DHAKA, June 23, 2026 – Bangladesh could earn nearly US$1 billion annually through carbon credit trading from its nationwide 25 crore tree plantation programme, according to a government report, highlighting a major opportunity to combine climate action with green economic growth. Report BSS
Prime Minister Tarique Rahman officially launched the ambitious five-year programme on June 13, aiming to strengthen environmental protection and mitigate the impacts of climate change by planting 25 crore trees across the country.
According to the Climate Financing Budget Report, one of the initiative’s most significant features is its potential to generate substantial carbon credits through large-scale afforestation.
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Under international carbon market mechanisms, designated plantation areas must be registered in advance and regularly reported to relevant international authorities and participating countries. By increasing carbon sequestration and reducing net greenhouse gas emissions, the programme could create significant financial returns through carbon credit trading.
Citing World Bank estimates, the report says that successful implementation of the programme could enable Bangladesh to earn approximately US$1 billion every year from the sale of carbon credits generated by tree plantation activities alone.
Beyond economic gains, the initiative is expected to produce substantial environmental benefits, including lower temperatures, improved rainfall patterns, enhanced soil quality, and stronger ecosystem resilience.
The report notes that the programme presents a unique opportunity to simultaneously advance sustainable development, accelerate climate action, and create new avenues for green economic growth.
Expanding Global Carbon Market Opportunities
Global carbon pricing revenues reached US$107 billion in 2025, representing a two percent increase from 2024 in real terms. The global carbon market is currently estimated at US$250 billion and is projected to expand to US$1 trillion by 2050, with the private sector expected to become the primary source of investment.
The report emphasizes that countries must demonstrate effective project implementation to attract international investment and maximize their participation in carbon markets.
Given Bangladesh’s status as one of the world’s lowest per-capita greenhouse gas emitters, properly designed and executed carbon reduction programmes could generate significant annual revenue through international carbon trading.
Challenges to Participation
Despite its strong potential, Bangladesh is not yet fully prepared to participate effectively in global carbon markets.
The report identifies several key challenges, including:
• Limited technical knowledge of Article 6 mechanisms under the Paris Agreement;
• An underdeveloped legal and regulatory framework for carbon credit issuance and trading;
• Insufficient public and private sector capacity for Monitoring, Reporting and Verification (MRV) systems and project certification.
Addressing these gaps through regulatory reforms, institutional investments, and capacity-building initiatives is considered a strategic priority for unlocking carbon finance as a meaningful source of climate financing.
Understanding Carbon Credits
A carbon credit represents the verified reduction, removal, or avoidance of one metric ton of carbon dioxide (CO?) or its equivalent in other greenhouse gases.
Carbon credits are generated through various mitigation activities, including:
• Renewable energy projects;
• Energy efficiency improvements;
• Afforestation and reforestation;
• Methane capture initiatives.
These credits can be traded in either compliance or voluntary carbon markets, allowing governments, businesses, and institutions to offset their emissions by purchasing verified reductions from other entities.
International carbon trading operates under frameworks such as Article 6 of the Paris Agreement and voluntary standards that require robust Monitoring, Reporting and Verification (MRV) systems.
Bangladesh’s Early Success in Carbon Markets
Bangladesh already has valuable experience in carbon market participation.
In 2006, the Infrastructure Development Company Limited (IDCOL) registered the country’s first Clean Development Mechanism (CDM) project with the United Nations Framework Convention on Climate Change (UNFCCC).
Since then, IDCOL has sold 2.53 million carbon credits, generating US$16.25 million (approximately Tk 170 crore at current exchange rates) from projects such as solar home systems and improved cookstoves.
This track record demonstrates Bangladesh’s technical capabilities in carbon project development and provides a credible foundation for expanding its role in international carbon markets.
