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Climate Change and Environment

Carbon Markets Readiness and Benefit-Sharing

Legal, institutional and community readiness for carbon projects under the Climate Change Act and the 2024 Carbon Markets Regulations, including fair benefit-sharing arrangements.

Sector
Climate Change and Environment
Typical timeline
8 to 14 weeks
Delivery
Onsite or virtual
Deliverables
6

The problem

Since the Climate Change (Amendment) Act, 2023, carbon trading in Kenya is a regulated activity. Projects need a letter of no objection and an approved project design document, and transfers of mitigation outcomes abroad require government authorisation and corresponding adjustments. Land-based projects on public or community land need a community development agreement, and the Climate Change (Carbon Markets) Regulations, 2024 direct at least 40 per cent of the previous year's aggregate earnings to communities. The Kenya National Carbon Registry, launched in February 2026, now records projects, authorisations and transfers.

Counties and communities hold much of the land these projects use, and they must now negotiate agreements, run community project development committees and verify the payments due to them. Developers face approval steps, an expired transition window for existing projects and commercial risk if authorisation stalls, as the reported withholding of a letter of authorisation before the January 2026 closure of clean cooking company KOKO Networks showed. Both sides need clear evidence and fair process.

Policy anchors

  • Climate Change (Amendment) Act, 2023
  • Climate Change (Carbon Markets) Regulations, 2024
  • Climate Change (Non-Market Approaches) Regulations, 2026
  • Kenya's Second Nationally Determined Contribution (2031-2035)

How we work

  1. Regulatory pathway review

    We assess the project or county portfolio against the Act and the 2024 Regulations, from no objection and design document to authorisation, registry records and compliance deadlines, and identify the gaps.

  2. Stakeholder and land mapping

    We map land tenure, community structures and county interests, and establish which communities and counties each project must conclude a community development agreement with.

  3. Benefit-sharing design

    We model aggregate earnings and the statutory community share, and design disbursement, governance and grievance arrangements that communities can understand and audit.

  4. Consultation and agreement support

    We support free, prior and informed consultation and the negotiation of community development agreements, giving communities and counties independent analysis of the proposed terms.

  5. Monitoring and disclosure

    We set up indicators and reporting for benefit flows, safeguards and community outcomes that match registry and annual reporting requirements.

What you receive
  • Regulatory readiness and compliance assessment
  • Stakeholder, land tenure and community mapping report
  • Benefit-sharing model and distribution mechanism
  • Draft community development agreement terms and grievance procedure
  • Benefit-flow monitoring framework and annual report template
  • County carbon markets policy brief and guidelines
Who it is for

County governments, community representatives, and carbon project developers and investors working under Kenya's carbon markets framework.

Questions clients ask

Does the 40 per cent community share apply to every project?

No. The 40 per cent minimum applies to land-based projects on public or community land and is calculated on the previous year's aggregate earnings, while non-land-based projects carry a lower minimum. Private projects on private land are exempt from the annual social contribution, so each project needs its own legal reading.

We represent a county. Where should we start?

Start with an inventory of carbon projects operating or planned on public and community land in the county, and the approvals and agreements each holds. That shows where the county must act on consultation, land and benefit sharing, and where it needs a policy position.

Does the framework cover adaptation projects that do not sell credits?

Yes. The Climate Change (Non-Market Approaches) Regulations, 2026 require such projects to be approved by the Climate Change Directorate, recorded on a national platform and reported on annually. We support proponents through that route as well.

Carbon Markets Readiness and Benefit-Sharing

Request a proposal.

Tell us about the institution, the timeline and what you need to decide. We will reply with a proposed scope, team and timeline.

Your enquiry goes straight to our team at info@policy.co.ke, and we reply within one working day. We use your details only to respond.

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