Italy and Tanzania sign Article 6.2 carbon trading deal targeting $2 billion in revenue

Italy has selected Tanzania as its primary partner for a bilateral carbon trading investment under Article 6.2 of the Paris Agreement. The deal was finalized during the UNFCCC subsidiary sessions in Bonn, with pilot projects supported by Sustainable Energy for All. Tanzania aims to generate $2 billion from carbon markets and the blue economy by 2050, leveraging its forests and coastal mangroves as carbon sinks. The agreement bypasses the voluntary carbon market in favor of a sovereign compliance framework. Italy will invest in conservation and renewable energy projects in exchange for Internationally Transferred Mitigation Outcomes (ITMOs) to meet its EU emission targets. Tanzania recently updated its carbon trading regulations to ensure state oversight and community revenue sharing, aiming to avoid the controversies that have hit other African carbon projects. The partnership includes feasibility studies, mandatory revenue sharing with rural communities, and a monitoring system to prevent double counting. If executed transparently, this could become a blueprint for sovereign carbon trading in Africa, moving the continent from a passive recipient of climate aid to a commercial player in global climate finance.