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Azerbaijan should start building infrastructure for domestic carbon market now - CBA

07 September 2026 16:04 (UTC +04:00)

A domestic carbon market has not yet been formed in Azerbaijan, and the country should start building the necessary infrastructure for its creation now, Ali Ahmadzada, economist at the Sustainable Finance Department of the Central Bank of Azerbaijan (CBA), said during a panel discussion titled “Scaling Climate Finance through Carbon Markets” held as part of Baku Climate Week, APA-Economics reports.

“At the international level, there is already a mechanism that Azerbaijan may join in the future. What we do not yet have is a domestic carbon market,” Ahmadzada noted.

According to him, several fundamental issues must be addressed to establish a domestic carbon market. However, Azerbaijan does not have to start this process from scratch.

The CBA representative said that more than 20 jurisdictions around the world have been engaged in establishing and developing carbon markets for more than two decades. Azerbaijan can take into account their experience, including mistakes that have been made, to establish a more reliable carbon market faster and at a lower cost.

Ahmadzada emphasized the importance for Azerbaijan of studying the carbon market models of the European Union, China, Kazakhstan, and Uzbekistan.

He noted that approaches developed particularly in China that make it possible to manage emissions without restricting economic growth could be useful for developing countries, including Azerbaijan.

According to the CBA official, Azerbaijan should first focus on establishing a legislative framework and creating an MRV — monitoring, reporting and verification — system.

“I think we should analyze these experiences more deeply and already start taking action toward building the necessary infrastructure for Azerbaijan. First of all, we need to start with the legislative framework and the creation of a monitoring, reporting and verification system,” Ahmadzada said.

According to him, the MRV system is one of the most important elements in ensuring the reliability of carbon projects and could also enable Azerbaijan to access international carbon markets.