Article 6 revenue could match Africa’s energy access funding gap but risks favouring middle-income hosts
By Article 6 Network
New analysis finds that Article 6 carbon credit revenue in the 2030s could be similar in scale to the annual cost of universal access to clean cooking, or to electricity, in Africa. It also warns that most of that revenue may go to middle-income developing countries rather than the poorest. The result shows both Article 6’s potential as development finance and a risk of uneven distribution.
According to the analysis, revenue from Article 6 carbon credits in the 2030s could be in the same range as the yearly cost of providing universal clean cooking access, or universal electricity access, across Africa. However, the analysts found that the benefits may go mainly to middle-income developing countries, which are better placed to host Article 6 activities.
The scale of the gap is well documented. The IEA estimates that universal clean cooking access by 2030 would need about US$8 billion a year, or around US$60 billion cumulatively, with Africa accounting for nearly half. Nearly 1 billion people in Africa lack clean cooking, contributing to around 850,000 premature deaths a year from household air pollution.
Article 6 is already funding energy access projects. Ghana has issued and transferred ITMOs from cookstove projects to Switzerland. Rwanda has completed the accounting to authorise 5.69 million credits from the DelAgua clean cooking project. The Article 6.4 Supervisory Body recently adopted its first cookstove methodologies under the PACM.
Signals to watch
- A development-finance case for Article 6: If carbon revenue can cover a large share of energy access costs, Article 6 becomes a serious tool for SDG 7. This strengthens the case for buyer governments to prioritise energy access ITMOs and for development banks to blend finance with carbon revenue streams.
- The distribution problem: The finding that middle-income countries may capture most of the revenue reflects real gaps in readiness. Middle-income hosts have registries, authorisation processes and bilateral agreements, while many least-developed countries do not. Without targeted capacity support, Article 6 may bypass the countries with the largest access gaps.
- Policy responses to watch: Possible fixes include LDC set-asides or quotas in buyer procurement, premium pricing for credits from least-developed countries, results-based pre-financing, and aggregation vehicles that bundle small LDC projects. Climate-vulnerable country coalitions and the COP31 negotiations may push for such measures.
- Integrity sets the ceiling: Revenue projections depend on credit prices, which depend on trust. Stricter rules, such as the PACM’s reversal-risk tool for non-renewable biomass and conservative baselines, will lower issuance per stove but support prices. Investors should model on PACM-grade yields, not legacy voluntary volumes.
- Pre-finance gap: Carbon revenue arrives only after verification, often years after stoves or connections are installed. Financing that bridges this timing gap, through forward offtakes, credit-backed loans and guarantees, will decide whether projected revenue turns into actual access.
