Ghana’s EPA Act 2025: Carbon Credits and Climate Regulation Implications

Author – Gideon Ofori Osabutey

Executive Summary

The Environmental Protection Act 2025 (Act 1124) of Ghana represents a landmark development in the country’s approach to climate regulation, with particular implications for carbon credit markets and the private sector.¹ Enacted in January 2025, the Act establishes a statutory Carbon Markets Office (CMO) hosted by Ghana’s Environmental Protection Authority (EPA), providing a legal framework for carbon credit generation, validation, and trading.² This brief examines the Act’s key provisions related to carbon credits, analyzes Ghana’s position within global regulatory trends, and considers the implications for private sector entities operating in Ghana. With the rise in climate regulations worldwide, Ghana’s approach demonstrates commitment to standardized frameworks that can facilitate international carbon market participation while driving domestic climate action.³

1. Key Provisions of Ghana’s EPA Act 2025

1.1 Carbon Market Framework and Institutional Structure

The Environmental Protection Act 2025 (Act 1124) provides statutory backing to Ghana’s carbon market initiatives by formally establishing the Carbon Markets Office within the Environmental Protection Authority’s Climate Change Unit.⁴ The Act endows the Carbon Markets Office with ‘expansive supervisory, regulatory, and operational powers to oversee Ghana’s carbon market activities’.⁵ This legal foundation insulates carbon market initiatives from political cycles that have historically undermined efficient implementation of long-term climate programs.

The CMO is responsible for implementing policies, rules, and guidance on carbon credit transactions, providing targeted support for:

1. Mitigation activity sourcing and matchmaking
2. Activity development services
3. Monitoring, reporting, and verification (MRV) systems
4. Registry operations
5. Creation and transfer of Internationally Transferred Mitigation Outcomes (ITMOs)
6. Reporting and corresponding adjustments⁶

1.2 Ghana Carbon Registry and Market Infrastructure

The Act formalizes the Ghana Carbon Registry (GCR), an online database system designed to ‘collect and track transactions from mitigation activities at sector, city, and corporate levels’.⁷ The Registry uses high-quality standards and protocols for quantifying and verifying greenhouse gas emissions reductions, issues carbon credits, and tracks these credits in a transparent manner. This infrastructure supports Ghana’s participation in various carbon market mechanisms, including:

1. Article 6.2 cooperative approaches under the Paris Agreement
2. The Voluntary Carbon Market (VCM)
3. Article 6.4 mechanisms (Paris Agreement Credit Mechanism)
4. Domestic carbon pricing mechanisms⁸

1.3 Nationally Determined Contribution (NDC) Integration

The EPA Act 2025 aligns Ghana’s carbon market framework with its ambitious NDC targets. Ghana aims to ‘mitigate an absolute 64 MtCO₂eq by 2030, with 24.6 MtCO₂eq being the unconditional target and 39.4 MtCO₂eq as the conditional target’.⁹ The Act provides the legal foundation for making approximately 24 million tonnes of emission reductions available for transactions under Article 6.2 cooperative approaches, helping Ghana meet its conditional NDC targets while attracting climate finance.¹⁰

2. Global Context of Climate Regulation

2.1 Positioning within International Frameworks

Ghana’s EPA Act 2025 positions the country as a leader in Africa’s carbon market development. Alongside Tanzania and South Africa, Ghana is considered to have ‘some of the most advanced regulatory frameworks for carbon markets in Africa’.¹¹ The Act aligns with global best practices while addressing Ghana-specific conditions and opportunities.

The legislation enables Ghana to participate effectively in international carbon market mechanisms under the Paris Agreement through:

1. Authorized carbon credit generation and transfer
2. Standardized methodologies for emissions accounting
3. Robust MRV systems
4. Integration with international carbon market registries¹²

2.2 Comparison with Other Regulatory Frameworks

Ghana’s approach differs from the European Union’s comprehensive suite of climate-related disclosure regulations, such as the Corporate Sustainability Reporting Directive (CSRD), by focusing more directly on carbon market participation and project development.¹³ Unlike the EU approach, which emphasizes mandatory corporate disclosure, Ghana’s framework prioritizes creating an enabling environment for carbon project development and credit generation.

In contrast to the United States’ fragmented approach to carbon market regulation (with different frameworks at federal and state levels), Ghana has established a unified national system under the EPA Act 2025, providing clarity and consistency for market participants.¹⁴

3. Implications for Ghana’s Private Sector

3.1 Opportunities for Businesses

The EPA Act 2025 creates significant opportunities for Ghana’s private sector across multiple industries:

Project Development and Carbon Credit Generation Private entities can now access a clear regulatory pathway for developing carbon credit projects. Several high-value projects are already underway, including an agreement between local waste management company Jospong Group and Indian-based EKI Energy, estimated to generate US$1 billion in carbon credit revenue. Another integrated waste recycling and compost initiative is expected to generate US$20 million by 2030.¹⁵

Financial and Investment Opportunities The Act creates new financial flows and investment opportunities through:

1. Direct revenue from carbon credit sales
2. Enhanced access to climate finance
3. Foreign direct investment in green projects
4. Development of carbon trading expertise and services¹⁶

Sectoral Growth Areas Industries with particular carbon credit generation potential include:

1. Energy (renewable energy deployment)
2. Waste management (methane capture and utilization)
3. Forestry (REDD+ and afforestation)
4. Agriculture (climate-smart farming practices)
5. Transport (fuel efficiency and electrification)¹⁷

3.2 Compliance Requirements and Business Costs

The Act introduces new compliance requirements for businesses engaging in carbon market activities:

Mandatory Registration and Fees Private entities must register with the Carbon Markets Office and comply with its requirements, including:

1. Mitigation activity participant application fees
2. Issuance fees for carbon credits
3. Reporting obligations¹⁸

Project Development Standards Projects must adhere to international best practices in:

1. Methodology selection and application
2. Third-party verification and validation
3. Environmental and social safeguards
4. Transparency and disclosure¹⁹

3.3 Major Investment Initiatives

The EPA Act 2025 has already catalyzed major climate investment initiatives in Ghana:

Ghana Green Guard Initiative A USD$25 billion public-private climate futures initiative agreement was recently established between CarbonPura Africa, the Environmental Protection Authority, and Private Sector Participation in Health (PSPH).²⁰ This landmark project demonstrates how the new regulatory framework can attract significant investment. The initiative will generate over 305 million high-quality carbon credits across 12 million hectares of diverse landscapes with projected revenue of $10.4 billion over 25 years.²¹

Cocoa Sector Transformation The carbon market framework established under the Act supports Ghana’s sustainable cocoa initiatives. Ghana has already earned $4.8 million for reducing nearly 1 million tons of carbon emissions through sustainable cocoa farming practices, with up to $45 million expected by the end of 2024.²² Private sector cocoa producers now have pathways to monetize sustainable practices through carbon credits.

4. Challenges and Recommendations for Businesses

4.1 Implementation Challenges

Despite the promising framework, private sector entities face several challenges:

Limited Transparency of Operations The Carbon Market Office currently provides limited transparency regarding its operations, disclosing ‘only estimate figures on its activities without any details of projects’.²³ The registry lacks project updates and comprehensive support systems for businesses, which may create uncertainty for investors and project developers.

Capacity and Technical Expertise Many Ghanaian businesses lack the technical expertise required for carbon project development, particularly in:

1. Carbon accounting methodologies
2. MRV systems implementation
3. International certification standards compliance
4. Financial modeling for carbon credit projects²⁴

Access to Initial Capital Carbon projects often require significant upfront investment before generating credits, creating barriers for smaller companies and entrepreneurs.²⁵

4.2 Strategies for Private Sector Engagement

Businesses can maximize opportunities under the EPA Act 2025 by:

Building Internal Capacity

1. Develop in-house expertise on carbon markets and project development
2. Train staff on relevant methodologies and standards
3. Engage with technical assistance programs offered by development partners²⁶

Forming Strategic Partnerships

1. Partner with international carbon market specialists
2. Join industry associations focused on climate action
3. Collaborate with research institutions for methodology development
4. Consider public-private partnerships for larger initiatives²⁷

Phased Implementation Approach

1. Begin with pilot projects to build experience and demonstrate concept
2. Scale successful interventions gradually
3. Diversify across project types and methodologies to manage risk²⁸

4.3 Sector-Specific Opportunities

Agriculture and Forestry The agriculture sector can benefit through:

1. Climate-smart agriculture practices that sequester carbon
2. Agroforestry systems that combine production with carbon sequestration
3. Sustainable cocoa production systems with premium market access²⁹

Energy and Manufacturing These sectors can engage through:

1. Energy efficiency improvements generating carbon credits
2. Renewable energy deployment for both operational cost savings and carbon revenue
3. Process improvements that reduce emissions intensity³⁰

Waste Management This sector presents immediate opportunities through:

5. Methane capture from landfills
6. Waste-to-energy projects
7. Composting and organic waste processing³¹

   5. Conclusion and Future Outlook

Ghana’s EPA Act 2025 represents a significant milestone in the country’s climate policy framework, providing a strong legal foundation for carbon market development. For the private sector, the Act creates both opportunities and challenges, offering pathways to generate revenue through carbon credits while imposing new compliance requirements.

The success of this framework will depend on effective implementation, continued capacity building, and strong engagement from private sector actors. Businesses that proactively engage with the new carbon market infrastructure, develop appropriate technical capacity, and integrate climate considerations into their strategic planning will be well-positioned to benefit from Ghana’s emerging carbon economy.

As Ghana positions itself as a regional leader in carbon market development, the EPA Act 2025 provides a solid foundation for scaling climate finance and supporting the transition to a low-carbon economy. Private sector engagement will be crucial for achieving Ghana’s NDC targets and advancing sustainable development priorities.

References

Footnotes

1. Environmental Protection Authority, ‘Environmental Protection Act 2025 (Act 1124)’ (Republic of Ghana 2025).
2. African Climate Wire, ‘Betting Big While Transparency is a Mystery – Ghana’s Carbon Market Dilemma’ (African Climate Wire, 23 January 2025).
3. BeZero Carbon, ‘Carbon Credit Disclosures in the Face of Evolving Climate Regulations’ (BeZero Carbon 2024).
4. Ghana Carbon Market Office, ‘Ghana’s Framework on International Carbon Markets’ (Environmental Protection Authority, Republic of Ghana 2025).
5. African Climate Wire (n 2).
6. Ghana Carbon Market Office, https://cmo.epa.gov.gh/ accessed 5 May 2025.
7. Ghana Carbon Registry System, ‘Who We Are’ (Environmental Protection Authority, Republic of Ghana 2025) https://gcr.epa.gov.gh/about-us/ accessed 5 May 2025.
8. Ghana Carbon Registry System, ‘Frequently Asked Questions’ (Environmental Protection Authority, Republic of Ghana 2025) https://gcr.epa.gov.gh/faqs/ accessed 5 May 2025.
9. Ghana Carbon Registry System (n 8).
10. Ghana Carbon Registry System (n 8).
11. African Climate Wire (n 2).
12. Ghana Carbon Market Office (n 6).
13. BeZero Carbon (n 3).
14. BeZero Carbon (n 3).
15. African Climate Wire (n 2).
16. Ghana Carbon Market Office (n 6).
17. Ghana Carbon Market Office, ‘Potential credits seeking authorization — 402 million tonnes’ https://cmo.epa.gov.gh/ accessed 5 May 2025.
18. Ghana Carbon Registry System (n 8).
19. Ghana Carbon Market Office (n 6).
20. Globe Newswire, ‘A USD$25 Billion Public-Private Ghana Climate Futures and Socio-Economic Initiative is Agreed’ (Globe Newswire, 24 March 2025).
21. Globe Newswire (n 20).
22. World Bank, ‘Climate Stories: Ghana Carbon Credits’ (World Bank News, 20 July 2023).
23. African Climate Wire (n 2).
24. Ghana Carbon Market Office (n 6).
25. BeZero Carbon (n 3).
26. Ghana Carbon Market Office (n 6).
27. Globe Newswire (n 20).
28. BeZero Carbon (n 3).
29. World Bank (n 22).
30. Ghana Carbon Market Office (n 17).
31. African Climate Wire (n 2).

Author – Gideon Ofori Osabutey