Kenya Urged to Accelerate Carbon Market Regulations

Speakers at Diamond Trust Bank’s Sustainability and Economic Forum have called for urgent action to finalize regulations governing Kenya’s carbon markets, emphasizing that the country could potentially earn billions from global carbon credit sales.

According to the speaker, Kenya was the first African nation to implement a Climate Change Act in 2016, later amending the law in 2023 to incorporate carbon markets and releasing initial regulations in May 2024.

However, stakeholders believe further regulatory advancements are crucial to capitalize on the opportunities within this emerging sector.

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Paul Muthaura, CEO of the Africa Carbon Markets Initiative, highlighted Kenya’s potential to lead the continent in carbon trading, thanks to its strong technological and digital infrastructure. “We now have a fairly solid legal framework. The law is only the first step, and with robust public participation, we can truly live up to our potential,” Muthaura stated.

On his part, Jackson Koimburi, head of Circular Economy and Climate Change at the Kenya Private Sector Alliance, pointed out significant hurdles for Small and Medium Enterprises (SMEs) in accessing the carbon market. He identified issues such as low awareness, high transaction costs, and market volatility, which complicate participation and profitability for businesses. “Carbon markets are a low-hanging fruit compared to traditional investment routes, but there is still more that needs to be done,” he said.

The speakers noted that while Kenya’s carbon markets have been operational since 2005, the lack of comprehensive regulations has led to complaints regarding revenue sharing with local communities involved in carbon projects. Kenya has been trying to set up regulations on the carbon markets. Last year, President William Ruto signed into law the Climate Change (Amendment) Bill 2023, which provides a framework for carbon market regulations.