African organizations developing carbon projects designed to remove carbon from the atmosphere and avoid emissions are used to navigate the conditions of the storm. The latest challenge for the global carbon market is the revival of Donald Trump, the infamous climate skeptic as president of the United States.
The effect of Trump is not always clear at first. As a voluntary market, the sale and purchase of carbon credits is not directly dependent on the US or other governments.
But the US has played a relatively unremarkable role in kickstarting carbon projects in Africa, but has been a role that they believe is being dumped under Trump. Washington's hostile stance on net zero could also affect carbon credit demand, especially among US-based companies.
The development of carbon markets, which could be worth as much as $100 million a year in Africa by 2050, could now be at risk as Trump aims for his previous US climate targets, according to the African Carbon Market Initiative.
Fund reduction
One of the lesser-known consequences of Trump's thwarting the US International Development Agency is that many carbon projects now need to look for alternative sources of funding.
Project developers typically only receive revenue after they begin offering validated carbon reductions. This means that many developers rely on charities and funding grants to fund early activities, such as planting trees and investing in restoring degraded habitats.
For over a decade, USAID has been one of the sources of grant funding for carbon projects in developing countries. The Forest Carbon, Markets and Community Programme, held between 2011 and 2015, played a key role in catalyzing the rainforest conservation project, which served as the earliest example of Africa's carbon credit schemes.
However, while around 83% of USAID's programs have been cancelled, the majority of the institutional workforce has pending final decisions on reorganizing US development support over a narrow list of priorities. Carbon Project developers are among those who feel the impact of the administration's cuts.
An example of a project impacted by the funding cuts is West Africa Blue, a major scheme that funds mangrove conservation on West Africa's coastline. USAID allocated $1.5 million to West Africa Blue in August 2024 to support a project that generates carbon credits through mangrove restoration in Guinea. To date, only about half of this fund has been diversified.
“We've seen real set-offs, especially in coffee projects and sustainable agriculture training, in sustainable agriculture training, where USAID and other US institutions are the main funders,” said Ante Garoza, co-founder and CEO of Carboarn Removal Project Developer.
“Many of these programs rely on current at-risk grants and early stage investments. It's not just about money. It's also about technical support, market access and reliability that comes with US-backed initiatives.”
The silver lining is that carbon projects generally rely on several funders. This means that loss of USAID support may not be fatal for developers. West Africa Blue, for example, also receives funding from several major charities and investment institutions.
Garoza believes that the sudden cuts in USAID funding will encourage developers to diversify their funding sources even more. “African developers are now looking into partnerships in Europe, the Middle East and even local private sector, instead of relying too heavily on US-based buyers or donors,” she says. “We already see an interest in moving forward with bilateral agreements, private investors and alternative paths to regional carbon markets.”
Ripple effect
f Trump's impact on startup funding is viable, and his impact on carbon credit demand could be more damaging.
The market is spontaneous, but a trend in recent years has been to put pressure on businesses to plan for governments around the world to reach net zero. Many business leaders believe that reaching net zero involves realistically offsetting some of their emissions through the purchase of carbon credits.
Therefore, Trump's return is a problem for the carbon market. He simply says that he doesn't seem to maintain pressure on businesses to reduce their emissions. A decline in credit demand inevitably translates to a lower price for project developers.
Luke Leslie, CEO of Carbon Markets Investor Key Carbon, tells African businesses that Africa's carbon projects are already feeling the “rip-over effects” of Trump's policies on climate change.
“The outcome appears to be a loss of appetite from some US companies to fund carbon projects,” he says. “Anexibly, some of our previous North American customers have suspended carbon credit purchases and conducted wholesale reviews of ESG features.”
However, Leslie adds that there is no indication of loss of carbon credit demand in the non-US market.
Garoza agrees that carbon credit demand is “changing” among US companies, but certain projects have several advantages.
“Some people are being pulled back due to reputation concerns and market volatility, while others focus on removal rather than avoidance credits,” she says.
“That means that some projects, particularly those based on planting, agroforestry or verified removals, still have strong potential.”
moment?
Other figures in the carbon market sector are more optimistic about the impact on Trump's demand.
Brennan Spellacy, CEO of PATCH, a platform that helps businesses manage their carbon market strategies, says business leaders have a long-term view on the carbon market.
“Trump,” he points out. “To be honest, it's a moment on the scale of this issue.”
“The reality is that every business leader I'm talking about at the CEO level (Chief Sustainability Officer) level is planned to be there much longer than four years,” he says.
Spellacy points to a shift in tactics, for example, companies have withdrawn from climate standards that limit flexibility, but “have never seen any important material that supports climate claims.”
In fact, Patch has recently been growing in the appetite of companies for carbon credits. Spellacy believes this is because companies that have made a net-zero commitment have already achieved many easy victories to reduce their carbon emissions, and now they need to consider purchasing carbon credits as part of their net-zero strategy.
Another factor he suggests is that the idealistic approach that became popular in the year he called “net zero fever” is that carbon offsetting replaces practical realizations rather than having to be part of the solution.
Spellacy believes Africa can be well positioned to capitalize on the long-term growth of carbon credit demand. He highlights the biochar project as an area in which Africa has a competitive advantage. BioCher is a charcoal-like material produced by burning biomass under carefully controlled conditions, which can be mixed into the soil and stored there for a long period of time.
“Biochar is particularly attractive worldwide, and in Africa there are meaningful quantities produced,” he says. Biochar projects can store carbon much longer than forest projects, but are much cheaper than direct air capture techniques that remove carbon from the atmosphere and then mineralize.
