Prime Minister Tarique Rahman on Sunday directed the authorities concerned to formulate a comprehensive action plan to reduce carbon emissions and enhance Bangladesh's carbon credit potential, aiming to enable the country to benefit from the growing global carbon market.

The directive came at a meeting on climate change held at the Prime Minister's Office in the Cabinet Division at the Bangladesh Secretariat, according to a press release.

During the meeting, the Prime Minister underscored the importance of expanding the use of renewable energy, promoting environmentally friendly technologies in the industrial sector, improving energy efficiency, conserving forests, and undertaking large-scale tree plantation programmes to increase carbon absorption.

He also instructed the authorities to prepare realistic strategies to capitalise on Bangladesh's opportunities in the international carbon market.

The Prime Minister stressed the need to ensure transparency in carbon credit management, establish a reliable national database, and strengthen coordination with international organisations to facilitate carbon credit generation and trading.

To streamline the country's efforts, he directed the formation of a committee to improve coordination among the relevant ministries and agencies working to secure carbon credits.

Ministers and senior officials attending the meeting said the effective implementation of emission reduction measures would significantly improve Bangladesh's prospects of earning carbon credits in line with international standards.

A carbon credit is an internationally recognised financial instrument awarded for reducing or removing one metric ton of carbon dioxide (CO2), or an equivalent amount of other greenhouse gases, from the atmosphere.

Carbon trading is a market-based mechanism designed to limit greenhouse gas emissions. Under this system, governments or international bodies set emission caps for countries, institutions, or companies.

Entities that exceed their allotted limits are required to purchase carbon credits, while those that reduce emissions or increase carbon absorption through afforestation, renewable energy, improved energy efficiency, or clean technologies can earn credits. These credits may then be traded or sold to entities that exceed their emission allowances.