Executive Summary

In Tanzania, nature-based carbon markets are emerging, with one mangrove project under development and seventeen other projects registered under Verra and Plan Vivo standards. The government has established a structured regulatory framework requiring all projects to undergo a multi-step approval process, including environmental and social impact assessments, community consultation, and compliance with REDD+ safeguards where applicable. The National Carbon Monitoring Center oversees project registration, MRV, and carbon transactions. While the registry establishes a foundation for transparency, it currently provides limited information to fully assess project integrity and track carbon credit flows.

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Tanzania also requires defined benefit-sharing arrangements as part of project approval. For projects classified as REDD+, the regulations allocate 61% of gross carbon revenues to the managing authority, typically the government in mangrove projects, 8% to the Designated National Authority, and 31% to the project proponent. Separate registration, administrative, and project fees further reduce the proponent's share, which must cover all project development, implementation, monitoring, and financing costs. This structure may undermine project bankability and limit private-sector and international investment in blue carbon projects. While alternative arrangements may be negotiated for non-REDD+ projects, the absence of standardized negotiation procedures creates additional uncertainty for project developers and investors. Developers must ensure meaningful participation of Indigenous Peoples and Local Communities, including obtaining consent and complying with Free, Prior, and Informed Consent (FPIC) principles through the EIA and approval processes. All mangrove forests in Tanzania are state-owned, and private ownership is not permitted. However, national legislation, including the Village Land Act (1999), Land Act (1999), and Forest Act (2002), recognizes customary rights of occupancy and enables community participation through mechanisms such as Joint Forest Management and Community-Based Forest Management. These frameworks allow communities to manage forest resources but they do not transfer ownership. Concessions and management agreements are permitted, providing a legal pathway for project development in mangrove areas. Carbon rights are linked to forest resource rights and can be secured through management agreements. However, the legal framework does not clearly define the conditions for obtaining or revoking carbon rights across different arrangements, which creates uncertainty for long-term project planning.

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Overall, Tanzania has ambiguous enabling conditions for blue carbon projects: The country has established a detailed, centralized regulatory framework that provides legal clarity on project approval, safeguards, and benefit-sharing, demonstrating strong government oversight and commitment to carbon markets. At the same time, limited transparency in the national registry, challenges in implementing land tenure, and the lack of clarity on carbon rights allocation and revocation create uncertainty for developers and investors. For project development, early engagement with government authorities and local communities will be essential. However, the current benefit-sharing framework leaves project developers and investors with less than one-third of carbon revenues while requiring them to bear the full costs and risks of project development. This imbalance may limit investment, reduce project viability, and constrain the growth of Tanzania's blue carbon market. Addressing this issue, together with strengthening registry transparency and clarifying carbon rights, would significantly improve the country's attractiveness for blue carbon investment.