By Business Insider Reporter
Tanzania and Djibouti have initiated strategic discussions aimed at forging a joint carbon trading framework targeting the aviation and maritime sectors, in a move that could position East Africa as a critical player in the fast-evolving global carbon market.
The talks, held in Dodoma on March 25, 2026, bring together Tanzania’s National Carbon Monitoring Centre and Djibouti’s Africa Sovereign Carbon Registry Foundation, signalling a growing continental push to retain climate finance within Africa while strengthening environmental accountability in high-emission industries.
Targeting high-emission sectors
The proposed partnership focuses on integrating carbon pricing mechanisms into two of the most carbon-intensive sectors – aviation and maritime transport. Under the framework, airlines and shipping companies would be required to offset their emissions by contributing directly to climate mitigation projects across Africa.
Speaking during the discussions, Permanent Secretary in the Vice President’s Office (Union and Environment), Dr. Richard Muyungi, said Tanzania is keen to adopt Djibouti’s model, particularly given its strategic infrastructure assets.
“Tanzania operates major seaports such as Port of Dar es Salaam and Port of Tanga, alongside international airports. Integrating these into a carbon trading system could significantly enhance regional cooperation and climate financing,” he noted.
Toward a regional carbon trading hub
If successfully implemented, the initiative could position Tanzania as a regional hub for carbon trading linked to international transport, creating new revenue streams while reinforcing climate commitments.
Dr Muyungi emphasised that the broader objective is to ensure that revenues generated from carbon markets – often dominated by global actors – are retained within Africa and reinvested in local climate resilience projects.
“This is about strengthening Africa’s negotiating power and ensuring that the continent benefits directly from carbon trading mechanisms,” he said.
Djibouti’s model gains traction
Djibouti, through ASCR, has already implemented a carbon pricing system for vessels calling at its ports. According to ASCR Secretary General, Ambassador Ahmed Araita Ali, the system requires shipping companies to transparently report and pay for their carbon emissions in line with international standards.
Revenues generated from the scheme are channelled into environmental projects, including renewable energy development, forest conservation, and coastal ecosystem protection.
Ambassador Ali said Djibouti is now seeking to scale the model across Africa through partnerships with countries like Tanzania, regional institutions, and development partners.
“Our goal is to build a unified, transparent, and credible African carbon system that allows the continent to speak with one voice in global carbon markets,” he said.
Institutional framework and policy direction
Tanzania’s engagement in carbon markets is being anchored by the National Carbon Monitoring Centre (NCMC), established under Section 29 of the Environmental Management Act (Cap 191).
The centre is mandated to coordinate carbon trading activities and ensure compliance with international climate frameworks.
Carbon trading itself is an economic mechanism that allows entities to buy and sell carbon credits, incentivising emission reductions while generating financing for climate mitigation and adaptation initiatives.
Globally, carbon markets are gaining prominence as countries and corporations seek cost-effective pathways to meet climate targets under frameworks such as the Paris Agreement.
Strategic and economic implications
For Tanzania, the partnership comes at a time when the government is exploring innovative financing mechanisms to support its climate agenda without placing additional pressure on public finances.
By linking carbon trading to high-traffic infrastructure such as ports and airports, the country could unlock significant new revenue streams while enhancing environmental governance in key economic sectors.
The initiative also aligns with broader efforts to position East Africa as a logistics and trade hub, integrating sustainability into the region’s growth model.
Challenges and outlook
Despite its potential, the success of the proposed framework will depend on regulatory harmonisation, institutional capacity, and private sector compliance.
Carbon markets are complex and require robust monitoring, reporting, and verification systems to ensure credibility.
There are also concerns around pricing mechanisms, market volatility, and the risk of excluding smaller operators if compliance costs are too high.
However, analysts argue that early adoption could give Tanzania and Djibouti a first-mover advantage in shaping Africa’s carbon market architecture.
A continental opportunity
As global demand for carbon credits continues to rise, Africa – home to vast natural carbon sinks – remains underrepresented in carbon trading revenues. Initiatives such as the Tanzania-Djibouti partnership aim to address this imbalance by creating locally driven systems that prioritise African interests.
If scaled effectively, the collaboration could mark a turning point in how the continent engages with climate finance – shifting from a passive recipient to an active market participant. For Tanzania, the stakes are both environmental and economic: leveraging its strategic location and infrastructure to become a gateway for sustainable trade, while contributing meaningfully to the global fight against climate change.
