Pakistan steps into global carbon market with historic Norway agreement

• Described as ‘historic milestone,’ Pakistan’s first-ever Article 6.2 pact opens doors to global carbon trading

• Minster Musadik Malik says with pact signing Islamabad shifts from preparedness to full-scale carbon market implementation

• Says deal paves way for climate finance, clean energy and green investment

• Norway eyes carbon credits as Pakistan taps vast mitigation potential

 ISLAMABAD: In what is being hailed as Pakistan’s formal entry into the global carbon market and a major breakthrough in climate diplomacy, Pakistan and Norway on Wednesday signed a landmark carbon market agreement under the Paris Agreement, according to an official statement.

The Ministry of Climate Change and Environmental Coordination said the deal marks Pakistan’s first bilateral agreement under Article 6.2 of the Paris Agreement, opening avenues for international carbon trading, climate finance, and large-scale investment in clean energy and climate-smart agriculture.

The Ministry of @ClimateChangePK today formalised Pakistan’s first bilateral carbon market agreement with Norway under Article 6.2 of the #ParisAgreement, a historic milestone in climate cooperation and environmental diplomacy. https://t.co/n9exCmZtu3

— Ministry of Climate Change, Pakistan (@ClimateChangePK) April 1, 2026

Signed in Islamabad, the memorandum of understanding (MoU) is being seen as a defining step in operationalising Pakistan’s carbon market ambitions and deepening its engagement in global climate cooperation.

The Paris Agreement, adopted by world leaders at the UN Climate Change Conference (COP21) on December 12, 2015, commits countries to reducing greenhouse gas emissions and strengthening resilience against climate impacts through collective action over time.

Under the new agreement, Pakistan will be able to develop carbon credit-generating projects across key sectors, including clean energy, agriculture, transport, and waste management, and potentially trade the resulting emission reductions with Norway.

پاکستان اور ناروے کے درمیان ماحولیاتی تعاون کا تاریخی معاہدہ طے پا گیا۔

وزارتِ موسمیاتی تبدیلی کے زیرِ اہتمام منعقدہ تقریب میں پیرس معاہدے کے آرٹیکل 6 کے تحت دونوں ممالک نے معاہدے کو حتمی شکل دی، مفاہمتی یادداشت پر دستخط کیے گئے۔

یہ معاہدہ پاکستان میں کلائیمیٹ اسمارٹ ایگری… pic.twitter.com/pm4bM18fFI

— Senator Musadik (Team) (@Team_Musadik) April 1, 2026

 ‘According to unlock opportunities for its emerging green economy’

Minister for Climate Change and Environmental Coordination Musadik Malik described the accord as a “historic milestone,” saying it would shift Pakistan from carbon market preparedness to full-scale implementation.

“This is Pakistan’s first bilateral agreement under Article 6.2 and an important step towards implementation,” Malik said. “It creates a credible pathway for international cooperation and investment in Pakistan’s climate priorities.”

He noted that the agreement would strengthen Pakistan’s standing in global carbon markets while unlocking opportunities for its emerging green economy.

“Carbon markets cannot be treated as an end in themselves. They must help countries like Pakistan finance transition pathways, create jobs, attract technology, and deliver tangible benefits to communities,” he said.

Malik added that Pakistan had already approved its first national policy guidelines for carbon trading in January 2025 and was now moving to establish regulatory frameworks, reporting systems, and bilateral mechanisms to operationalise the market.

He emphasised that Pakistan holds strong mitigation potential in sectors such as renewable energy, agriculture, transport, and waste management, which could attract both investors and project developers under the new framework.

‘Beginning of a new phase in bilateral environmental cooperation’

Speaking at the signing ceremony, Norway’s Ambassador to Pakistan Per Albert Ilsaas termed the agreement the beginning of a new phase in bilateral environmental cooperation.

“Pakistan is among the countries most affected by climate change, and we believe this partnership can deliver both measurable emission reductions and real development benefits,” he said.

Ilsaas noted that Norway—aiming to achieve climate neutrality by 2030—is seeking to purchase Internationally Transferred Mitigation Outcomes (ITMOs) under Article 6 not to meet its formal climate targets, but to go beyond them.

“We are not purchasing ITMOs to meet our nationally determined contributions. We are doing so to achieve climate neutrality beyond those commitments,” he said.

He added that Norway’s Global Emission Reduction Initiative, launched in 2024 with a budget of $1.5 billion, would provide carbon finance to countries like Pakistan.

“Through Norwegian Global Emission Reduction (Noger), we aim to channel carbon finance into countries such as Pakistan and help bridge the climate mitigation finance gap,” he said.

The ambassador further said Norway was looking beyond individual carbon credit projects and was interested in large-scale, sector-wide cooperation in areas such as renewable energy, industry, and agriculture.

“We are looking beyond individual projects. We are interested in partnerships across entire sectors where climate policies can generate emission reductions at scale,” he said.

Ilsaas noted that Norway has already signed similar agreements with Benin, Indonesia, Zambia, Jordan, and Senegal, and is working to acquire 15 million carbon credits by 2030.

He also invited Pakistan to present a broader pipeline of projects, highlighting renewable energy initiatives such as the Zhenfa 100-megawatt solar project and the Indus wind energy project as potential areas for future collaboration.

Both sides agreed that the pact could significantly enhance Pakistan’s access to climate finance and private-sector investment, while supporting the country’s transition to low-carbon growth and helping it meet its commitments under the Paris Agreement.