The Kenyan Government has taken a significant step towards regulating the carbon market by releasing draft Carbon Market Regulations for public review until the beginning of February 2024. This move, announced through a gazette notice dated 9th January 2024, allows a 28-day period for the public to provide feedback on these regulations that govern the carbon credit market.
The primary objective of these regulations is to establish a comprehensive framework for the implementation of all carbon market projects within Kenya. To ensure broad engagement, the regulations have been the subject of virtual meetings, and a link to the draft has been shared on the Ministry’s website as well as various social media platforms.
Beyond establishing a regulatory framework, these draft regulations also aim to create incentives and initiatives to support the reduction and removal of greenhouse gas emissions. This aligns with Kenya’s nationally determined contributions to combat climate change, ensuring that the country remains on track to meet its international climate commitments.
Furthermore, the government intends to utilize these regulations to guide the annual social contribution for carbon market projects. This indicates a holistic approach towards leveraging the carbon market not only for environmental goals but also for socioeconomic development.
Overall, the release of these draft regulations marks a significant milestone in Kenya’s efforts to regulate and harness the potential of the carbon market to address climate change and promote sustainable development.
As plans are underway to establish regulations for the carbon market, the Capital Markets Authority (CMA) is considering engaging with industry stakeholders to conduct a comprehensive assessment of Kenya’s carbon market ecosystem. This assessment will involve stakeholder mapping and an analysis of demand, supply conditions, and growth projections. The findings will inform the development of a policy framework to ensure the effective oversight of both voluntary and compliant carbon markets.
In a previous interview with Kenyan Wall Street, Luke Ombara, Director of Regulatory Policy and Strategy at the Capital Markets Authority (CMA), revealed that efforts are being made to support the Nairobi Securities Exchange (NSE) in establishing a carbon credits exchange.
This initiative stems from their collaboration through a Memorandum of Understanding (MOU) signed with the Air Carbon Exchange Group and Nairobi International Financial Centre (NIFCA) in July 2022. This partnership aims to lead the efforts in establishing the carbon marketplace.
