Uganda Seeks Simpler Carbon Market Rules to Empower Local Investors and Farmers

Uganda is actively seeking to simplify its carbon market regulations to attract investment while safeguarding the interests of local stakeholders. The government acknowledges that current global rules for carbon trading are complex and could disadvantage African nations like Uganda, potentially leading to the exploitation of their natural carbon sinks.

During the East African Carbon Markets Forum 2026 in Kampala, Environment Minister Kahinda Otafiire highlighted the need for frameworks that favor continental investors. He expressed concern that overly complicated regulations might prevent financial gains from remaining within Africa. “Why don’t you help continental investors to invest and do this thing? And then the resources remain here,” he stated, emphasizing that while his personal views don’t represent official government policy, Uganda’s limitations should not expose it to unfair practices.

Despite these concerns, investor interest in Uganda’s carbon market remains high. The Ministry of Water and Environment has received approximately 84 project proposals, with about 70 percent receiving letters of no objection. To address regulatory complexity, Uganda introduced the National Climate Change (Climate Change Mechanisms) Regulations, 2025. This framework aims to improve project approval, verification, and benefit-sharing, thereby ensuring local communities receive more than just basic corporate social responsibility returns.

However, the Ministry also cautioned smallholder farmers against independently pursuing agroforestry projects, noting that they require significant land (over 600 hectares) and capital (at least $73,000) to be economically viable. They are encouraged to form aggregated groups to achieve the necessary scale.

The call for regulatory simplification was echoed by Kenneth Muhangi, Chairman of the Carbon Markets Association of Uganda. He urged the government and private sector to remove licensing and financing barriers, making participation accessible for ordinary Ugandans. The success of the carbon market, according to Shafiga Wanyenya, Vice Chairperson of Parliament’s Climate Change Committee, will ultimately be measured by the tangible value delivered to citizens who are actively conserving local landscapes, stressing the importance of transparency, accountability, and fair benefit-sharing.

Source: Daily Monitor (Uganda)