Pakistan signs first carbon market deal with Norway under Paris Agreement

Pakistan and Norway on Wednesday signed a bilateral agreement under Article 6.2 of the Paris Agreement, marking Pakistan’s first entry into the international carbon market framework.

The agreement, signed under the Ministry of Climate Change and Environmental Coordination, allows Pakistan to develop carbon credit-generating projects and sell emission reductions to Norway. The arrangement is expected to facilitate climate finance and investment in sectors including clean energy, agriculture, transport and waste management.

Officials said the deal represents a transition from policy preparation to implementation of carbon trading mechanisms. Pakistan has already approved national guidelines for carbon markets and is working on systems for reporting, verification and bilateral cooperation to operationalise the framework.

Norway’s envoy to Pakistan said the agreement would support measurable emission reductions while contributing to development outcomes. He noted that Norway aims to achieve climate neutrality by 2030 and is seeking to purchase internationally transferred mitigation outcomes under Article 6 to meet its targets.

Under its Global Emission Reduction Initiative launched in 2024, Norway plans to provide carbon finance for partner countries, with a focus on large-scale programmes in renewable energy, industry and agriculture.

Officials said Pakistan has mitigation potential across multiple sectors and the agreement is expected to encourage project development and private investment. Norway has signed similar agreements with several countries and aims to acquire carbon credits as part of its climate strategy.

Both sides said the agreement could expand Pakistan’s access to international climate finance and support its commitments under the Paris Agreement.