Islamabad, April 1, 2026 — Pakistan and Norway have signed the country’s first bilateral carbon market agreement under Article 6.2 of the Paris Agreement, marking Pakistan’s formal entry into international carbon trading and climate finance mechanisms.
The agreement, signed in Islamabad under the Ministry of Climate Change and Environmental Coordination, is expected to unlock investment in clean energy, climate-smart agriculture and other low-carbon sectors, while allowing Pakistan to generate and trade carbon credits.
Federal Minister for Climate Change Musadik Malik described the deal as a key step in moving from policy preparation to implementation. He said the agreement would create opportunities for international cooperation and support Pakistan’s transition toward a green economy.
Under the framework, Pakistan can develop projects that reduce emissions in sectors such as renewable energy, transport, agriculture and waste management. These emission reductions, known as carbon credits, can potentially be sold to Norway as part of global climate commitments.
Officials said the agreement could help attract international funding at a time when Pakistan faces increasing climate risks, including floods and heatwaves.
Climate finance and investment opportunities
The minister said Pakistan had already introduced national guidelines for carbon trading in 2025 and is now working to establish monitoring systems and regulatory frameworks needed to operationalise the market.
He added that Pakistan has strong potential in emissions reduction across multiple sectors and the agreement would encourage investors and project developers to expand climate-focused initiatives.
Norway’s Ambassador to Pakistan Per Albert Ilsaas said the agreement marks a new phase of environmental cooperation between the two countries.
He noted that Norway aims to achieve climate neutrality by 2030 and plans to purchase emission reductions, known as Internationally Transferred Mitigation Outcomes (ITMOs), beyond its formal climate targets.
Broader cooperation under global climate goals
The Norwegian government has launched a global emissions reduction initiative with funding of around $1.5 billion to support climate projects in partner countries, including Pakistan.
Officials said Norway is interested in large-scale programmes across sectors such as renewable energy, industry and agriculture, rather than individual carbon-credit projects alone.
The agreement is expected to improve Pakistan’s access to climate finance and support its efforts to meet international climate commitments while promoting sustainable economic growth.
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