Blue Carbon—Unlocking the Potential of Coastal Ecosystems

Coastal ecosystems are among the most overlooked environmental heroes on Earth. While forests and renewable energy often dominate the spotlight in carbon conversations, a quieter force is at work at the water’s edge. Known as blue carbon, this refers to the carbon captured and stored by marine and coastal ecosystems, specifically mangroves, seagrasses, and salt marshes.

Split-level view of mangrove roots underwater and lush forest above. AI generated picture.

These natural systems punch far above their weight. Although they occupy less than 2% of the ocean, blue carbon ecosystems account for approximately 50% of the carbon sequestered in marine sediments. In fact, mangroves alone can sequester up to 10 times more carbon per hectare than tropical rainforests, making them some of the most efficient natural carbon sinks on the planet.

What’s more, they don’t just store carbon temporarily—they lock it away for centuries to millennia in waterlogged, oxygen-poor soils that dramatically slow decomposition. The result? A powerful, long-term solution for environmental conservation that also delivers a cascade of co-benefits: shoreline protection, fish nurseries, improved water quality, and sustainable livelihoods for coastal communities.

Yet despite their incredible value, these ecosystems are disappearing at an alarming rate. Over one-third of the world’s mangroves have already been lost, and degradation continues due to coastal development, pollution, and unsustainable land use.

As the world races towards net-zero targets and nature-based solutions rise to the forefront of natural strategies, it's time to look seaward. Blue carbon is not a niche concept—it’s a high-impact opportunity waiting to be unlocked.

The Superpowers of Coastal Ecosystems

Beneath the quiet ripples of coastal waters lies an environmental solution that’s nothing short of extraordinary. Mangroves, seagrasses, and salt marshes are not just carbon sinks—they’re nature’s multipurpose infrastructure, delivering environmental resilience, biodiversity, and community protection in a single, seamless system.

1. Unparalleled Carbon Sequestration

Coastal ecosystems are among the most carbon-dense ecosystems on Earth. Mangrove forests, for instance, can sequester carbon at rates of 1.5–2 metric tonnes of CO₂ per hectare per year, with up to 1,000 tonnes of carbon stored per hectare in their soils and biomass. Compare that to terrestrial forests, which typically store around 200–500 tonnes per hectare, and the case becomes clear: blue carbon systems are carbon powerhouses.

And unlike many land-based systems, these ecosystems store carbon below ground, in deep, waterlogged soils that can lock away carbon for thousands of years. This long-term storage makes blue carbon particularly valuable in global efforts to slow atmospheric CO₂ accumulation.

2. Buffers Against Rising Seas

With rising sea levels and intensifying storms threatening coastlines, blue carbon ecosystems act as natural armour. A healthy mangrove belt can reduce wave height by up to 66% over just 100 meters of forest, protecting inland communities from storm surges, flooding, and erosion. According to the World Bank, mangroves prevent over $65 billion in property damage annually.

3. Biodiversity Hotspots

These ecosystems are teeming with life. Seagrass meadows support 20% of the world’s largest fisheries, and salt marshes provide critical habitats for migratory birds and juvenile marine species. Mangroves, meanwhile, host over 1,500 species of plants and animals, many of which are found nowhere else.

Green sea turtle gliding through seagrass meadows in clear turquoise water. AI generated picture.

4. Sustaining Coastal Communities

Beyond the ecological services, these ecosystems support the livelihoods of over 600 million people who live within 10 kilometres of the coast. They offer food, fuel, materials, and income opportunities—especially in small island developing states and vulnerable coastal regions.

Coastal view of local community working along the shore with traditional boats. AI generated picture.

Blue Carbon in Action: Global Success Stories

While the promise of blue carbon is vast, it’s not just theoretical. Across the globe, governments, communities, and investors are already tapping into the potential of coastal ecosystems—restoring, protecting, and financing blue carbon as a viable environmental and biodiversity solution.

1. Indonesia: Leading the World in Mangrove Restoration

Indonesia holds over 3 million hectares of mangroves—the largest extent of any country—and has positioned itself as a leader in blue carbon innovation. In 2021, the government announced an ambitious plan to restore 600,000 hectares of mangroves by 2024 as part of its national environmental strategy.

While behind target—with approximately 150,000 hectares restored as of late 2024—the effort nonetheless marks one of the largest mangrove rehabilitation drives in history. It has brought global attention to the value of coastal ecosystems and created significant momentum for future restoration.

Importantly, this national push catalysed improvements in data collection, restoration techniques, and policy frameworks—laying the groundwork for a more targeted, ecologically sound approach going forward. Recent research indicates that around 30% of the original target area is truly suitable for restoration, underscoring the importance of science-based planning.

Indonesia’s experience reflects the learning curve of scaling blue carbon and stands as a testament to the political will, regional capacity, and international partnerships required to turn vision into long-term impact.

Aerial view of Indonesia’s vast mangrove forests and winding waterways. AI generated picture.

2. Pakistan: $12 Billion Vision Rooted in the Indus Delta

Pakistan is positioning itself as a rising force in the global carbon market through its large-scale mangrove restoration in the Indus Delta, home to the world’s seventh-largest mangrove forest. With the launch of Delta Blue Carbon (DBC) phases 1 and 2, the country aims to restore a combined 450,000 hectares of coastal habitat by 2030.

Backed by foreign private investment and spearheaded by the Sindh Forest Department, the initiative is expected to generate up to $12 billion in carbon credit revenue, making it the largest and one of the most valuable blue carbon projects in the world. Already, $40 million worth of carbon units have been sold, signalling strong market confidence.

The Delta Blue Carbon programme is more than a green solution—it is an ecological and economic game-changer. It enhances biodiversity, safeguards fisheries, and fortifies coastal resilience, all while enabling Pakistan to become a notable player in nature-based carbon trading.

As Chief Conservator Riaz Ahmed Wagan notes, these projects have made Sindh Pakistan’s only carbon unit seller, creating a model that blends environmental restoration with revenue generation in one of the region's most vulnerable areas to natural risks.

3. Mozambique: 10 Million Mangroves and a Community-First Environmental Model

On the shores of the Zambezi River Delta, Mozambique is quietly shaping one of the most ambitious tidal wetland restoration efforts in the world. The MozBlue project, launched by Blue Forest in collaboration with over 300 local communities and 20 partner organisations, has already planted 10 million mangroves across 1,300 hectares of coastal wetlands—a milestone announced at the UN Ocean Conference in Nice.

Zambezi Delta with Nile crocodile foreground and elephants in distant wetlands. AI generated picture.

But this is only the beginning. Over its planned 60-year lifespan, the project aims to restore 30,000 hectares and sequester more than 15 million tonnes of CO₂ equivalent. The initial phase—backed by the newly formed joint venture Summit Removall (a partnership between Removall and Sumitomo Corporation)—will restore 5,116 hectares and capture nearly 2.5 million tonnes of CO₂.

Crucially, MozBlue isn’t just restoring land—it’s rebuilding livelihoods. With 1,300 local jobs created so far, the project includes innovative income-generating initiatives such as aquaculture, salt production, and clean water access. The model is rooted in long-term land tenure security, underpinned by 60-year land-use agreements, ensuring both ecological and social sustainability.

Developed under the Verra VM0033 methodology and certified to Climate, Community & Biodiversity (CCB) standards, MozBlue now ranks as the second-largest blue carbon project in the world, just behind Pakistan’s Delta Blue Carbon. With its integrated, people-first approach, Mozambique is fast emerging as a key player in the blue carbon marketplace, setting new benchmarks for what scalable, ethical restoration can look like.

4. Ghana: A New Frontier for High-Integrity Blue Carbon Credits

In the heart of Ghana’s Keta Lagoon, mangrove restoration is gaining momentum—not just as an ecological solution, but as a milestone for community-driven carbon finance. Spearheaded by the Regenerative Development of Anlo Wetlands (ReDAW) initiative and supported by Terraformation’s Seed to Carbon Forest Accelerator, this project recently issued its first Verified Carbon Units (VCUs) in partnership with Grosvenor, marking Ghana’s entry into the high-quality blue carbon market.

The project’s initial phase targets the rejuvenation of 1,536 hectares of mangroves, with a long-term goal of sequestering over 1 million tonnes of carbon by 2064. By 2030, it aims to capture 15,000 tonnes of CO₂—all at a price point of under $50 per tonne, offering a compelling value proposition in a market increasingly focused on transparency and impact.

ReDAW stands out for its regenerative, people-first approach. It has already created 350 local jobs, with more than half held by women, and promotes sustainable practices such as aquaculture and apiculture. The restored mangroves are expected to boost flood resilience, enhance food security, and uplift the socio-economic wellbeing of surrounding communities.

Registered under Verra’s standards, with plans to expand across an additional 8,445 hectares, the project aligns with Ghana’s broader ambition to restore 2 million hectares of degraded land by 2030. For Grosvenor—a leader in beyond-value-chain mitigation—this partnership demonstrates a commitment to sourcing high-quality, community-anchored carbon credits that deliver measurable biodiversity and environmental gains.

By fusing grassroots restoration with cutting-edge carbon financing, Ghana is fast becoming a model for inclusive, science-based blue carbon development in West Africa.

Challenges to Blue Carbon Scaling

Despite their extraordinary potential, blue carbon ecosystems face a set of challenges that hinder their growth as a mainstream environmental solution. Unlocking their value will require confronting both ecological complexities and structural limitations in the carbon market and policy landscape.

1. Data Gaps and Measurement Complexity

Unlike terrestrial forests, coastal ecosystems are more dynamic and harder to monitor, especially when it comes to belowground carbon stored in waterlogged soils. While methodologies like Verra’s VM0033 are helping standardise MRV (measurement, reporting, and verification), the lack of widespread data, especially in the Global South, slows down project registration and credit issuance. High variability in carbon sequestration across mangrove species, locations, and tidal conditions adds to the technical challenge.

2. Legal and Governance Uncertainty

In many coastal regions, unclear tenure rights—especially over submerged or tidal lands—create legal grey zones. Restoration projects often require coordination across multiple layers of government, including ministries of environment, fisheries, land, and coastal affairs. Without clear land-use rights and long-term regulatory support, project developers face delays or risk invalidation.

3. Ecosystem Trade-offs and Oversimplification

There’s growing concern that treating blue carbon ecosystems as mere carbon sinks could lead to monoculture planting, neglect of biodiversity, or displacement of traditional uses. Mangrove restoration, if done poorly, can backfire—by introducing non-native species, altering hydrology, or ignoring the socio-cultural fabric of coastal communities.

4. Finance Bottlenecks and Risk Aversion

Despite surging interest in nature-based solutions, blue carbon projects still struggle to attract early-stage funding. The upfront costs of feasibility assessments, MRV systems, and community engagement are high. Many investors remain cautious due to long project lead times, complex permitting, and uncertainty around credit pricing, even though high-quality blue carbon credits can command a premium on the voluntary market.

5. Capacity Constraints

In many coastal countries, there’s a shortage of trained professionals in restoration ecology, carbon accounting, and project finance. Limited institutional capacity makes it harder to scale projects or ensure quality assurance. This is where partnerships—between local communities, NGOs, governments, and international funders—become essential.

Unlocking the Potential: The Path Forward

The momentum behind blue carbon is growing, but translating potential into performance requires a deliberate, coordinated push. From finance to policy, science to stewardship, here’s how we can scale blue carbon with integrity and impact.

1. Integrating Blue Carbon into Green Policy and Planning

Governments must formally recognise coastal ecosystems in national green strategies, particularly through their Nationally Determined Contributions (NDCs) under the Paris Agreement. As of 2023, fewer than 30 countries referenced blue carbon in their NDCs, despite its potential for mitigation and adaptation. Embedding blue carbon into environmental, biodiversity, and coastal development plans will unlock new funding and coordination opportunities.

2. Advancing Measurement and MRV Innovation

Refining standardised carbon accounting methodologies, like Verra’s VM0033 and emerging satellite-based tools, can dramatically reduce project costs and complexity. Open-access platforms for mangrove biomass data, automated soil carbon sampling, and AI-assisted MRV are rapidly evolving and need broader support. These innovations are key to making blue carbon credits more verifiable, scalable, and trusted by buyers.

3. Prioritising Equity and Local Stewardship

The most successful blue carbon projects are rooted in community leadership. Restoration efforts that offer secure land tenure, job creation, and livelihood alternatives (like apiculture, aquaculture, or ecotourism) are not only more sustainable—they’re more equitable. Projects must move beyond carbon accounting to embed social co-benefits and uphold Indigenous and local rights from the outset.

4. Unlocking Finance Through Blended Models

New financing structures—such as impact-linked loans, results-based finance, and public-private partnerships—are essential to bridge the early funding gap. These models can de-risk investment in the first 3–5 years before credits are issued. Platforms like blended nature funds and sovereign blue bonds demonstrate how innovative finance can catalyse large-scale restoration.

5. Building a Global Pipeline of High-Integrity Projects

Accelerators, such as Terraformation’s Seed to Carbon programme, and certifiers with strong community and biodiversity standards are helping to build a new generation of blue carbon initiatives. With continued support, we can expand the global portfolio of projects from a few dozen today to hundreds of credible, community-centred blue carbon projects by 2030.

Why Blue Carbon Should Be in Every Net-Zero Strategy

As net-zero ambitions accelerate worldwide, environmental initiatives are at a crossroads. The science is clear: reducing emissions alone is no longer enough. To stay within the limits of the Paris Agreement, we must also invest in nature’s ability to remove carbon at scale. This is where blue carbon steps in—not as a niche solution, but as a vital, undervalued piece of nature’s puzzle.

Blue carbon ecosystems, despite covering only a sliver of the Earth’s surface, store up to five times more carbon per hectare than terrestrial forests and provide long-term storage with resilience benefits that engineered solutions cannot replicate. Their co-benefits—biodiversity, food security, disaster risk reduction—align seamlessly with the UN Sustainable Development Goals and the evolving ESG priorities of businesses and governments alike.

But here’s the deeper truth: Not every country has mangroves, seagrasses, or salt marshes. Blue carbon opportunities are geographically specific. What’s universal, however, is the need for high-integrity nature-based solutions. Whether it's restoring mangroves in Mozambique, rewilding peatlands in Europe, or regenerating forests in Latin America, the principle remains the same—nature must be part of the green equation.

Hudson Bay Salt Marshes, Canada - the largest continuous salt marshes in North America. AI generated picture.

For carbon buyers and project developers alike, the takeaway is clear: The path to net zero runs through nature. Blue carbon may be one of the most powerful tools where coastlines allow, but even where it doesn’t, nature-based solutions offer a proven, scalable, and community-anchored route to environmental resilience and carbon neutrality.