Kenya’s carbon credit market is drawing global attention, praised for its bold mix of innovation and regulation, yet shadowed by questions about transparency, fairness, and long-term impact. A recent report by Power Shift Africa and partners warns that carbon markets, if poorly governed, can be a “dangerous distraction” for Africa, allowing polluters in wealthier nations to keep emitting while shifting the climate burden onto vulnerable communities. The challenge for Kenya is clear: to prove that with the right safeguards, carbon markets can be both ethical and transformative.
In the heart of the Great Rift Valley, a start-up called Octavia Carbon is rewriting the script on climate technology. Using geothermal energy, it is pioneering Direct Air Carbon Capture, pulling CO₂ directly from the atmosphere and locking it away underground. Each of its early prototypes captures about ten tons of CO₂ annually—equivalent to the offset power of a thousand trees. With $3 million in carbon credit contracts already secured, Octavia plans to scale up to 1,000 tons per year by next year, with long-term ambitions reaching a billion tons. This could make Kenya only the second country after Iceland to store captured CO₂ underground, thanks to a partnership with U.S.-based Cella Mineral Storage.
But innovation without integrity risks repeating the mistakes of the past. Kenya has learned from controversies like the Northern Kenya Rangelands Carbon Project, which faced legal challenges over land rights and accusations of sidelining traditional grazing practices. The fallout underscored the need for robust governance and community involvement—lessons now embedded in Kenya’s approach.
In 2024, Kenya introduced the Climate Change (Carbon Markets) Regulations, a landmark framework that requires independent verification, environmental assessments, and clear legal recourse. The government has since proposed additional regulations to establish a National Carbon Registry and place carbon trading under the Capital Markets Authority, aligning the market with Article 6 of the Paris Agreement. These measures aim to prevent double-counting, ensure transparency, and guarantee that local communities directly benefit from carbon credit projects.
Beyond domestic reforms, Kenya is also shaping the global conversation. At the London Climate Action Week, it joined forces with Singapore and the UK to launch the Coalition to Grow Carbon Markets, setting clear principles for high-integrity credits. The goal is ambitious—unlocking up to $250 billion for climate action by 2050—yet grounded in a commitment to environmental and social accountability.
Carbon finance is also finding its way into everyday life. KOKO Networks, for instance, supplies bioethanol cookstoves and fuel to urban households, leveraging carbon credits to subsidize cleaner cooking. In March 2025, the Multilateral Investment Guarantee Agency issued a $179.6 million guarantee to support the initiative, helping reduce indoor air pollution while cutting greenhouse gas emissions.
Still, integrity will be measured not by policy documents but by results on the ground—whether projects truly reduce emissions, respect indigenous rights, and deliver tangible benefits to communities. Kenya’s evolving model suggests there may be a middle ground: one where technological innovation is paired with strict oversight, and where communities are not just participants but direct beneficiaries.
In the coming years, Kenya’s success—or failure—will be a test case for whether carbon markets can deliver on their promise. If the country’s blend of technology, regulation, and community engagement works, it could turn one of Africa’s most contested climate tools into one of its most effective.
