The publication of Executive Decree 6 of October 15, 2026, in Official Gazette No. 30635-B establishes a new framework for projects seeking to generate, register or trade emissions reductions in Panama. Effective October 16, the decree repeals Executive Decree 142 of 2021 and organizes Panama's National Carbon Market System under the Ministry of Environment (MiAmbiente).

Articles 25 and 26 require carbon credits to be registered and their intended destination declared, distinguishing domestic use from international transfers. Article 27 requires authorization before that declared destination can subsequently change, helping prevent the same emissions reduction from being counted twice. Articles 34 through 40 establish six stages for projects, from preregistration to closure, with separate validation and verification processes.

Article 49 allows forestry projects crediting periods of up to 40 years. That timeframe could support the financial planning of reforestation and conservation initiatives, particularly those requiring long investment recovery periods. However, an approved crediting period does not automatically authorize a project to sell mitigation outcomes abroad. International transfers remain subject to additional approvals and conditions linked to Panama's national climate commitments.

The framework also introduces a phased move toward mandatory greenhouse gas emissions reporting. Under Articles 45 and 58, MiAmbiente must subsequently determine which sectors are covered and the thresholds that will apply. An industrial company or power producer therefore cannot rely on the decree alone to establish whether it must report or offset emissions, or to calculate its full compliance costs.

The system may create demand for emissions measurement, project validation, verification and specialized legal and financial services. It also makes credit quality checks more important: Article 80 assigns verification responsibilities to purchasers. Developers and investors will need to factor those requirements into technical assessments and financial models, without assuming that the new framework guarantees a return on any particular project.

Important implementation questions remain unresolved. Sector-specific standards, registration fees, applicable thresholds and detailed rules for international transactions still need to be issued. Articles 82 and 83 set transitional periods for methodologies and validation bodies, but do not expressly explain what happens to projects registered under the repealed decree. Clarifying their status will be important for existing project owners and prospective investors alike.

Research assisted by Sentinel, with editorial verification of official sources. Discover Legislat.ai.