Bangladesh eyes $1b a year carbon credits from 250m tree plantation drive

Bangladesh could earn nearly US$1 billion annually from carbon credit trading if its ambitious nationwide tree plantation programme is implemented effectively, according to a government report.

Prime Minister Tarique Rahman on 13 June inaugurated the initiative to plant 25 crore (250 million) trees over the next five years, aiming to bolster environmental protection and mitigate the impacts of climate change.

The Climate Financing Budget Report identifies carbon credit generation as a key feature of the programme, noting that large-scale afforestation can create significant opportunities in global carbon markets, adds BSS. 

Under existing international mechanisms, designated plantation areas must be registered and reported in advance to relevant bodies.

By enhancing carbon sequestration and reducing net greenhouse gas emissions, the initiative could generate tradable carbon credits, opening up a substantial revenue stream. 

Citing World Bank estimates, the report suggests Bangladesh could earn close to $1 billion annually from such credits.

Beyond potential earnings, the programme is expected to deliver wide-ranging environmental benefits, including reduced temperatures, improved rainfall patterns, better soil quality and stronger ecosystem resilience. 

The report describes it as a rare opportunity to advance climate action while supporting sustainable economic growth. Globally, carbon pricing revenues reached $107 billion in 2025, up about 2% in real terms from the previous year. 

The market is currently valued at around US$250 billion and could expand to $1 trillion by 2050, with private sector investment playing a leading role. However, the report cautions that Bangladesh is not yet fully prepared to tap into international carbon markets. 

Key challenges include limited technical expertise on Article 6 mechanisms, an underdeveloped legal and regulatory framework, and insufficient capacity in monitoring, reporting and verification (MRV) systems.

It stresses that addressing these gaps through regulatory reform, institutional strengthening and capacity building will be crucial to unlocking carbon finance.

A carbon credit represents the verified reduction or removal of one metric tonne of carbon dioxide or its equivalent. 

Such credits are generated through activities including renewable energy, energy efficiency, afforestation and methane capture, and are traded in both compliance and voluntary markets.

Bangladesh has some prior experience in this field.  In 2006, Infrastructure Development Company Limited (IDCOL) registered the country’s first Clean Development Mechanism project with the UNFCCC. Since then, it has sold 2.53 million carbon credits, earning about $16.25 million from initiatives such as solar home systems and improved cookstoves – offering a foundation for scaling up participation in global carbon markets.