In a move to regulate the burgeoning carbon credit market, the Kenyan government will imposed hefty fines totaling over Ksh 500 million (approximately $4 million) on individuals and companies found transacting in carbon credits without a valid license. This is if the Climate Change (Carbon Markets) Regulations bill 2023, which will offer guidelines for traders dealing in the carbon market passes
The Kenyan government had issued a directive in June 2023 requiring all entities involved in carbon credit trading to obtain licenses from the Ministry of Environment and Climate Change. This move aimed to address concerns about illegal trading practices and lack of oversight, potentially undermining the environmental integrity of the carbon market.
What are carbon credits? Read our extensive coverage here.
As countries strive towards ambitious climate goals, carbon credits have emerged as a promising tool for compensating entities that reduce greenhouse gas emissions. Companies can purchase these credits to offset their emissions, promoting environmentally responsible practices. Kenya, with its vast renewable energy potential and focus on sustainability, has seen a surge in interest in carbon credit trading.
Should the draft regulations created by the Environment Cabinet Secretary Soipan Tuya pass, unlicensed carbon trading will attract a Ksh500 million fine, 10 years imprisonment, or both.
“Any person who undertakes a carbon market project without an international, national, bilateral and project-based agreement without the approval of the Cabinet Secretary commits an offense,” reads part of the regulations.
If you want to participate in Carbon Trading, you will be required to apply for licensing from the Designated National Authority (DNA) for a fee. The draft will also see the establishment of other institutions to offer guidelines in the sector like the National Carbon Registry, the Carbon Assessment Technical Committee, and the Climate Change Directorate.