All newly launched carbon market projects and transactions in Rwanda will be subject to newly introduced fees, while existing projects are exempt, the Rwanda Environment Management Authority (REMA) has clarified. However, developers of existing projects who initiate a new stage within their project will need to pay the relevant fees for that stage, REMA added. The clarification comes as REMA informs project developers, investors, and stakeholders of the entry into force of Ministerial Instructions issued on January 13, 2025, which establish a clear and standardised fee structure for carbon market services in Rwanda. ALSO READ: Rwanda to mobilise finance for 19 carbon market-ready projects The carbon market, established under Article 6 of the Paris Agreement, allows high-emitting countries and entities to finance greenhouse gas (GHG) emission-reduction projects abroad and count those reductions toward their own climate targets. Carbon credits, representing one tonne of GHG reductions or removals, can be traded under international standards, making the mechanism a key tool for mobilising climate finance. REMA noted that project developers who have already committed a portion of carbon credits or emission reductions to Rwanda’s Nationally Determined Contribution (NDC) targets under existing approvals may be exempt from the new fees. “This exemption is subject to formal verification by REMA, acting as the Designated National Authority (DNA),” the authority said. ALSO READ: How investors can tap into Rwanda’s carbon market Under the new framework, all applicable fees must be paid directly into the National Fund for the Environment (Rwanda Green Fund) before any service is delivered. This includes account opening, project registration, issuance of non-objection letters, confirmations, or authorisations, and proof of payment must accompany all submissions. “All project developers, investors, and stakeholders are encouraged to review and comply with the Ministerial Instructions to ensure efficient, credible, and high-integrity carbon transactions,” REMA said. Project guidelines and eligibility Eric Mudakikwa Ruhanamirindi, Environmental Analytics Manager at REMA, explained that any proponent initiating a carbon market project must first conduct a feasibility or preparatory study aligned with international carbon market guidelines. ALSO READ: Can Rwanda make the best out of carbon markets? Carbon market projects are not limited to land-based activities. “Projects can also be implemented in sectors like electric vehicles, cookstoves, hydropower, and agroforestry,” he noted. For land-based projects, assessment depends on the type of activities and their potential to reduce GHG emissions, rather than land size alone. Eligible projects are outlined in Rwanda’s NDCs under a “positive list of eligible projects.” Fees under the new instructions The new instructions require developers to pay administrative fees, transaction fees linked to carbon credit sales, and benefit-sharing contributions to the government and local communities. Opening a carbon market account carries a $1,000 fee, while project registration and issuance of a non-objection letter require $1,500. Approval of a project under Article 6 or the Voluntary Carbon Market costs $3,000. Issuance confirmation is charged per carbon credit at $0.2 under Article 6 and $0.1 under the Voluntary Carbon Market. ALSO READ: Rwanda enters tripartite deal to cooperate on Article 6 carbon credit projects Transaction authorisation fees amount to 2% of total emission reductions under Article 6, with up to 15% of authorised emission reductions allocated to support national climate priorities. Renewal and resubmission fees apply for modifications, including $5,000 for renewal of a crediting period and $500 for resubmission of Stage A or extension requests. For land-based projects on community, public, or private farmland, administrative fees remain the same, but at least 30% of revenues or credits must be allocated to communities and landowners to ensure direct benefits. REMA emphasised that the Ministerial Instructions do not set carbon credit prices, which remain determined through market negotiations. Project developers’ perspectives Faustin Kanani, Coordinator of IPFG, which implements the 20-year Nyungwe Agroforestry Project, said the initiative plans to register under the Gold Standard to receive certified carbon credits. “We have started planting three million trees to restore carbon stocks and promote sustainable farming practices. REMA has issued a non-objection letter for us to participate in the carbon market,” he said. The project has committed about 1.7 million tonnes of carbon credits and will cover 13,000 hectares of farmland, involving 23,000 smallholder farmers near Nyungwe National Park. It aims to improve farmers’ resilience and contribute to climate mitigation through tree planting. SPOUTS of Water Rwanda Ltd, a social enterprise producing ceramic water filters and rocket stoves, has also initiated a water-filter carbon project. By promoting safe drinking water without firewood, the project reduces emissions from non-renewable biomass and charcoal. According to a December 2024 report submitted to the UNFCCC, SPOUTS has committed 6% of total carbon credits from its Water Purifier Programme in Africa to support Rwanda’s climate targets.
