Panama establishes national carbon market framework, opening the way for Article 6 and CORSIA transfers
By Michael Mathres
Panama has published a decree establishing a national carbon market framework. It creates carbon credit registries, provides for a future domestic emissions offsetting mechanism, and sets out provisions for international credit transfers under Article 6 and CORSIA. The decree gives Panama the legal basis to authorise ITMOs and CORSIA-eligible units, making it a potential new host in Central America.
A decree published last week sets out Panama’s national carbon market framework. It establishes registries for carbon credits, lays the groundwork for a future domestic offsetting mechanism, and includes provisions governing international transfers of carbon credits under Article 6 of the Paris Agreement and under CORSIA.
The decree follows a lengthy drafting process led by the Ministry of Environment (MiAmbiente). The draft decree repeals Executive Decree No. 142 of December 2021, which had created the National Carbon Market of Panama and the Panamanian Carbon Exchange as a trading platform. It replaces it with new rules for a national carbon market system. Panama presented a revised draft, described as much more robust, at the Chile Carbon Forum in October 2025. A public consultation closed with a workshop in March 2026.
The consultation documents state that the framework aims to make Panama’s system interoperable with international carbon market mechanisms consistent with Article 6, and to ensure environmental and social integrity through specific safeguards. A 2025 MiAmbiente roadmap had assessed Panama’s status against the participation requirements for Articles 6.2 and 6.4 and compared registry options for Article 6.2.
Signals to watch
- Legal basis for authorisation: With the decree in force, Panama can begin issuing Letters of Authorisation, applying corresponding adjustments and recording transfers. Developers should watch for the implementing regulations, fee schedules and the authorisation procedure manual. These will decide how quickly the first authorised units emerge.
- CORSIA supply opportunity: By explicitly covering CORSIA, Panama positions itself to supply airlines with eligible units at a time of tight Phase 1 supply. Forestry, reforestation and land-use projects are likely early candidates, given Panama’s forest cover and its status as a carbon-negative country.
- Domestic demand channel: The planned domestic offsetting mechanism could create local demand, building on Panama’s existing corporate carbon footprint programme. Watch how domestic and international uses are separated in the registry to avoid double counting.
- Bilateral partners needed: Panama has not yet announced Article 6.2 implementation agreements with major buyers. Watch for engagement with Singapore, Switzerland, Japan, Sweden and Norway, and for any regional cooperation through the Pacific Alliance or Central American bodies.
- Integrity and indigenous rights: Panama’s carbon market debate has involved concerns about REDD+ and indigenous territories. How the framework applies safeguards, benefit-sharing and free, prior and informed consent will shape investor confidence and social licence.
Sources:
- MiAmbiente – Draft Executive Decree on the National Carbon Market System
- MiAmbiente – Public consultation final report
- UNFCCC – Panama National Carbon Market System consultation closing workshop
- Carbon Pulse – Panama publishes “much more robust” carbon market decree
- MiAmbiente – National Carbon Market Roadmap
