Issue No. 101

Kenya's Carbon Credits Landscape

Land remains perhaps the single most contentious issue in Kenya, from the grazing competition in Turkana to the infamous unrest over the Laikipia conservancies in 2022 to the rapid construction boom of Nairobi. Kenya is pockmarked by such—often violent—competition, increasingly accentuated by the climate crisis and intersecting with systemic issues of political neglect. But it is not simply growing agropastoralist communities tussling over dwindling arable land; others are also involved, not least Gulf powers looking to divest their hydrocarbon investments in the interest of food security. And another much-overlooked competitor for Kenya's land is on the block —companies seeking to develop the country's carbon credit industry. 

While regarded as an increasingly central pillar of climate finance, the industry has developed a controversial reputation for its rapacious appetite for land-- and dubious impact on sequestering carbon. At its most straightforward, a carbon credit or offset represents the reduction or removal of one tonne of carbon dioxide equivalent from the atmosphere. Such credits are generated by projects that are intended to either avoid emissions – such as distributing clean cookstoves – or sequester carbon through land- or ocean-based solutions, including reforestation or blue carbon initiatives. Buyers, usually governments or corporations, then acquire these credits to "offset" their own emissions. Some have argued that this represents a kind of 'carbon colonialism,' where countries and corporations continue to pollute in excess, while tokenistically offsetting through such projects. Still, governments on the continent are awakening to carbon credits as a potentially lucrative asset. Even amidst the drawing down of green financing by the US and others, the industry is projected to reach between USD 7 and 35 billion by 2030 and potentially as high as USD 250 billion by 2050. 

There are broadly two types of carbon markets – compliance markets, legally mandated systems that impose strict caps on emissions for certain industries, and voluntary markets, which are self-regulating spaces in which companies purchase credits to meet internal climate targets or corporate responsibility goals. To align these markets, an internationally recognised framework for carbon trading was adopted under Article 6 of the Paris Agreement at COP26 in Glasgow. This measure set out to restore credibility to carbon trading, following years of controversy over unverifiable credits and inflated claims.

Nairobi has emerged at the forefront of Africa's carbon market ambitions, positioning carbon trading as a cornerstone of its climate finance strategy. In 2022, 11 million verified carbon credits were issued to Kenya, making it the second-largest issuer of carbon credits in Africa after the Democratic Republic of the Congo. And at COP27, President William Ruto described carbon credits as Kenya's "next significant export", a mechanism intended to mobilise billions in climate funding and help the country meet its Nationally Determined Contribution (NDC) target of cutting emissions by a third by the 2030s. Against a backdrop of developing strong climate legislation, Nairobi has enjoyed a massive influx of climate financing and innovation, with dozens of start-ups working on everything from electric vehicles to mangrove protection to climate-resilient agriculture. But Kenya has also been rocked by controversies surrounding the carbon credit industry, which some have dismissed as a 'green-washing' alternative to more substantial reform. 

In particular, Kenya's Northern Rangelands Trust Carbon Project (NKRCP) – marketed as the world's largest soil carbon project-- has been criticised for misleading practices and for altering the grazing practices of indigenous peoples. Spanning millions of hectares across pastoral conservancies, the NKRCP has sold vast numbers of credits to multinational corporations such as Netflix and Meta since the project was established in 2012. But the data on carbon sequestration in soil is dubious at best, with the handful of studies on the topic having largely occurred in climates radically different to the semi-arid of the NKRCP. The NKRCP was first suspended in March 2023 for inaccurate offsets and altering Indigenous livestock grazing practices. Later that year, over 1,500 indigenous Ogiek residents in the Mau Forest were forcibly evicted by government forces and their homes and crops destroyed to better 'protect' the land. These evictions were linked to another controversial deal between Nairobi and Blue Carbon, a Dubai-based company granted rights to develop offset projects across "millions of hectares" of Kenyan forests. And it speaks to a broader concern as well, the sidelining of indigenous land management practices in favour of questionable science on carbon sequestration and excluding communities from their historic territories.

Then, in early 2025, the Kenyan High Court ruled that parts of the NKRCP had been established illegally and without adequate public participation, prompting the controversial project to be placed under review by carbon credit certifier Verra for the second time. Nairobi has now seized the nettle to tackle the obscurity and inequity that have long characterised voluntary carbon markets, introducing the Climate Change (Carbon Markets) Regulations in June 2024, East Africa's first comprehensive legal framework for carbon trading. The regulations include a mandatory annual social contribution that mandate communities to receive 40% of revenues from land-based projects and at least 25% from non-land-based projects. Developers are required to sign Community Development Agreements with local groups and to ensure free, prior and informed consent from landowners – especially indigenous and pastoralist communities – before projects begin. Without such safeguards, carbon credits risk further intensifying a historic dynamic of African land and labour having been exploited by foreign powers, this time for global carbon trading.

The term 'toxic decarbonisation' seeks to describe the way in which wealthier, more polluting countries manage their 'green energy transition' to the detriment of developing nations-- and how hydrocarbon-dependent economies such as South Sudan will inevitably lag behind such a metamorphosis. The rapacious looting of the territories of the eastern Democratic Republic of Congo for rare earth minerals such as colbalt and coltan is another way in which the deep global inequities at the heart of this transition are expressing themselves. For Kenya, such concerns are very much alive, with the controversies around the NKCRP project and other carbon credit schemes continuing to swirl. But though somewhat tarnished, money will inevitably continue to flow into carbon credits, with it regarded as a way in which to rectify the wrongs of excess pollution from developed nations. But, as always, the devil is in the details-- and for Kenya, the pressures of managing the rising competition over rapidly degrading land will only continue to grow.

The Horn Edition Team