Carbon Trading in Nepal: Legal Framework, Regulations, and Project Approval Process

This article provides an overview of Nepal’s carbon trading mechanism and regulatory framework in Nepal.

 

1.1. Introduction to Carbon Trading in Nepal 

 

Nepal, as a climate-vulnerable country, faces significant environmental and socio-economic risks due to climate change. To mitigate greenhouse gas (GHG) emissions and mobilize climate finance, carbon trading has emerged globally as a critical tool. A carbon credit represents a verified reduction of one metric ton of carbon dioxide (CO₂) or an equivalent greenhouse gas. These credits can be traded, sold or used to offset emissions, providing both environmental and financial incentives for emission reduction projects.

 

Recognizing the potential of carbon trading, the Government of Nepal enacted the Carbon Trading Regulation, 2082 (2025) under the authority of the Environment Protection Act, 2076. The regulation provides a structured framework for the development, approval, implementation, and management of carbon trading projects, supporting both domestic and international participation in carbon markets. 

 

1.2. Facts and Background

 

The evolution of carbon trading has been influenced by various international legal instruments and climate finance initiatives. Some of the key developments that have laid the foundation for the global carbon market and Nepal's engagement in carbon trading are as follows:

 

• The United Nations Framework Convention on Climate Change (UNFCCC), adopted in 1992, established the international legal framework for global cooperation to combat climate change and stabilize greenhouse gas concentrations in the atmosphere.

• The Kyoto Protocol (adopted at COP 3 in 1997) introduced three international carbon market mechanisms, Article 6 (Joint Implementation), Article 12 (Clean Development Mechanism), and Article 17 (Emissions Trading), thereby establishing the legal foundation for global carbon trading.

• At the 2015 UN Climate Change Conference (COP 21) in Paris, countries adopted the Paris Agreement, agreeing to hold the increase in global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degree. The Agreement also introduced rules to prevent double counting of emission reductions and regulate international carbon trading through Article 6 mechanisms

• In 2025, Nepal received $9.4 million (received 5$ per ton reduction) from the Forest Carbon Partnership Facility for reducing approximately 1.88 million tons of carbon dioxide under its REDD+ Emission Reductions Program in the Terai Arc Landscape, demonstrating successful results-based carbon emission reduction through forest conservation.

• At the COP 29 summit (2024) in Baku, Nepal signed a bilateral carbon cooperation agreement with Sweden to facilitate international carbon credit trading and climate change mitigation cooperation.

• Nepal signed a climate finance agreement with the LEAF Coalition, a global public-private initiative that provides results-based climate finance to countries for reducing deforestation and forest carbon emissions. Under this agreement, Nepal may receive up to $55 million for successfully reducing deforestation and increasing forest cover through its jurisdictional REDD+ program.

 

2.1. Governing Law 

    Carbon trading in Nepal is primarily governed by the Carbon Trading Regulation, 2025 (2082) (“Carbon Trading Regulation”) enacted under the authority of the Environment Protection Act, 2076. At the international level, Nepal’s carbon trading framework is also influenced by the Kyoto Protocol and the Paris Agreement, which establish global carbon market and climate cooperation mechanisms.

 

2.2. Government Authority

The primary authority responsible for carbon trading and climate policy implementation in Nepal is the Ministry of Forests and Environment. Other relevant ministries and government bodies, including climate change, forest, and finance-related agencies, are also involved in policy implementation, monitoring, and approval of carbon trading projects.

 

 

3.1. Eligible Project Proponents for Carbon trading

Carbon Trading Regulation defines carbon trading as the buying and selling of carbon credits under carbon crediting mechanisms established under Paris Agreement or in voluntary carbon markets. As per rule no. 2 (e) of the Carbon Trading Regulation eligible project proponents for Carbon Trading include: 

 

S.N.	Eligible Project Proponents for Carbon Trading
1	A company registered in Nepal
2	Joint Venture between a foreign company and a company registered in Nepal
3	An organization or body established under prevailing federal laws, or any governmental organization or body owned or controlled by the Government of Nepal, Provincial Government, or Local Government

 

3.2. Eligible Sector for Project development

As per schedule 1 of the regulation the eligible sector of project development includes: 

 

1. Renewable Energy Development Sector: Projects related to clean energy aimed at reducing carbon emissions, including hydropower, solar energy, wind energy, and bio-energy

           Small and medium-scale energy systems established on the initiative of rural communities that are not connected to the national transmission system.

2. Energy Efficiency and Clean Energy Conversion Sector: Industrial energy efficiency programs used in the production and processing of goods and services to reduce carbon emissions.

3. Projects related to reducing and saving energy consumption at the household level such as improved cook stove

4. Agriculture, Forest and Other Land Use Sectors: Projects based on national forests, private forests, agricultural land, and other land use practices aimed at increasing carbon sequestration, including forest conservation programs, afforestation programs in barren land, ecosystem restoration programs, and sustainable forest management programs.

5. Forest Management Sector: Projects that generate energy from waste and systems for managing waste in a way that reduces greenhouse gas emissions.

6. Transport Sector: Electric transportation systems that reduce fossil fuel consumption and minimize capital outflow, as well as public transport systems that are sustainable.

7. Climate Adaptation and Resilience Benefit Sector: Programs that contribute to food security, water security, health security, biodiversity conservation. These include climate change adaptation initiatives and programs that reduce carbon emissions while promoting a green and circular economy.

 

3.3. Participation in carbon trade

The Carbon Trading Regulation provides two modes of participation:

(i)  Government participation, and

(ii) Proponent participation through Government.

 

Government Participation 

 

a. Engagement Mechanism

The Government of Nepal may participate in carbon trading through:

 

• Mechanism established under international climate conventions

• Bilateral agreements with foreign governments 

• Agreements with foreign organizations, business entities, or private sector 

 

b. Proposal Submission 

Where a foreign government or entity issues a call for carbon trading proposals under an existing agreement, the Government of Nepal may submit a proposal and participate accordingly

 

c. Bilateral Trading Arrangements

The government of Nepal may also conclude bilateral agreement with foreign governments permitting carbon trading between business organizations or entities of the respective countries, subject to the terms set out in such agreements.

 

d. Profit and Revenue Management 

Financial benefits derived from carbon trading shall:

 

• Be distributed as mentioned in the agreement 

• Be deposited into the Consolidated Fund of Nepal, or into a specific fund designated under the agreement;

• Be utilized in accordance with the terms of that agreement.

 

e. Project Approval 

For carbon projects developed by the Government of Nepal, the Ministry of Forests and Environment (MoFE) issues the approval letter in accordance with the applicable agreement.

 

f. Carbon Credit Management 

The transfer of ownership of carbon credits and the arrangement of corresponding adjustments shall be carried out in accordance with the governing agreement.

 

Participation by Project Proponents

 

a. Engagement Through Government 

    Eligible project proponents may participate in carbon trading only through the Government of Nepal.

 

b. Carbon Credit Transactions

Where carbon credits generated by a proponent’s project are registered in the registry and are subsequently sold, such transaction is deemed to constitute carbon trading conducted through the Government of Nepal.

 

The project development process shall commence with the preparation and submission of a Project Concept Note in accordance with the provisions prescribed under the Carbon Trading Regulation

 

4.1. Preparation and Submission of Project Concept Note: 

 

a. The project proponent shall prepare a Project Concept Note in the format prescribed under schedule 2 of the Regulation and submit the same along with the following documents:

• A certified copy of the company registration certificate, if the proponent is a company registered in Nepal,

• In case of Joint Venture (JV) between a Nepali company and a foreign company, details of such JV arrangement and a certified copy of the company registration certificate of the company established in Nepal by such foreign company,

• A certified copy of the Permanent Account Number (PAN) or Value Added Tax (VAT) registration certificate,

• A certified copy of the tax clearance certificate of the immediately preceding fiscal year, or certified  copy of the documents, receipts, or other evidence demonstrating submission of tax returns or extension of the deadline for submission of the tax returns, 

• Any additional particulars or documents required under the United Nations Framework Convention on Climate Change (UNFCCC) mechanisms and determined by the Ministry of Forests and Environment,

• A recommendation letter from the concerned local level government where the project is proposed to be implemented; and

• Any other relevant information or documents relating to the project that the proponent wishes to disclose.

 

b. The application along with required documents shall be submitted to:

• REDD Implementation Center: In case of Forest-related carbon projects,

• Concerned Sectorial Ministry: In case of projects related to other sectors.

 

c. Upon receipt of the application, the concerned authority (REDD Implementation Center or the Concerned Sectorial Ministry, as applicable) shall issue a recommendation letter to the relevant project proponent for initiation of the concept note process within 15 days from the date of receipt of such application.

 

4.2. Evaluation and Approval of Concept Note for Preparation of Project Document

 

a. The project proponent shall submit and present the Concept Note, along with the recommendation letter issued by the concerned authority, to the Ministry of Forests and Environment (MoFE).

b. Upon receipt, the Ministry shall forward the Concept Note to the designated Management Committee for evaluation.

c. Where deemed necessary for clarity regarding the necessity and justification of the proposed project, the Ministry may require the proponent to make a presentation on the Concept Note.

d. The Management Committee shall evaluate the Concept Note on the following grounds, ensuring that there is no duplication of project activities:

• Consistency with the commitments made by the Government of Nepal regarding carbon emission reduction

• Details of the proposed geographical area for project implementation and identification of beneficiaries

• Social, economic, and environmental aspects of the proposed project

• Alignment with Nepal’s commitments under its Nationally Determined Contributions (NDCs) and the Sustainable Development Goals (SDGs)

• Clarifications provided through presentation, where such presentation has been required.

 

e. If, during evaluation, the Committee finds that improvements are necessary, it may specify the areas requiring improvement and provide the proponent with a maximum period of 15 days to make such revisions

f. Upon completion of the evaluation, if the Concept Note is found satisfactory, either initially or after incorporation of required improvements, the Committee shall submit its recommendation to the Ministry for the permission to prepare the Project Document.

g. The Ministry shall, within 15 days from the date of receipt of the Committee’s recommendation, approve the Concept Note and grant permission to the proponent to proceed with preparation of the Project Document.

 

4.3. Preparation and Submission of the Project Document

a. Within one year from the date of obtaining approval from the Ministry of Forests and Environment (MoFE) for the preparation of the Project Document, the project proponent shall prepare the Project Document in the format prescribed under Schedule 3 of the Regulation

b. The Project Document shall be submitted along with the following documents for recommendation:

• A certified copy of the tax clearance certificate of the immediately preceding fiscal year, or certified  copy of the documents, receipts, or other evidence demonstrating submission of tax returns or extension of the deadline for submission of the tax returns

• The approval letter issued by the Ministry permitting preparation of the Project Document

 

c. The application along with required documents shall be submitted to:

• REDD Implementation Center: In case of Forest-related carbon projects,

• Concerned Sectorial Ministry: In case of projects related to other sectors.

 

d. If the project proponent is unable to prepare and submit the Project Document within the prescribed one-year period and submits a request for extension specifying the reasons and justification for the delay, the Ministry may, upon evaluation of such justification, grant an extension for a maximum period of one additional year

e. If the Project Document is not submitted within the prescribed period (including any approved extension), the approval previously granted for preparation of the Project Document shall become void, and the Secretariat shall notify the proponent accordingly.

f. Upon receipt of the Project Document and supporting documents, the concerned authority (REDD Implementation Center or the concerned Sectoral Ministry, as applicable) shall, within 15 days, issue a recommendation letter regarding the Project Document.

g. After obtaining the required recommendation letter, the project proponent shall submit and present the recommended Project Document, along with the recommendation, to the Ministry of Forests and Environment (MoFE) for evaluation and approval.

 

4.4. Evaluation and Approval of the Project Document

a. The Ministry of Forests and Environment (MoFE) shall forward the recommended Project Document to the Management Committee for evaluation.

b. The Management Committee shall evaluate the Project Document on the following grounds, ensuring that there is no duplication of project activities:

• Consistency with the commitments made by the Government of Nepal regarding carbon emission reduction,

• The quantity and duration of the carbon credit to be generated,

• Details of the proposed geographical area,

• The climate vulnerable areas, project operation and implementation sites, and the benefits to be received by communities in such areas,

• The social, economic, and environmental impacts of project implementation,

• Commitment with Nationally Determined Contribution (NDCs) and the Sustainable Development Goals (SDGs),

• Any direct or indirect costs, liabilities, or other impacts that may be imposed upon the State and the community,

 

c. During the evaluation process, the Management Committee may invite any two subject matter experts from the roster of experts maintained by the designated national body to participate in its meeting and may cause an independent evaluation to be conducted by such experts.

d. The Management Committee may also consult with or obtain advice from the relevant sectoral ministry, as necessary. 

e. If, during evaluation, the Committee determines that improvements are required, it shall specify the areas requiring revision and notify the proponent in writing, granting a maximum period of 15 days to incorporate such revisions into the Project Document.

f. If the Project Document is deemed satisfactory upon evaluation, the Management Committee shall recommend it to the Ministry for approval. The Ministry shall approve the Project Document within 15 days from the date of receipt of such recommendation.

g. If the Management Committee determines that the Project Document is not suitable for recommendation, the Secretariat shall inform the proponent in writing, specifying the grounds and reasons for such decision

 

4.5. Project Fee and Approval Letter

a. Upon approval of the Project Document by the Ministry of Forests and Environment (MoFE), the Secretariat shall notify the proponent accordingly

b. Following such notification, the proponent shall pay the prescribed project fee as follows:

• Micro Project (estimated annual carbon credits of less than 20,000 tons): NPR 25,000/-

• Small and Medium Project (estimated annual carbon credits between 20,000 and 60,000 tons): NPR 50,000/-

• Large Project (estimated annual carbon credits exceeding 60,000 tons): NPR 100,000/-

 

c. Within seven (7) days from the date of payment of the project fee, the Ministry shall issue an Approval Letter to the proponent authorizing implementation of the project in accordance with the approved Project Document.

d. After receiving the Approval Letter, if the proponent intends to conduct carbon trading pursuant to the crediting mechanism established under the Paris Agreement, the proponent shall register the project under such mechanism and inform the Ministry accordingly. Upon such notification, the Ministry shall provide a Project Registration Number to the proponent.

e. The validity period of an approved project shall be five (5) years..

f. If project implementation requires a period exceeding five (5) years, the proponent may renew the project:

• For an additional five (5) years for the first renewal upon payment of double the applicable project fee; and

• For a further five (5) years for the second renewal upon payment of triple the applicable project fee.

 

Accordingly, a project may be renewed twice, allowing a maximum total duration of fifteen (15) years.

 

 

5.1. Project Implementation 

• The proponent shall initiate the implementation of the project within 1 year from the date of the approval of the project document and shall inform the Ministry accordingly. 

• If the project cannot be initiated within 1 year, the proponent may apply to the Ministry for extension of time by submitting justification along with supporting evidence. The Ministry may, upon the recommendation of the Management Committee, extend the implementation period for up to a maximum of 1 additional year.

•  If information regarding project implementation is not provided to the Ministry, the Ministry may require the proponent to submit progress details within 35 days.

• If such details are not submitted, the Ministry shall publish a 35-day public notice on its website.

• Upon receiving the progress details within the stipulated period, if the Ministry finds that project implementation has not commenced, or if no progress details are submitted within the specified time period, the Ministry may void or revoke the approval granted to the project document. However, prior to such revocation, the Ministry shall provide the proponent an opportunity to present its explanation.

 

5.2. Agreement 

• While implementing the project document, the proponent shall sign an agreement with the relevant person, organization or community contributing in the carbon emission reduction 

• While selling the carbon credit in national or international market, the proponent shall sign an agreement with respective national or international buyer of such carbon credits.

• The proponent shall submit a certified copy of such agreement to the Ministry

 

5.3. Measurement, Reporting and Certification

• The measurement, reporting, and certification of the carbon emission shall be carried out in accordance with the standards of the body accredited under the Paris Agreement or the relevant mechanism under it.

• The measurement and reporting of carbon reduction shall be conducted by the proponent. The certification of such details shall be carried out by an independent third party accredited under the Paris Agreement or its mechanisms.

• The quantity of carbon credits mentioned in the certified certificate shall be recognized as the valid carbon credit amount.

• The certified report shall then be submitted to the designated national body.

• The designated national body, or any authority designated by such body, shall ensure that no double counting of carbon credits occurs in the measurement, reporting, or certification process

 

6.1. Carbon Credit Registry  

In order to properly record and manage carbon credits, a National Carbon Registry shall be established. The Ministry shall act as the central authority responsible for the operation and management of the Carbon Credit Registry. The operational procedures of the Registry shall be as approved by the Ministry.

 

The registry-related functions for forest sector carbon projects shall be carried out by the REDD Implementation Center under the Ministry. The Ministry may also delegate registry-related responsibilities to the concerned sectoral ministries, as necessary.

 

Until the National Carbon Registry is fully operational, the Ministry may utilize the registry system provided under the Paris Agreement or its relevant mechanisms for the recording, transfer, and sale of carbon credits.

 

6.2. Quantification of Carbon Credits for Nationally Determined Contributions (NDC)

Among the total carbon credits that have been certified and issued from a project, five percent (5%) shall be accounted toward Nepal’s Nationally Determined Contributions (NDCs).

 

6.3. Selling Price of Carbon Credit

After deducting the quantity allocated for NDC accounting, the remaining carbon credits may be sold or caused to be sold by the proponent at the rate of NPR 100 per ton of carbon credit, unless otherwise specified in an agreement.

 

Institutions or bodies established under, owned by, or controlled by the Government of Nepal, Provincial Governments, or Local Levels shall sell carbon credits only with the approval of the concerned Ministry and the executive body of the respective local level.

 

6.4. Corresponding Adjustment of Carbon Credit

While preparing the Project Concept Note and the Project Document, the proponent shall ensure that the project is designed in a manner that prevents double counting of the quantity of carbon credits.

 

The Designated National Body shall carry out the corresponding adjustment for carbon credits traded internationally. Where such carbon trading is conducted pursuant to an agreement, the corresponding adjustment shall be carried out in accordance with the provisions of that agreement.

 

Prior permission of the Designated National Body shall be obtained before the sale or transfer of carbon credits.

 

Any liability arising from the transfer of carbon credits under the carbon credit mechanisms of the Paris Agreement or from the sale of carbon credits in the voluntary carbon market shall be borne by the proponent.

 

6.5. Determination of the Price of Carbon Credit

The price of carbon credits shall be determined as follows:

 

• Where the price is determined under an agreement between the Government of Nepal and a foreign government purchasing carbon credits, the price shall be determined in accordance with such agreement.

• Where the Government of Nepal sells carbon credits to any international treaty, mechanism, institution established thereunder, commercial entity, or private sector organization, the price may be determined through bilateral negotiation.

• Where carbon credits are sold by a government body established under, or owned by, the Government of Nepal, Provincial Government, or Local Level, the sale shall be conducted through international competitive open bidding via electronic means.

• Where carbon credits are sold by a private entity, the price may be determined based on the prevailing market price in the international carbon market.

• Where a project sells carbon credits in the voluntary carbon market, the price shall be determined in accordance with the mutually agreed price specified in the agreement.

 

6.6. Distribution of the Benefit from Carbon Trading

Benefits derived from carbon trading shall be distributed in accordance with the benefit distribution plan submitted by the proponent in the Project Document.

 

If the Ministry considers it necessary to amend such plan, it may notify the proponent accordingly. The proponent shall submit the revised benefit distribution plan within fifteen (15) days from the date of receiving such notice.

 

Where the proponent is a private sector institution or company, the proponent shall allocate ten percent (10%) of the total benefits to the Government of Nepal while preparing the benefit distribution plan.

 

Government institutions or bodies established under, owned by, or controlled by the Government of Nepal, Provincial Governments, or Local Levels shall deposit the benefits obtained from carbon trading into the fund of the concerned institution or body.

 

Benefits obtained from government-owned or jointly invested projects shall be deposited into the respective government consolidated funds.

 

Benefit sharing from carbon trading related to national forests shall be governed by the prevailing federal forestry laws.

 

In the case of projects receiving carbon credits as co-benefits, benefit sharing shall be carried out in accordance with the project development agreement. If the agreement does not specify such mechanism, the benefit-sharing arrangement shall be determined by the Council of Ministers of the Government of Nepal.

 

For projects with foreign investment, the proponent may repatriate foreign currency equivalent to the returns corresponding to the proportion of such foreign investment, in accordance with the prevailing laws governing foreign investment.

 

6.7. Cancellation of Approval Letter

The Ministry may cancel the approval letter issued to the proponent if the proponent commits any of the following acts:

 

• Violates the provisions of this Regulation while developing or implementing the project;

• Fails to comply with the United Nations Framework Convention on Climate Change (UNFCCC) or any related agreements or mechanisms; or

• Submits false reports or forged documents to the Ministry or the Designated National Body.

 

6.8. Submission of Annual Progress Report 

The proponent shall submit an annual report detailing the carbon trading activities completed during each fiscal year within three months after the completion of that fiscal year to the Designated National Body, incorporating the matters determined by such body.

 

The Designated National Body shall submit a biennial report containing details of corresponding adjustments carried out during the preceding two years to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC).

 

 

The institutional framework for carbon trading in Nepal consists of three main bodies:

 

1. Designated National Body

2. Steering Committee

3. Carbon Trading Management Committee

 

7.1. Designated National Body  

The Ministry of Forests and Environment (MoFE) acts as the Designated National Authority responsible for overseeing and managing carbon trading activities in Nepal. The Climate Change Management Division under the Ministry functions as the Secretariat of the Designated National Authority Steering Committee.

 

A Steering Committee shall be constituted to provide policy guidance, coordination, and facilitation in relation to carbon trading.

 

The Committee is chaired by the Secretary of the Ministry of Forests and Environment and includes representatives at the Joint Secretary level from relevant ministries such as Finance, Energy, Industry, Agriculture, Law, Physical Infrastructure, Urban Development, and Federal Affairs, as well as representatives from the REDD Implementation Centre, Climate Change Management Division Nepal Rastra Bank, and the Alternative Energy Promotion Centre.

 

Functions of the Steering Committee include:

• Providing policy guidance on carbon trading

• Determining national priorities

• Coordinating among relevant stakeholders

• Issuing directives to the Management Committee

• Recommending guidelines and policies to the Ministry

• Approving the roster of experts related to carbon trading

 

7.2. Carbon Trading Management Committee

A Carbon Trading Management Committee shall be formed under the Ministry to support the operational management of carbon trading.

 

The Committee is chaired by the Chief of the Climate Change Management Division and includes representatives at the Under Secretary level from relevant ministries and institutions such as the Ministry of Finance, Ministry of Law, REDD Implementation Centre, concerned sectorial ministries, Nepal Rastra Bank, and the Alternative Energy Promotion Centre.

 

Functions of the Management Committee include:

 

• Preparing guidelines related to carbon trading

• Providing technical support to the Designated National Authority

• Preparing and maintaining a roster of subject-matter experts

• Prioritizing carbon trading projects

• Conducting studies and research related to carbon trading and submitting reports to the Steering Committee

 

8.1. Non-Market Based Carbon Project 

A non-market-based carbon project refers to a project that generates climate or environmental benefits without primarily intending to generate tradable carbon credits for sale in a carbon market. Such projects are generally undertaken for environmental conservation or climate mitigation purposes rather than commercial carbon trading. Rule 28 of the Carbon Trading Regulation provides that Government bodies, non-governmental organizations (NGOs), and private sector entities may develop non-market-based carbon projects.

 

• For NGO-led projects, the Management Committee shall evaluate the proposal, and the Ministry shall grant approval in accordance with the Social Welfare Council Act, 1992.

• Private sector-led non-market-based projects shall be approved in accordance with the standard project evaluation procedures prescribed under the Regulation.

• Voluntary carbon market projects implemented by NGOs or private entities shall obtain prior approval from the Ministry.

 

8.2. Domestic Carbon Trading

Domestic carbon trading refers to the buying and selling of carbon credits within Nepal between eligible participants in accordance with the prevailing law. Rule 29 of the Carbon Trading Regulation provides that Government entities, local bodies, and private companies may participate in the domestic voluntary carbon market within Nepal by completing the procedures prescribed under the Regulation.

 

 8.3. Carbon Credit under the Clean Development Mechanism (CDM)

Carbon projects approved and implemented under the Clean Development Mechanism (CDM) in accordance with prevailing laws prior to the commencement of the Carbon Trade Regulations shall be deemed to have been approved under these Regulations. Carbon credits generated from such projects may be transferred with the consent of the Designated National Authority, and the projects shall pay the fees and charges prescribed by the Regulations to the Ministry.

 

8.4. Compliance with International Agreements

While engaging in international carbon trading pursuant to these Regulations, the proponent shall comply with the United Nations Framework Convention on Climate Change (UNFCCC) and the agreements and mechanisms established thereunder.

 

 8.5. Coordination, Facilitation, and Monitoring

The Designated National Authority shall carry out necessary coordination and facilitation with concerned ministries, bodies, and project proponents in relation to carbon trading. Additionally, the Ministry, relevant sectorial ministries, or other authorities may conduct monitoring of carbon trading projects, and submit the monitoring reports to the Designated National Authority.

 

8.6. Prohibition on Unauthorized Projects

No person or entity shall develop a carbon trading project or sell carbon credits without obtaining an approval letter from the Ministry.

 

If a project is developed or carbon credits are sold without obtaining such approval, the movable and immovable property associated with the project may be confiscated in accordance with prevailing law.

 

Published date: 23 July 2026 

Disclaimer: This article published on website is just for information purpose only. It shall not be taken as the legal advice, advertisement, personal communication, solicitation or inducement. Bhandari Law and Partners or any of the team members of the firm shall not be liable for the consequence arising of the information provided. As the factual situation may be different on your case, thereof if you need further legal advice on the subject matter, please Contact Us.