Carbon Market Regulation in Mozambique - Agroforestry Projects involving Smallholder Farmers

The JFS RESET memorandum on carbon regulation presents key recommendations for developing Mozambique’s carbon market, particularly for agroforestry projects involving smallholder farmers. The document highlights land tenure complexities, legal frameworks, institutional gaps, and financial mechanisms needed to unlock carbon investments and ensure equitable benefit-sharing. The insights stem from discussions at the FAO-led workshop (May 2024), where stakeholders examined regulatory challenges and investment opportunities in Mozambique’s emerging carbon market.

Key Findings

One of the most critical issues in Mozambique’s carbon market is clarifying land and carbon rights. The memorandum argues that carbon rights should belong to landowners, whether individuals, businesses, or smallholder farmers, rather than the State. Since many small-scale farmers lack formal DUAT land titles, it is recommended that community-issued land-use confirmations be legally recognized to prevent their exclusion from carbon market opportunities. Additionally, carbon sequestration from soil and trees should be treated under the same legal framework, ensuring fair compensation for farmers adopting regenerative agroforestry practices.

For Mozambique to attract foreign and domestic investment in carbon projects, the government must establish a clear, efficient, and competitive regulatory framework. The report highlights the need for simplified project approval workflows, a centralized carbon credit monitoring system, and tax incentives for carbon investments. A key recommendation is the creation of a one-stop shop for carbon market investors, minimizing bureaucratic delays. Furthermore, the document emphasizes that Mozambique must benchmark its policies against global best practices to remain competitive in the fast-evolving carbon economy.

The memorandum stresses that carbon markets should be an equitable business opportunity for all stakeholders, especially smallholder farmers. It advocates for transparent benefit-sharing models, where carbon credit revenues are fairly distributed between farmers, aggregators, and investors. Additionally, the report highlights the importance of selecting tree species that provide additional economic benefits, such as fruit and nut production, biomass for fuel, and timber for construction. To ensure sustainability, the document warns that uncontrolled burning is a major risk to agroforestry projects and calls for stronger cultural and regulatory interventions to control wildfires.

Mozambique has a significant opportunity to become a key player in the carbon market, but legal clarity, institutional efficiency, and financial incentives are crucial for success. Ensuring that smallholder farmers benefit from carbon investments, implementing transparent monitoring systems, and promoting agroforestry models that provide multiple revenue streams will help create a sustainable and inclusive carbon economy. With strong governance and investor-friendly policies, Mozambique can position itself as a leader in carbon sequestration and climate resilience.

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RESET Foundation is committed with the The Sustainable Development Goals (SDGs). By implementing strong policies, inclusive investment strategies, and sustainable land-use models, Mozambique can leverage its natural assets to drive carbon market development while improving rural livelihoods. The JFS RESET memorandum on carbon regulation is linked to several SDGs:

The SDG'sG's, also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.