A nationwide tree plantation programme in Bangladesh could generate close to US$1 billion in annual revenue through carbon credit sales, according to a government climate finance report.
The initiative, which aims to plant 2.5 billion trees over the next five years, was formally launched on 13 June by Prime Minister Tarique Rahman.
The scheme is part of a broader strategy to strengthen environmental protection and reduce the country’s exposure to climate change impacts.
The Climate Financing Budget Report highlights that the large-scale afforestation drive could be registered under international carbon credit systems, allowing Bangladesh to earn financial returns by capturing and storing carbon dioxide (CO₂) through tree growth.
Under global carbon market rules, project areas must be formally documented, monitored and verified before credits can be issued.
The report notes that, if properly structured, the programme could open access to international carbon trading mechanisms under Article 6 of the Paris Agreement.
Citing World Bank estimates, the report suggests that Bangladesh could earn nearly USD 1 billion per year from carbon credits linked to the plantation effort alone, provided implementation meets international standards.
Beyond financial gains, the government expects the programme to deliver wider environmental benefits, including improved soil quality, reduced surface temperatures, better rainfall patterns and stronger ecosystem resilience.
Global carbon pricing revenues reached around USD 107 billion in 2025, reflecting steady growth in international emissions trading. Analysts expect the market to expand significantly over the coming decades, potentially reaching USD 1 trillion by 2050, driven largely by private sector investment.
However, the report warns that Bangladesh is not yet fully prepared to participate in global carbon markets at scale. It identifies key challenges, including limited technical expertise on Article 6 rules, gaps in legal and regulatory frameworks, and weak capacity for monitoring, reporting and verification (MRV).
Officials said, "These weaknesses will be essential if Bangladesh is to unlock carbon finance as a major source of climate funding.”
“Planned reforms include strengthening institutions, building technical skills and improving certification systems for carbon projects,” they added.
Carbon credits represent verified reductions or removals of one metric tonne of CO₂ or its equivalent greenhouse gases.
They are traded in both compliance and voluntary markets, allowing governments and companies to offset emissions by financing projects that reduce or capture carbon.
Infrastructure Development Company Limited already has early experience in this field. In 2006, it registered the country’s first Clean Development Mechanism (CDM) project with the UN climate body. Since then, it has sold around 2.53 million carbon credits, generating about US$16.25 million from renewable energy and improved cookstove projects.
The report said that this experience provides a strong technical foundation for expanding Bangladesh’s participation in international carbon markets, particularly as demand for nature-based solutions such as afforestation continues to rise.
