Executive Summary

Mozambique is gradually establishing itself in the voluntary carbon market (VCM) by developing one blue carbon project under Verra's Standard and five other nature-based projects focused on forests, peatlands, and agriculture. These initiatives demonstrate the country's increasing involvement in carbon markets and its potential to implement nature based climate solutions on a larger scale.

Although Mozambique does not have a comprehensive regulatory framework for carbon trading, nature-based projects, especially those under the REDD+ initiative, must adhere to specific legal requirements. REDD+ projects must obtain a license from the National Fund for Sustainable Development (FNDS), meet technical standards, demonstrate financial viability, and generate a minimum of 200,000 tons of CO₂ over their lifecycle. The licensing process can take up to 205 days and extend to 265 days if resubmission is necessary. While REDD+ projects have clearly defined legal requirements, it remains unclear whether the
same regulations apply to non-REDD+ projects. This ambiguity poses challenges for project developers looking to invest in Mozambique as they struggle to fully comprehend the regulatory landscape and determine if their projects will meet the requirements. A national carbon registry is under development, but its scope remains unclear, which creates risks related to accountability, double counting, and transparency. Without a transparent system, stakeholders may face challenges in ensuring the proper tracking and verification of carbon credits, undermining confidence in the market. Benefit-sharing mechanisms allocate 20%
of taxes and fees from forest and wildlife resources to local communities, and REDD+ projects must undergo public and community consultations, potentially including Free, Prior, and Informed Consent (FPIC). Measuring, Reporting, and Verification (MRV) is mandatory for REDD+ projects, though its application to non-REDD+ initiatives remains uncertain.

All land and maritime space, including mangrove forests, are state-owned. However, individuals, organizations, and communities can secure long-term land use rights through a Direito de Uso e Aproveitamento dos Terras (DUAT), which allows carbon credit generation and trade. DUATs are granted for 50 years, renewable for another 49 years, but remain subject to revocation if the land is classified as a public good. Mangrove projects also require a Título de Utilização Privativa do Espaço Marítimo (TUPEM) to operate within 100 meters of the high tide mark. While coastal communities do not need TUPEMs, project developers should establish agreements with them. However, tenure security remains challenging due to administrative constraints and land use conflicts.
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Overall, Mozambique has ambiguous enabling conditions for blue carbon projects. There are project precedents and a defined regulatory framework for REDD+ initiatives. However, uncertainty around applying these regulations to non-REDD+ projects creates barriers for project developers. While the country has clear land tenure regulations governing access and ownership agreements, challenges in securing tenure add further complexity. Clarifying regulatory gaps and strengthening land tenure security will be essential to unlocking Mozambique's full potential for blue carbon investment.

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