A battle over who gets to run Ethiopia’s carbon market is no longer confined to memos. It has spilt into the open through a directive from the Ministry of Agriculture, setting off a turf battle with the Ministry of Planning & Development (MoPD), whose officials argue the rules came from the wrong place and came too soon. At issue is who gets to write the rules and police the trade as forests become financial assets.

The directive, approved by the Agricultural Ministry, lays out a framework that defines forest carbon credits as tradable units equal to one ton of carbon dioxide reduced or removed through mitigation activities. It compels transactions to take place through recognised national or international carbon market systems and declares that conflicting directives or practices do not apply to matters covered by the regulation. Mitigation outcomes may come from either registered projects or jurisdictional programs at the regional or national level, provided those programs can attribute credits to specific subnational areas.

The directive authorises the Forest Development Authority to transfer ownership of forest carbon credits generated under jurisdictional programs to third parties. It requires the Authority to ensure that benefits from carbon sales reach forest rights holders through a benefit-sharing plan. It also protects the original forest carbon credit holder's right to transfer ownership to third parties, even when jurisdictional programs are in place.

Forest owners may prepare and implement carbon credit projects themselves. If they lack the capacity, they should appoint an implementing entity, provide information for jurisdictional programs, prove ownership of forest assets entering a project, sign agreements with project implementers and issue letters of consent through the regional government authority. Project developers should also align measurement systems with approved methodologies, establish control systems, create a forest carbon information system, implement a monitoring plan, and submit requested information.

They should also file annual mitigation performance reports and report accumulated forest carbon credits using international methodologies and standards.

That reach has unnerved officials at the Ministry of Planning & Development, who believe the directive was issued by the federal institution without a mandate, even as a carbon market proclamation drafted by their Ministry is before the Council of Ministers.

“The directive has been published, while the proclamation is still in process," an official from the Ministry, who requested anonymity, said. "This is not appropriate.”

According to the official, the Ethiopian Forestry Development Authority (EFDA) knew the bill was in the making but ratified the directive anyway. Planning Ministry officials insist they have a shared mandate to coordinate regulations among stakeholders, including the Forest Development Authority, the Agriculture Ministry, and other federal agencies. However, senior officials at the Agriculture Ministry say they know of no new bill in the legislative process.

Bisrat Hailemichael, CEO of Forest Resource Assessment at the Authority, argued that the dispute between the two ministries reflects an architecture that the federal government has chosen. Ethiopia is using a “sectoral vs national” governance model, as set out in the national strategy and the draft proclamation, to avoid conflicting mandates. Under this model, the Planning Ministry would serve as the national authority, setting policy, managing the carbon registry and representing Ethiopia in international negotiations. The Authority would remain the technical lead for forestry, verifying biophysical data, managing plans for sectoral measurement, reporting and verification (MRV) and approving benefit-sharing.

"Until such time that the proclamation is enacted, the directive remains the only regulation in force, even as it is being aligned with the legal order," said Bisrat.

According to Bisrat, the technical requirements, including forest management and tree species mapping, are being adjusted to avoid overlap with the Planning Ministry’s role.

The two federal agencies are attempting to integrate their work into a single national MRV system to collect forest carbon data at the wereda level before it flows into the Planning Ministry’s database, thereby limiting double-counting. Under the draft proclamation, a national committee for the carbon market, incorporating both ministries, would be created to resolve overlapping claims.