Kenya’s Climate Change (Carbon Markets) Regulations 2024: A Comprehensive Legal and Practical Guide for High Integrity Carbon Projects
- Muhoro & Gitonga Associates
- May 23, 2024
- 6 min read
Updated: 6 days ago
Table of Contents
Principles and Integrity Requirements
Project Registration and Approval
Community Rights and Benefit Sharing
Land-Based and Non-Land-Based Projects
Double Counting and Corresponding Adjustments
Emerging Developments and Market Infrastructure
Legal Risks and Recent Case Developments
Opportunities for Investors and Developers
Communities and Indigenous Peoples
1. Introduction
Kenya has emerged as one of Africa’s most dynamic carbon market jurisdictions through the Climate Change (Carbon Markets) Regulations 2024. These Regulations operationalize the Climate Change (Amendment) Act 2023 by creating a structured and transparent framework for carbon project governance.
They aim to attract responsible climate finance, strengthen environmental integrity and promote equitable community participation. For law firms, investors and project developers, these Regulations now form the principal reference point in structuring and operating a compliant carbon project in Kenya.
2. Regulatory Framework
The Regulations were introduced under the Climate Change Act and serve to regulate participation in Kenya’s voluntary and compliance carbon markets. They set out the governance, approval processes, reporting duties, integrity safeguards and community obligations linked to carbon projects.
Their overarching goals include:
• Guiding the development and implementation of carbon project
• Supporting Kenya’s national climate commitments
• Ensuring all projects produce real, measurable and verifiable emissions reductions
• Establishing a clear framework for benefit sharing with communities
3. Scope and Application
The Regulations apply to:
• Voluntary carbon markets
• Compliance carbon markets
They cover both new and ongoing projects, whether publicly or privately owned. The Regulations also introduce important definitions such as:
• Land-based carbon projects
• Non-land-based carbon projects
• Community carbon projects
• Annual social contribution
• Project area and project units
Understanding how a project is categorised determines the obligations, approval procedures and benefit sharing rules that apply.
4. Principles and Integrity Requirements
The Regulations impose integrity safeguards to enhance Kenya’s credibility as a carbon-market destination. All projects must:
• Achieve genuine, additional and verifiable emissions reductions or removals
• Use recognised carbon standards and methodologies
• Maintain reductions for a reasonable, scientifically supported duration
• Uphold transparency and adherence to global best practices in MRV (Monitoring, Reporting and Verification)
• Maintain accurate documentation of mitigation outcomes
These principles align Kenya with global expectations for high integrity climate markets.
5. Institutional Architecture
The governance of Kenya’s carbon markets is anchored in the following institutions:
Designated National Authority (DNA): The DNA is responsible for:
• Reviewing project concept notes
• Issuing letters of no objection and project approvals
• Monitoring project compliance
• Providing guidance on Article 6 of the Paris Agreement
• Maintaining a list of accepted carbon standards
• Appointing project specific technical committees
Multi-Sectoral Technical Committee (MSTC): Appointed to support technical evaluation of carbon projects, advise the DNA and align Kenya’s processes with international best practice.
County Governments: Play a critical role in land-based and community projects, especially where community land rights, benefit sharing and local level approvals are involved.
6. Project Registration and Approval
The project cycle includes:
• Submission of a Project Concept Note
• Review and issuance of a letter of no objection
• Preparation of a Project Design Document
• Stakeholder engagement and public participation
• Approval by the DNA
• Registration in the national system once the Registry becomes operational
The Regulations require clear description of project activities, GPS coordinates, land tenure documentation for land-based projects and details of technology units for non-land-based projects.
For law firms, early structuring and due diligence are essential, especially around land rights, community engagement and project financing.
7. Community Rights and Benefit Sharing
Community participation and benefit sharing are central to the 2024 Regulations.
The regime introduces:
• Annual social contributions payable by project proponents
• Community development agreements for community land projects
• Transparent benefit sharing frameworks
• Mandatory grievance redress processes
• Requirements to document stakeholder participation
Existing commentary indicates that land-based projects are expected to share at least 40 percent of earnings with communities, while non-land-based projects are expected to allocate at least 25 percent.
Proper drafting, negotiation and documentation of community agreements are essential to avoid disputes.
8. Land-Based and Non-Land-Based Projects
The Regulations recognise two broad categories:
Land-Based Projects: Include reforestation, conservation, restoration, agricultural land-use change and other activities that require the use of land.
Non-Land-Based Projects: Include emissions-reducing technologies such as:
• Efficient cookstoves
• Solar based household devices
• Water purification devices
• Green transportation technologies
This distinction affects:
• Benefit sharing obligations
• Land rights documentation
• Community participation requirements
• Approval timelines
9. Double Counting and Corresponding Adjustments
To ensure international credibility, the Regulations prohibit double counting of emissions reductions. The DNA is empowered to apply corresponding adjustments where required, especially for projects participating in international carbon trading under Article 6.
This ensures a mitigation outcome is not counted twice by both Kenya and an external jurisdiction, a key requirement for international acceptance of carbon credits.
10. Emerging Developments and Market Infrastructure
Kenya continues to modernise its carbon market infrastructure through:
• The draft Climate Change (Carbon Registry) Regulations 2025, which will establish the National Carbon Registry
• Development of a digital registry for carbon credit tracking
• Introduction of a national REDD+ digital registry to combat fraud and enhance transparency
• Increasing government and private sector investment in climate finance capacity
These developments demonstrate Kenya’s rapid movement toward operationalising a robust and transparent carbon market ecosystem.
11. Legal Risks and Recent Case Developments
Carbon project disputes have started to emerge, with notable examples involving allegations of inadequate community consent and unconstitutional establishment of conservancies in northern Kenya.
Key legal risk areas now include:
• Defective community consent procedures
• Unclear land tenure for community land
• Poorly drafted benefit sharing agreements
• Misalignment with recognised standards
• Reputational risk from global scrutiny
• Transitional risks as Kenya establishes its carbon registry
Law firms must undertake rigorous due diligence and safeguard clients through compliant documentation, community rights protection and clear contractual structures.
12. Opportunities for Investors and Developers
The Regulations create significant openings in:
• Nature based solutions such as reforestation and ecosystem restoration
• Agricultural carbon projects
• Renewable energy and household technologies
• Corporate supply chain decarbonisation initiatives
• Article 6 cooperation projects
Investors who build strong environmental integrity and community participation into their project models are best positioned for high value carbon credits.
13. Communities and Indigenous Peoples
Communities stand at the heart of Kenya’s carbon market strategy. To participate effectively, communities require:
• Proper legal support
• Clear explanation of benefit sharing terms
• Capacity building on project rights and obligations
• Representation during negotiation
• Transparent grievance channels
Law firms can help communities secure stronger protections, fairer revenue distribution and sustained participation in carbon project governance.
14. Practical Compliance Guidance
For clients and advisers, the following checklist supports compliance:
• Conduct early land tenure verification
• Identify whether the project is land-based or non-land-based
• Align with recognised carbon standards and MRV systems
• Engage communities early and document all consultations
• Draft strong community development agreements
• Implement grievance redress mechanisms aligned with the Regulations
• Prepare legally sound offtake agreements for credits
• Monitor developments relating to the National Carbon Registry
• Maintain transparent records for audits, verifications and buyer due diligence
15. Conclusion
The Climate Change (Carbon Markets) Regulations 2024 mark a defining moment in Kenya’s environmental governance and climate finance strategy. By strengthening project integrity, enhancing community participation and clarifying governance structures, they position Kenya as a leading African jurisdiction for credible carbon-market activity.
For investors, communities and legal practitioners, understanding and applying these Regulations offers immense potential; provided compliance, transparency and equity remain at the centre of project design and implementation.
16. Frequently Asked Questions
What types of projects fall under the Regulations?
They cover land-based projects, non-land-based technology projects and both voluntary and compliance carbon market projects.
Are community benefits mandatory?
Yes. All projects must provide annual social contributions and fair benefit sharing arrangements.
Who approves carbon projects?
The Designated National Authority (DNA) reviews concept notes, approves projects and oversees compliance.
How is double counting prevented?
Corresponding adjustments are applied where necessary to ensure mitigation outcomes are not claimed multiple times.
Can foreign investors participate?
Yes, provided they comply with Kenyan law, land regulations, standards and benefit sharing requirements.
Is Kenya prepared for Article 6 trading?
Yes. The Regulations incorporate Article 6 guidance and a national registry is being developed.
To learn more, see the Climate Change (Carbon Markets) Regulations 2024.
