Leveraging the AfCFTA for Continental Renewables and Carbon Credit Market: Legal, Institutional and Policy Pathways

Abstract

Africa is confronted with the dual challenge of addressing severe energy poverty while responding to global pressures for rapid decarbonisation as well as the growing demand for sustainable investment mechanisms. The International Renewable Energy Agency (IRENA) estimates that the continent could generate annually 10 terawatts of solar energy, 350 gigawatts of wind, 15 gigawatts of geothermal, and 1,750 terawatt-hours of hydropower. Despite this, the absence of integrated frameworks limits cross-border energy trade and the development of carbon credit markets, leaving Africa reliant on piecemeal national initiatives and exposing it to risks of carbon colonialism. This article argues that the African Continental Free Trade Area (AfCFTA) offers a transformative platform to address these deficiencies. By harmonising grid codes, tariffs, and renewable energy regulations, and aligning with regional economic communities (RECs), AfCFTA can enable the emergence of a functional cross-border renewables market. The study further examines mechanisms to integrate private sector actors, including independent power producers, financiers, and carbon credit registries, and the role of digital platforms in ensuring transparency and verifiable emissions reductions. Integration with global carbon markets under Article 6 of the Paris Agreement is considered, alongside the critical need for robust monitoring, reporting, and verification (MRV) frameworks. Through critical case studies and prescriptive recommendations, this article demonstrates that AfCFTA is not merely a trade instrument but a vehicle for continental decarbonisation. Leveraging its institutional and legal architecture can mobilise investment, harmonise policy, and unlock Africa’s renewable and carbon credit potential, bridging energy poverty and climate ambition.