Driving Innovation and Scaling Impact with the Forest Carbon Partnership Facility (FCPF)

By: Andres Espejo, Chie Ingvoldstad, FCPF Fund Management Team

The Forest Carbon Partnership Facility (FCPF) made significant strides in 2024, helping countries deliver substantial high-integrity forest carbon emission reductions, and proving a scalable model to globally reach net-zero deforestation by 2030. These achievements reflect years of collaboration, innovation, and learning, as the World Bank and the FCPF continue to adapt to the evolving needs of carbon markets and the countries they serve.

A landmark year for result-based payments

In 2024 the FCPF significantly accelerated payments for high-integrity emission reductions, more than tripling result-based payments from $53.2 million in 2023 to $164.5 million. At the end of 2024, we are on track to deliver payments for over 35 million emission reductions, which constitutes more than 10% of total emission reductions transactions globally in carbon markets in 2023.  

This trend will accelerate even further during this fiscal year, with an expectation that by the end of 2025 the volume paid by the FCPF will double to 80 million emission reductions. This progress is the result of a unique 15+ year partnership and commitment from FCPF participant countries, Indigenous Peoples and local communities, among other key stakeholders.

The FCPF’s milestone achievement in 2021—issuing the world’s first jurisdictional REDD+ emission reductions credits—set the foundation for today’s successes. This milestone showed the proof-of-concept that high-integrity forest carbon credits can be generated at scale, and it paved the way for the continued progress made by the FCPF Carbon Fund’s 15 participant countries. All 15 countries have now reported emission reductions, and are expected to complete at least one independent monitoring, reporting and verification cycle in 2025.

Countries are also progressing well in implementing first-of-its kind jurisdictional benefit-sharing mechanisms that are helping to ensure proceeds are channeled to beneficiaries on the ground. Through collaboration with the EnABLE trust fund, the FCPF has also prioritized the participation of disadvantaged groups, including Indigenous Peoples and women, in benefit sharing.  

For example, in Mozambique, FCPF and EnABLE programs are aiming to ensure that at least 50 percent of the beneficiaries of the Emission Reductions Programs are women. A local NGO financed by EnABLE is supporting women's groups with technical skills and capacity building for them to develop business plans to advance resilient and low carbon livelihoods systems. This enables countries to send a strong signal to investors and stakeholders that they can implement transparent, equitable and financially robust systems for proceeds to be distributed and re-invested.

Access to markets and monetization

Beyond Carbon Fund payments, FCPF countries are now also generating emission reductions in excess of those paid for by the FCPF. To date, over 32 million excess emission reductions have been reported and are undergoing verification, 5 million of which have been issued. The World Bank has helped establish a pathway for countries to enable the monetization of these excess emission reductions if they desire to do so. This includes providing technical assistance to countries to help them move policy decisions towards monetization or help them to transact FCPF emission reductions in third-party registries such as Architecture for REDD+ Transactions (ART) and Verra.  

This support is paying off. At COP29, Côte d’Ivoire and Madagascar announced they are ready to monetize their FCPF excess credits, and they are taking the steps to engage with carbon markets by June 2025.  

Moreover, we have reached a very important milestone of the first FCPF emission reductions being transacted outside of the FCPF. Costa Rica has recently re-issued FCPF emission reductions in the third-party ART registry in advance of a first sale of 100,000 FCPF emission reduction credits with a third-party buyer.  

Securing the future of emission reductions programs  

Moving forward, it will be crucial to ensure momentum and the long-term sustainability of emission reductions programs beyond the lifespan of the FCPF. The recent extension of the FCPF Carbon Fund to December 2028 was a good first step, as would be the extension of countries’ emission reductions payment agreements (ERPAs) to give countries adequate time to continue receiving results-based finance from the FCPF and properly implement their benefit-sharing plans so that contributions made by Indigenous Peoples and local communities are recognized and rewarded. ERPA extensions would also give participant countries the time to transition to other carbon market standards to continue leveraging carbon markets.

Time for collaboration to achieve global impact

The World Bank, through initiatives including the FCPF and the BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL), has demonstrated the proof of concept for emission reductions. There is now a need to scale up an improved model that could enable a greater number of countries to generate high-integrity emission reductions.  

The FCPF has been the result of more than a decade of efforts from a diverse set of stakeholders who have worked together for the successful implementation of the emission reductions model. This sets a powerful example for the global community to step forward and scale up and will require new venues for stakeholders to come together, align initiatives, and strengthen synergies.  

Read more about the FCPF’s latest achievements in our 2024 Annual Report.