasized that for inclusivity, the structure should be composed of all key players both from government, civil society, academia, private sector, and local communities. The feedback obtained at this meeting will further be considered in the Strategy development process and presented at a stakeholder workshop for validation.