Norway Commits Up to USD 50 Million to Asian Development Bank’s Carbon Fund

In 2024, the Asian Development Bank (ADB) launched the carbon fund Climate Action Catalyst Fund (CACF). CACF mobilizes carbon finance for mitigation projects in developing countries in Asia and the Pacific region through the purchase of carbon credits under Article 6 of the Paris Agreement. Norway has now entered into an agreement with ADB committing up to USD 50 million, while the Swedish Energy Agency also committed approximately USD 27 million to the CACF in 2023.

‘Through this collaboration with ADB, Norway is taking an important step to reduce global emissions and promote sustainable development in developing countries. Our support to the fund will not only be an important step towards our target of being climate neutral by 2030, but also unlock green investments and technologies needed for a just transition’, said the Minister of Climate and Environment, Andreas Bjelland Eriksen.

The agreement with ADB is part of the Norwegian Initiative for Global Emission Reductions (NOGER). This is Norway’s initiative under Article 6 of the Paris Agreement to enable countries to collaborate on achieving climate targets. Cooperation under Article 6 allows for increased ambition, faster green transitions, and additional benefits such as technology transfer and job creation in developing countries. Strong environmental integrity and sustainable development are key elements for potential collaboration, while they are prerequisites for the work of the Norwegian Initiative for Global Emission Reductions.

‘Norway’s commitment to the Climate Action Catalyst Fund sends a strong signal to the carbon market and strengthens international cooperation under Article 6 of the Paris Agreement. This partnership will help unlock much-needed finance for transformative climate action in our developing member countries in Asia and the Pacific’, said Bruno Carrasco, ADB’s Director General, Climate Change and Sustainable Development Department (CCSD).

Purchasing carbon credits through the NOGER Initiative can help accelerate green growth in developing countries. The carbon credits can contribute to Norway becoming climate neutral from 2030, as decided by the Norwegian Parliament. The emission reductions can be used to cover any shortfall in meeting Norway’s 2030 target under the Paris Agreement in a situation where cooperation with the European Union does not fully achieve a 55 percent emission reduction.