Pakistan, Norway sign carbon market deal under Paris agreement

April 01, 2026 (MLN): Pakistan has signed its first-ever bilateral agreement under Article 6.2 of the Paris Agreement with Norway, which marks a major step into global carbon markets and opening avenues for climate finance, clean energy investment, and sustainable development.

The memorandum of understanding was signed in Islamabad under the Ministry of Climate Change and Environmental Coordination, with Federal Minister Musadik Malik and Norway’s Ambassador Per Albert Ilsaas highlighting the agreement as a significant milestone during the ceremony, according to a press release issued.

The deal enables Pakistan to develop carbon credit projects across sectors such as renewable energy, agriculture, transport, and waste management, and sell the resulting emission reductions to Norway.

Speaking at the event, Mr Malik described the agreement as a “historic milestone” that shifts Pakistan from preparation to implementation in carbon markets. He emphasized that such mechanisms should not be treated as ends in themselves but as tools to finance climate transitions, generate employment, attract technology, and benefit local communities.

He noted that Pakistan had already approved national carbon trading guidelines in January 2025 and is now working on frameworks, reporting systems, and bilateral partnerships to operationalize the market.

He also highlighted the country’s strong potential for emissions reduction in sectors like renewable energy and agriculture.

Ambassador Ilsaas said the agreement signals a new phase of environmental cooperation between the two countries. He stressed that Norway aims to achieve climate neutrality by 2030 and is purchasing carbon credits not to meet its formal targets, but to go beyond them.

He added that Norway’s Global Emission Reduction Initiative, launched in 2024 with a $1.5 billion budget, will support countries like Pakistan by channeling carbon finance and helping bridge climate funding gaps. Norway is also focusing on large-scale, sector-wide initiatives rather than isolated projects.

The ambassador noted that Norway has already signed similar agreements with several countries and plans to acquire 15 million carbon credits by 2030. He invited Pakistan to develop a broader pipeline of projects, including renewable energy ventures such as solar and wind initiatives.

Both countries agreed that the partnership could significantly enhance Pakistan’s access to climate finance, boost private investment, and support its transition to low-carbon growth while meeting its commitments under the Paris Agreement.

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