At least 30% of the revenue generated from carbon credits from land-based carbon projects will directly benefit communities, according to new instructions by the Ministry of Environment. Beneficiaries include landowners, farmers, or other local stakeholders whose land is used for the a carbon credit project. ALSO READ: Rwanda to mobilise finance for 19 carbon market-ready projects The carbon market, established under Article 6 of the Paris Agreement, enables climate polluting countries and entities to finance greenhouse gas (GHG) emissions-reduction projects in other countries or entities and count the reductions towards their own climate targets. ALSO READ: How investors can tap into Rwanda’s carbon market On the carbon market, carbon credits can be bought and sold in line with specific standards and guidelines. A carbon credit represents one tonne of greenhouse gas emission reductions or removals. The carbon market is one of the mechanisms to mobilise climate finance. The instructions released on January 13 by the Ministry of Environment determine the fee structures applicable to carbon market projects and transactions, ensuring transparency, fairness, and sustainability in the governance of carbon market activities. ALSO READ: Can Rwanda make the best out of carbon markets? Carbon market project developers must pay administrative fees for approvals, transaction fees when selling credits, and share part of the benefits with the government and communities. Land-based projects have higher benefit-sharing requirements to ensure farmers and local communities fairly benefit from carbon projects on their land. Fees charged on general projects According to the instructions, administrative fees are one-off or process-based charges paid for official procedures and approvals in the carbon market. These fees cover government review, registration, and formal approval processes. The government will charge administrative fees for services provided to participants in the carbon market. These include $1,000 for opening a carbon market account, $1,500 for project registration and issuance of a non-objection letter, and $3,000 for the issuance of a letter of approval for general carbon projects under Article 6 of the Paris Agreement and the Voluntary Carbon Market. Project registration means the formal acceptance and validation of a mitigation activity or programme of activities by the designated national authority (DNA), which is Rwanda Environmental Management Authority (REMA). ALSO READ: Rwanda enters tripartite deal to cooperate on Article 6 carbon credit projects In addition, an issuance confirmation fee is charged per carbon credit at $0.2 under Article 6 and $0.1 under the Voluntary Carbon Market. In the carbon market, an issuance confirmation fee is a charge paid to verify and officially confirm that carbon credits have been issued after a project has successfully completed all required checks. Transaction fees are linked to carbon credits and include an authorisation fee of 2% of total emission reductions (carbon credits, of which one represents one tonne) under Article 6. Revenue sharing or benefit sharing ensures that the country gains from carbon trading. Up to 15% of authorised emission reductions is allocated as a share of proceeds for national climate priorities. Global climate contribution is made through the Overall Mitigation of Global Emissions (OMGE), which requires 2% of authorised emission reductions. This contribution supports global climate action beyond national benefits. Corresponding adjustment fees are charged at $2 per carbon credit for both Article 6 and Voluntary Carbon Market projects. These fees cover accounting adjustments to prevent the double counting of emission reductions. Project renewal and resubmission fees apply when a project requires changes or extensions. These include $5,000 for renewal of the crediting period, $500 for resubmission of Stage A, and $500 for validity period extension requests. Fees charged on land-based projects Fees for land-based projects apply to projects using farmers’ land, community land, or public land, which carry higher social responsibility. Administrative fees are the same as for general projects, including $1,000 for opening a carbon market account, $1,500 for project registration and non-objection letters, $3,000 for the letter of approval, and issuance confirmation fees of $0.2 per credit under Article 6 or $0.1 per credit under the Voluntary Carbon Market. ALSO READ: Rwanda to plant 63 million indigenous trees for carbon market Transaction fees include an authorisation fee of 2% of emission reductions, and 1% of authorised reductions is set aside in the National Buffer Account as a risk reserve. Benefit sharing with communities is the key difference for land-based projects. At least 30% of the revenue or credits must be allocated to communities and landowners, reflecting the use of their land and ensuring they directly benefit from carbon revenues. Share of Proceeds is a mandatory contribution collected by the government from carbon market activities to ensure fairness by sharing benefits from carbon trading with society. It can be taken as a percentage of carbon credit revenue or volume dedicated to adaptation finance, community benefit, and national climate programmes for flood protection, drought resilience, and other initiatives. ALSO READ: How Rwanda is faring on carbon market Global climate contribution is maintained through the Overall Mitigation of Global Emissions, requiring 2% of authorised emission reductions. Renewal and amendment fees are the same as for general projects, with $5,000 for crediting period renewal, $500 for resubmission of Stage A or validity extension, and an additional $500 for any document amendments. All fees are payable to the bank account of the National Fund for Environment (FONERWA), known as the “Rwandan Green Fund”. National buffer account A National Buffer Account is a special account in the carbon market where a government sets aside a portion of carbon credits generated from projects in the country instead of selling or transferring them. It is kept by a country as insurance to address the risks of non-permanence, cover losses if a project fails, is reversed, or over-claims reductions, and reassures buyers and international partners that credits are credible. For instance, if a project generates 100 carbon credits, the rules in Rwanda require 1% of them to be placed in the National Buffer Account, and the rest can be sold or transferred. If later the project’s emission reductions are invalidated by forest fire, disasters, data errors, or project failure, credits from the buffer are used to compensate.
